Trump’s Threats Against Obamacare May End Up Getting MORE People Insured (DETAILS)


On Saturday, Donald Trump, clearly still frustrated by his massive failure to corral the votes necessary to pass his healthcare overhaul, went back to Twitter to vent his rage:

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Trump talks big about Obamacare “collapsing” or “imploding” or whatever it is he thinks is happening. But the truth is, he’s doing his best to speed the process along.

Everyone has known since day one that the Affordable Care Act was far short of perfection. Many were disappointed, in fact, that there was no single-payer option — such as “Medicare For All” — included in the debate before the ACA was passed. But the fact is, it is the law, and there’s only so much Donald Trump can do to undermine it. And ironically, the threat he repeated on Twitter (oh, he’s made this threat before) on Saturday may end up strengthening Obamacare for those who need it most.

It gets slightly complicated, so follow along.

When Trump uses the word (in all caps) BAILOUTS, he means two different things for insurance companies and for Congress members. Either way, it’s revenge, and that’s the mark of a truly desperate man. As for Congress, who knows? Perhaps he’s referring to reducing federal aid to states, like he just threatened Alaska with after Senator Lisa Murkowski voted down his Trumpcare fiasco. But for insurance companies, we can know exactly what he means, because the ACA which, again, is the law, requires the federal government to make certain payments.

There is an inherent risk to Obamacare in Trump withholding subsidies: Many insurance companies might choose to leave the exchanges. But for those that don’t, it’s the details as to what money Trump can withhold that matter.

Legally, the federal government may only stop payments on what are called “cost-sharing subsidies.” People who have lower incomes get the most help in buying insurance through discounts on premiums and co-pays. Insurance companies are required under the ACA to give the discounts, then the government pays them back. Those are the subsidies Trump is threatening.

But the government only pays subsidies on one of the four types of plans: Bronze, Silver, Gold, and Platinum plans are available, but the feds “bail out” only Silver-level plans. That means if payments were withheld, premiums on those plans would likely increase (by about 19%, according to an analysis by the Kaiser Family Foundation).

Here’s where Trump isn’t doing the math: By law, if premiums increase on the Silver-level plans, the tax subsidies available to low-income Americans would have to increase accordingly. In fact, they would be required to increase to the point where a “benchmark” Silver-level plan would cost someone making 100-400% of the federal poverty level almost nothing. That would, in turn, cushion purchasers of more expensive Silver plans against the rate increase. But with more money in tax credits available, consumers may elect to purchase less expensive plans, or even Bronze-level plans — which would end up being free.

Would YOU sign up for a free plan? I certainly would.

Kaiser estimates that the net cost to the federal government would be 23% more than what Trump would save by not paying the cost-sharing subsidies.

Unless Trump can somehow get the GOP to write, debate, and pass something new on health care — the likelihood of which hovers between zero and zero-point-zero percent — he is stuck with Obamacare. He can try to undermine it all he wants, but if he goes this route, he’ll be cutting off his nose to spite his face.

Nobody tell him, okay?


Featured image via Chris Kleponis/Getty Images

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