Looking at the news, it’s easy to be distracted and miss things that are actually happening. While the distractors and puppets argue about who has and hasn’t called military families, changes are afoot with our federal government. Trump has made an official move to attack Obamacare without the aid of Congress. It’s a bold move, and some repercussions are easier to predict than others. Is it enough to save us from Obamacare?
Trump is slashing government spending on cost sharing reduction (CSR) payments. These are subsidies that primarily assist low-income Americans in purchasing health insurance. As mean as it sounds to hit the poorest Americans, this strategy attacks the very heart of the problem with Obamacare.
It is the subsidies that have driven the rising costs of premiums since Obamacare became law. It is CSRs above all else that have helped healthcare costs more than triple in less than 10 years.
In the beginning, killing the subsidies won’t actually change insurance premiums at all, but for recipients the out-of-pocket cost will jump immediately. In other words, people will be paying their own bills instead of having the government grab the tab.
This is a good move back towards free market health care. Even more insurers are liable to pull out of government health exchanges, and this could signal a slow death for Obamacare. It is only through the death of Obamacare that we can reverse the trend of rising insurance and healthcare costs across the board.
Cutting CSRs is close to the limit of what Trump can do. It’s an imperfect attack with many problems. For starters, this move doesn’t repeal the insurance mandate. There is suddenly a large group of Americans who have to pay for insurance that they can’t really afford. Now, this doesn’t mean they will necessarily be paying tax penalties. It mostly just complicates the structure of those penalties, but cutting subsidies isn’t a full-scale solution to subsidized insurance. To put it in simpler terms, cutting CSRs alone won’t make premiums go down. But we can expect it to slow the rate at which they are rising.
The biggest problem with Trump’s limited approach is that it still doesn’t address the supply problem. Potentially, up to $8 billion a year is being freed in the federal budget, but there have been no talks to push that money towards building healthcare infrastructure. Even if Trump wanted to do that, he doesn’t have the authority.
In the meantime, we continue to exist as a country that rapidly increases the demands on our healthcare system without improving the supply. You don’t have to be an economist to see why prices are soaring or to understand the basic solution to the problem. We need more facilities and healthcare professionals. It isn’t happening naturally, so it’s probably time to consider some government-led incentives.
Trump is doing right by the people. To the extent of his power, he’s keeping his promises, and there is tangible good that can come from killing subsidies. The ultimate problem is that healthcare laws are still in the hands of Congress. This is the branch of government that has somehow managed to plummet record-low approval ratings even lower.
By many surveys, Congress now has an approval rating under 10 percent. They have shown that they only care about the status quo and staying in office. With a handful of unimpressive exceptions, Congress has balked at the ample opportunities they’ve had to revitalize the country. At this point, we can firmly expect them to continue to push for stagnation, and the only recourse left is to either remove them from office or terrify them into action.
Trump is nothing less than a warrior. He doesn’t care about the ridiculous backlash. He’s willing to make the hard choices and do what is right for the country. Slashing CSRs is one of those hard choices. He tried to do it in the easiest way possible: with a replacement plan that eased the financial transition for the nation’s most vulnerable. Congress refused.
At this point, we’re going to have to prepare for a rocky transition. But, as long as Trump is around, we can trust that Obamacare’s future is not set in stone.
~ American Liberty Report