Andy Slavitt was acting administrator of the Centers for Medicare and Medicaid Services from 2015 to 2017.
This week the Trump administration managed to impose a massive tax increase on middle-income families beginning in 2018. You could be excused for missing this story if you were focusing instead on President Trump’s draconian budget or Republican efforts to take away health care from tens of millions of people. But, indeed, on Monday, the Trump Health Care Tax was born.
The new tax, 19 percent or more of premiums, will be added on top of the cost of policies purchased through the individual-market health insurance exchanges. It is a result of Trump’s decision to create as much chaos as possible in the health-care market — in this case by not committing to continue to reimburse billions of dollars of cost-sharing payments owed to insurers just as they set prices for next year. And the president couldn’t have been more clear about why he’s imposing this tax: He thinks disrupting the Affordable Care Act exchanges, which serve more than 12 million Americans, will force Democrats to agree to proposals in his budget and in the House health-care bill that would take coverage away from tens of millions.
There is something even more troubling about this tax. In an unusual twist, it will not be paid to the government but to insurance companies. That’s because, under the ACA, 83 percent of people who are insured on the exchanges are protected from premium increases by tax credits provided by the government. If premiums go up, government payments to insurers go up with them. Trump is even willing to sacrifice federal dollars to sink the ACA.
But let’s take a step back. This all started as a cynical ploy by Congress that got further out of hand when Trump won the presidency. In between more than 50 votes to adjust or outright repeal the ACA, Congress used a number of budget tricks and lawsuits to undermine the law. The effect was to eliminate billions of dollars in funding designed to keep rates lower, prevent millions of Americans eligible for Medicaid from accessing coverage and force a dozen co-ops designed to increase competition out of business.
Even with these headwinds, the exchanges are far from failing. Four million new people were added during last year’s open enrollment. Insurers have consistently reported profitability, putting the market on track for lower premium increases and more competition in 2018. Independent analysts at Standard & Poor’s affirmed, “If it remains business as usual, we expect 2018 premiums to increase at a far lower clip than in 2017.” But as bipartisan insurance commissioners and the nonpartisan Congressional Budget Office just confirmed, Trump’s tampering is badly destabilizing things.
When Trump became president, many of us wondered publicly whether the administration would at least carry out the law in ways that served the interests of the American public. We didn’t have to wonder for long.
Trump made clear right away what his strategy was. “The best thing we can do, politically speaking, is let Obamacare explode,” he said from the Oval Office. And Trump and his team proceeded to pour the oil and light the match.
Step one was to stop outreach during the week of open enrollment when the biggest number of young and healthy people get covered. Trump quickly took steps to stop enforcing the ACA’s individual mandate and adopted regulations increasing paperwork for consumers, reducing tax credits that help people pay premiums and shortening the period for consumers to sign up. And Trump’s budget indicates he is planning more cuts to outreach and consumer assistance. All of these steps reduce coverage and increase costs.
Worst of all for consumers, Trump’s move this week may be the last straw for insurers. Faced with an administration that has made clear it will do what it can to cause the exchanges to fail, insurers are questioning whether they can continue to participate. The administration is proving that the one thing it can succeed at is failure.
Remarkably, all of this is in service of something even worse: a plan to take health-care from 23 million Americans, raise costs for tens of millions more and eliminate access to care in large parts of the country.
With the CBO score of the House health-care bill out, it’s now time for senators to cry foul. Foul on a secretive process; foul on a bill that hurts millions of people; foul on ripping apart Medicaid coverage for kids, seniors and people with disabilities; and foul on taking away substance-abuse treatment and mental-health care from millions of people who need it. For a bill that could impact the course of Americans for generations to come, this is no time to “voice concerns” or “discuss challenges.” And it’s no time to act as a ratifying body for a president who doesn’t have the best interests of its constituents in mind.
The only way to alter the self-fulfilling, destructive course that Trump has set us on is for senators to publicly say that they will never vote for a bill that robs people of coverage and to tell the administration to undo the Trump tax, stop the antics that are driving instability in the exchanges, and do the real work of improving Americans’ access to high-quality health care.