“Let Obamacare Fail”: Trump Halts BILLIONS In Health Insurance Payments


“I think we’re probably in that position where we’ll just let Obamacare fail. We’re not going to own it. I’m not going to own it. I can tell you, the Republicans are not going to own it. We’ll let Obamacare fail and then the Democrats are going to come to us.”

— President Donald Trump, July 18, 2017

No, this wasn’t a late night tweet. This wasn’t a plan concocted in some smoke-filled back room, surrounded by GOP strategists on how to win the mid-term elections. This was spoken by the president, aloud and with confidence, in front of the media establishment, broadcast into the homes of citizens of only industrialised nation without a universal healthcare system. Now, according to a report from Politico, the plan of failure could be in effect.

On Saturday, the Trump administration has reportedly halted billions of dollars in payments to private health insurers under the Affordable Care Act (Obamacare), saying they decided to suspend payments because of a February ruling from the Federal District Court in New Mexico.

The formula used to calculate payments was tossed out because it was deemed “flawed”. Politico reports this ruling will eventually be appealed as another court in Massachusetts appears to have upheld the payments.

“We were disappointed by the court’s recent ruling,” Centers for Medicare and Medicaid Services (CMS) Administator Seema Verma said in a statement. “As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold.”

From a CMS statement: “CMS is seeking a quick resolution to the legal issues raised and will inform stakeholders of any update to the status of collections or payments at an appropriate future date.”

These private health insurers rely on what’s known as “risk adjustment payments”, a redistributionist program under Obamacare where the CMS collect money from the insurers themselves, these programs assess which companies have lower-risk enrollees to plans with higher-risk enrollees, alocating the funds appropriately.

This is basically used as an insurance program for the insurance companies, meaning companies can safely cover the cost of the unhealthy populace who actually require their services, from chronic illnesses to other pre-existing conditions, without leaving these companies the only incentive of seeking healthy customers they know will keep their company afloat. In 2017, the cost of keeping consumer prices low was to the tune of around $10.4 billion.

“Any action to stop disbursements under the risk adjustment program will significantly increase 2019 premiums for millions of individuals and small business owners, and could result in far fewer health plan choices,” said Justine Handelman, a senior VP of the Blue Cross and Blue Shield Association, according to The New York Times. “It will undermine Americans’ access to affordable care, particularly for those who need medical care the most.”

What conservatives should note is their anti-big government values, assuiming they’re principled, are coming into conflict with the administration’s actions. Given the presidents wields two contradictory rulings, for a process which has a precedent since the law was passed in 2010, how tied is the administration’s hands really? After all, it’s important to stress these risk adjustment payments — which isn’t collected through a tax — is now frozen and left in possession of the federal government, when it actually belongs to the insurers themselves.

Politico’s insurance sources say “even a temporary, uncertain pause” from unilateral government intervention is “damaging” to the average consumer moving forward. They particularly cited the trade group America’s Health Insurance Plans who stated this “new market disruption” would “create more [economic] uncertainty and drive up premiums for many health plans”.

This could be an electoral disaster for the Republicans moving into the 2018 mid-terms, especially if the Democrats frame the argument as the quote the president has said above. If the judiciary and Congress don’t overturn the ruling or reform the formula as suggested by Dr. Martin E. Hickey, the founder of New Mexico Health Connections, the company that filed the lawsuit in that state, consumers could see their prices increase overtime.

“The risk adjustment formula was extremely biased in favor of large, established insurers and discriminated against new and small insurers, including co-ops like ours,” Dr. Hickey said in an interview on Saturday, according to The Times. “People spin the administration’s decision as Trump trying to do harm, but it’s exactly the opposite. It will allow more companies to get into the insurance market. That will increase competition, and competition will help keep prices down.”

Except this is only a cliche. Under this invisible hand of right-wing libertarian idealism, there’s the assumption that restricting the company’s own insurance money will, in someway, help more companies get into the marketplace and keep prices down. Sounds great… if there was proof to back it up.

Insurance is the business of allocating pools of money. One could say it’s the only justifiable monopoly we can have. Everyone pays in, the weakest take out, the more people under one scheme results in less of a financial burden, thus lower prices on the members. Competitive insurance, where different pools of money are being collected, is harmful to the consumer.Inevitably, insurance members — from citizens to employers under the ACA — will have their prices increased to cover the cost of weakest, or companies that take the risk on the unhealthy will suffer more than those who don’t.

As if stripped right out of Ayn Rand’s novel “Atlas Shrugged”, the bible of both right-wing libertarian and objectivist philosophy, only the selfish succeed under this kind of capitalist competition. Only the consumers won’t have a nice new train to ride. It’ll be big, fat, burdensome premiums, in addition to the uninsured 3 million citizens under the government’s flawed healthcare half-measure. For a so-called populist president, set on “making America great again” while praising Australia for their own healthcare system, the Trump administrations actions don’t exactly scream “great”.

Thanks for reading!

Bailey T. Steen is a journalist, editor, artist and film critic based in Victoria, Australia, but is also Putin’s Puppet on occasion.

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