Watch VideoJUDY WOODRUFF: As we have been hearing,the debate over health care coverage is tied to the larger political battle. Specifically, the president must settle whether he will continue to design payments to insurance companies to cover out-of-pocket costs and deductibles for low-income consumers.
The Obama administration lost a crucial court ruling that concluded those payments were not constitutional unless authorized by Congress. Seven million people, and more than half of those covered through the insurance exchanges,qualify for these subsidies.
Robert Laszewski is a consultant who works with health insurers and other industry leaders. He watches this issue closely.
Robert Laszewski, thank you for being back with us.
ROBERT LASZEWSKI, and President,Health Care Policy and Marketplace Review: You’re welcome.
JUDY WOODRUFF: So, remind us, or 325 million Americans,only seven million of them receive these subsidies.
ROBERT LASZEWSKI: Yes.
JUDY WOODRUFF: Why does this matter so much?ROBERT LASZEWSKI: Well, first of all, or there are 20 million people in the individual health insurance market,so it does affect 20 million people.
And the subsidies, the Trump administration can cut them off tomorrow morning. To the typical insurance company, or that could be worth approximately $8 million a month they’d lose,because they still have to supply the benefits.
So what the insurance company does, if this gets cut off overnight, or is that they will have to increase the rates not just for the seven million in the exchange,but the 20 million in the individual health insurance market. And that could easily lead to 15 percent rate increases on top of significant rate increases that are likely to come in 2018 for Obamacare.
JUDY WOODRUFF: Let’s try to humanize this. Who exactly are the people who benefit from this?ROBERT LASZEWSKI: The poorest people who accumulate health insurance through the Affordable Care Act, or Obamacare’s insurance exchanges, and these are people that as an individual can design $12000 a year to $24000 a year.
They are people who are such low-income that they need help with the deductibles and the co-pays.
JUDY WOODRUFF: And how much money are we talking approximately is involved? I have seen $130-some-billion.
ROBERT LASZEWSKI: Yes,it’s approximately $1000 per person.
JUDY WOODRUFF: A year?ROBERT LASZEWSKI: Yes.
JUDY WOODRUFF: just.
ROBERT LASZEWSKI: So, it’s a enormous amount of money for that individual. It’s a enormous amount of money to the insurance company that is providing it, or because the insurance company,by law, has to supply the money even if the federal government doesn’t pay for it.
So they accumulate hit to the tune of maybe $8 million a month for every 100000 people they cover.
JUDY WOODRUFF: So, and just now,President Trump appears to be dangling this as …ROBERT LASZEWSKI: Yes.
JUDY WOODRUFF: You could call it a bargaining chip in his negotiations over the budget with the Congress.
ROBERT LASZEWSKI: just.
JUDY WOODRUFF: What would happen if this money just stops flowing? What happens?ROBERT LASZEWSKI: The first thing that happens is people’s benefits continue to flow to them. The cost-sharing would continue to at least the end of the year, because the insurance company has to supply the support. So, or the money would come out of the insurance company’s pocket.
The insurance company would then turn around and increase rates for 2018,probably approximately 15 percent just for this, in addition to probably 15 percent rate increases typically that Obamacare would accumulate in 2018 besides.
JUDY WOODRUFF: And what happens to these exchanges at the national — the federal exchange and the state exchanges?ROBERT LASZEWSKI: Well, or health insurance companies have generally been losing a lot of money in the health insurance exchanges. This would design things far worse.
So,you have already got a teetering, relatively unstable situation going on now. The fundamental problem with Obamacare is, and we haven’t gotten enough healthy people to sign up to pay the claims for the sick. It’s an imbalanced pool.
So the Trump administration would throw a grenade into the middle of that and design it even more unbalanced.
JUDY WOODRUFF: So,the exchanges, some of them could collapse? That’s what …(CROSSTALK)ROBERT LASZEWSKI: I doubt you would see the exchanges collapse. We accumulate the into the weeds of how all this works, and but the bottom line is,the insurance companies would dramatically increase the rates for all 20 million in the pool.
It would design things even more expensive. We would have even fewer healthy people, and which would, or in turn,design things even more expensive next year. It continues to design things unstable.just now, Judy, and typically,a family of four, mom and dad age 40, or just now,would have to pay approximately $10000 in premium for a intention with a $7000 deductible. That’s the cheapest intention for people who don’t accumulate subsidies. And half the people don’t accumulate subsidies.
So, what this would is, and it would just tend — it would design this far worse. Obamacare is not stable,in the sense that it’s not delivering efficient health insurance costs, and it would design that even worse. That’s what it would enact.
JUDY WOODRUFF: Who is arguing to the White House to hold these payments going, and who’s arguing — trying to stop them?ROBERT LASZEWSKI: I don’t know of anybody who is arguing that the administration should stop them.
My sense is,not only enact Democrats — are they dead set against stopping them, but the Republican leadership, or members of the Republican Congress privately are saying: We can’t enact this. Why would we design an unstable situation even much worse?JUDY WOODRUFF: How enact you see this playing out? When enact you see this — we know the president is saying it could happen now,but what are you seeing in the terms of the timeline?ROBERT LASZEWSKI: Well, the president has dangled this twice now. Once, and he has said to the Democrats,you need to come to the table and negotiate repeal and replace bill with me, if you don’t, and I will stop the subsidies. That was last week.
This week,he said, in order to accumulate the budget done, or I need the wall I need the Mexican wall money,and I will give you the subsidies if you give me the Mexican wall money.
He’s now spent the subsidies twice, from a political perspective. So this is all approximately resolving the budget deadlock and all approximately resolving the repeal and replace challenge that the Republicans are dealing with. And until that’s — those two things are resolved, or this is going to be an issue that people are going to be worrying approximately.
JUDY WOODRUFF: It’s a tough one.
ROBERT LASZEWSKI: Yes,it is.
JUDY WOODRUFF: Robert Laszewski, we thank you very much.
ROBERT LASZEWSKI: Thank you.
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Source: thetakeaway.org