On Wednesday morning, President Donald Trump, as he is wont to do, took to Twitter.
“I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co’s who have made a fortune w/ O’Care,” Trump tweeted.
I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co's who have made a fortune w/ O'Care.
— Donald J. Trump (@realDonaldTrump) October 18, 2017
The tweet — which was referring to Sen. Lamar Alexander’s (R-TN) recent health proposal — is the latest development in yet another week of health care drama. Like so many other weeks driven by health care drama during the Trump era, it’s been marked by presidential flip-flops, a pattern of putting politics ahead of good policy, and a whole lot of acronyms.
On Tuesday afternoon, Alexander, who chairs the Senate health committee, announced a deal with the committee’s ranking member Sen. Patty Murray (D-WA) that takes steps to stabilize the Obamacare markets. Senate leadership has not yet agreed to bring the bill to the floor for a vote, but, among other things, the deal includes funding for cost-sharing reduction payments.
The CSRs are subsidies the government pays to insurers to help them cover lower-income people. But last Thursday, just before midnight, the White House announced Trump was going to stop making the cost-sharing reduction payments, which were the subject of a 2014 suit filed by House Republicans during the Obama years.
House Republicans won that suit, arguing the subsidies were not officially appropriated in the law, but President Obama appealed and continued making the payments, which are worth an estimated $7 billion per year.
“The Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies lawfully under Obamacare,” a statement from White House Press Secretary Sarah Huckabee Sanders said Thursday.
There it is. No more cost sharing subsidies. pic.twitter.com/6bkjhpjzDV
— Margot Sanger-Katz (@sangerkatz) October 13, 2017
The CSRs, Sanders’ statement said, are a “bailout of insurance companies through unlawful payments.”
But on Tuesday, following Alexander’s announcement about the deal, Trump opened the door to supporting the plan.
“We’re going to have a great solution ultimately for health care, OK?” he told reporters during a press conference with Greek Prime Minister Alexis Tsipras. “And they are working together and I know very much what they’re doing, OK?”
The Alexander-Murray bill seems like the Senate’s most earnest attempt so far to actually craft health care policy that will help people access better care for less money. But health care has always been more about politics than policy for Trump, and he shut the door again Wednesday morning with his tweet saying he could never support bailing out insurance companies (even though he was open to supporting it the day before).
It’s important to note that the CSRs are not a bailout of insurance companies. Insurers rely on the payments to help cover the costs of insuring lower-income people, and the subsidies are vital for keeping health care costs affordable for Obamacare enrollees.
Ending the payments would shift costs onto insurers, which will raise premiums in response. Earlier this year, when insurers filed rate requests with the government, many insurers that requested rate increases cited their expectation that Trump would stop paying the CSRs as a reason why.
Nationally, 80 percent of people receive subsidies to help pay their premiums. The subsidies ensure that consumers pay only a set fraction of their income toward health care premiums, so even if insurers raise premiums in response to Trump’s decision not to make CSR payments, many people won’t actually see their health care costs change.
But people earning more than four times the federal poverty level — about $100,000 per year for a family of four — don’t receive subsidies. About 20 percent of people who buy insurance through the Obamacare markets don’t receive subsidies, and that population will face the premium increases without help from the government.
Trump’s decision to stop paying the CSRs could have other consequences, too. Chief among them is the fact that the move could cause insurers to pull out of the markets before enrollment begins next month, though no major insurer has signaled it aims to leave the market since the announcement last week.
Additionally, ending CSR payments won’t actually save the federal government money.
In August, the nonpartisan Congressional Budget Office projected the fallout from ending the CSR payments and doing so would ultimately increase the federal deficit by $6 billion in 2018, $21 billion in 2020, and $26 billion by 2026.
The other player in the CSR fight is a group of states that filed suit against Trump last week in an effort to keep the funds flowing. On Wednesday, the group, which includes 18 states and Washington D.C., filed a motion for a temporary restraining order that would force Trump to continue making the CSR payments until the case is decided.
The Alexander-Murray deal could also keep the payments coming — but on Wednesday afternoon, Sanders confirmed Trump does not support the Alexander-Murray deal.
“We said all along we want something that doesn’t just bail out insurance companies but actually provides relief for all Americans and this bill doesn’t address that fact,” Sanders said at the press briefing. “We want to make sure that’s taken care of and think this is a good step in the right direction. This president certainly supports Republicans and Democrats coming to work together, but it is not a full approach and we need something to go a little further to get on board.”