Study: Trump Causing ACA Premium Increases Without Repeal

It has long been clear that Trump can cause enormous damage to the Obamacare exchanges without actually repealing the law. He can do this by withholding subsidy payments to the insurance companies or just by causing doubt about the viability of the markets. A new study says premiums will be much higher next year precisely for that reason:


Actions by the Trump administration are triggering double-digit premium increases on individual health insurance policies purchased by many people, according to a nonpartisan study.

The analysis released Thursday by the Kaiser Family Foundation found that mixed signals from President Donald Trump have created uncertainty “far outside the norm” and led insurers to seek higher premium increases for 2018 than would otherwise have been the case…

About 10 million people who buy policies through and state-run markets are potentially affected, as are 5 million to 7 million more who purchase individual policies on their own.

Those in the government-sponsored markets can dodge the hit with the help of tax credits that most of them qualify for to help pay premiums. But off-marketplace customers pay full freight, and they face a second consecutive year of steep increases. Many are self-employed business owners.

The report found insurer participation in the ACA markets will be lower than at any time since they opened for business in 2014. The average is 4.6 insurers in the states studied, down from 5.1 insurers this year. In many cases insurers do not sell plans in every community in a state.

Trump has created a self-fulfilling prophecy. By threatening to withhold those subsidy payments, he makes it much more risky for insurance companies to participate in the exchanges. When their risk goes up, their prices — premiums — also go up, partly to minimize that risk and partly because some companies are pulling out due to the instability. Fewer companies competing = higher prices. This is economics 101, something Republicans claim to understand and be all in favor of.

The reality is that Trump’s loose talk and his potential to create serious havoc has made this result inevitable. There’s no way it could not happen given how the system operates. Republicans will, of course, try to blame this all on the ACA itself, and on Obama and the Democrats for passing it. But insurance premiums rose at a significantly lower rate in the ACA exchanges than on the comparable individual insurance markets prior to the ACA and they have continued to grow more slowly afterward. In fact, the average individual health insurance premium — the kind of insurance that has to be purchased by people like me who are self-employed or don’t have employer-paid insurance — would be 50% higher today had the ACA not been passed. That’s how fast those premiums were rising every year before Obamacare was passed.

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