Sep 13, 2017 (San Diego) on Thursday the Trump Administration announced that it is ending the cost sharing subsidies that allow poor pope to afford health care. This is expected to send the exchanges into turmoil and further destabilize the system. It will send millions of Americans back to where they were before the Affordable Care Act, financially crippling emergency room care.
In a statement the White House said:
the Government cannot lawfully make the cost-sharing reduction payments. The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system. Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.
This ends speculation as to what Donald Trump, who has made no secret of his dislike of the ACA, will stop paying insurers.
What is ironic is that Trump is selling this as a cost saving measure. However, according to the Kaiser Family Foundation:
We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion. Extrapolating to the 10-year budget window (2018-2027) using CBO’s projection of CSR payments, the federal government would end up spending $31 billion more if the payments end.
They also state that the 23 percent increase in federal spending is an under estimate. The Urban Institute had similar findings.
Neither of these studies touches on the millions that will be left without insurance, or the danger to public health. Ironically this may very well set the stage for a single payer system in te United States.