The mere threat that Obamacare will be dismantled or radically changed — either by Congress or by President Trump himself — has persuaded several big insurance companies to stop selling policies or significantly raise premiums. The practical effect is that some lower-income and middle-class families may have no good options for insurance and will have to spend more on health care.
There’s no new Affordable Care Act yet; the House passed a very bad bill, but the Senate has yet to act. Still, in places like Iowa, Nebraska, and Tennessee, companies such as Aetna and Wellmark are so spooked by the uncertainty that they are considering abandoning the market. Other insurers are asking state regulators for permission to raise premiums by as much as 53 percent. This should trouble not just the 12.2 million people who have bought insurance on federal and state exchanges, but also policy makers, since Washington may have to spend more on subsidies if premiums go up.
Mr. Trump, not surprisingly, describes things differently. He claims that uncertainty in the insurance industry is evidence that Obamacare is collapsing and needs repeal, not that he and his allies have created the uncertainty. This is disingenuous nonsense. On the whole, insurance markets in much of the country are on stable footing and will remain so if Congress doesn’t do things to undermine Obamacare, according to a March report by the Congressional Budget Office. And insurers selling policies under the A.C.A. actually did better financially in 2016 than in the year before, according to an April report by Standard & Poor’s.
So, why are insurers fearful and threatening to quit Obamacare or jack up premiums? There are a few big reasons. First, the House passed a bill this month that would take insurance away from at least 24 million people by slashing spending on Medicaid and cutting the subsidies the government uses to help people buy insurance. Second, Mr. Trump has threatened to stop making about $7 billion in payments to insurance companies to help lower the cost of co-pays, deductibles and other out-of-pocket costs for lower-income and middle-class families. If the administration carries out that threat, insurers would raise premiums by about 19 percent, according to the Kaiser Family Foundation. Third, insurers are worried that the Trump administration will stop enforcing the A.C.A. provision that requires people to buy health insurance or pay a penalty. That could hurt them by reducing the number of younger and healthier people who sign up.