BREAKING: DOG CATCHES CAR
So, the day after the election, I noted that on top of the rest of the awful, there's another fun tidbit: Due to the nature and timing of the ongoing House vs. Burwell lawsuit, it's conceivable that President-elect Donald Trump (See? I'm starting to get used to typing that!) could effectively wipe out most of the ACA immediately upon taking office by simply giving up on fighting the lawsuit and stopping Cost Sharing Reduction subsidies as early as February 1st.
This, in turn, would not only cause havoc across the individual insurance industry, it would also trigger an "escape clause" among the carriers, potentially (subject to whatever the state laws allow) letting them immediately cancel their policies. As in, the currently-in-effect policies which people had just had go into effect a month earlier. And this would have nothing to do with any action taken on the part of the Republican-held Congress.
How many people could potentially see their policies yanked out from under them?
Well, assuming the policies weren't cancelled, the 6-7 million people receiving CSR assistance (below 250% FPL and enrolled in Silver plans) would still receive that assistance from the carriers...but you're talking about $625 per enrollee per year, or over $4 billion. Since the carriers aren't likely to eat this cost out of the goodness of their hearts, they'd have two choices: Either raise their premiums even more (at least $50 per month per enrollee), or drop out of the exchanges altogether...which the "exit clause" would give them the right to do. This, of course, has already been happening to some degree for other reasons, leading to UnitedHealthcare, Aetna and Humana seriously reducing their exchange participation for 2017...but it would grow into a complete stampede for the doors in 2018 if the CSR payments were cut off.
In cases where state laws didn't prevent carriers from pulling the plug, many of them would do so immediately, which would mean several million more people--pontentially every exchange policy enrollee, which I project to be roughly 12.4 million or so as of February--would see their policy go up in smoke. Various grace period rules might mean that they're still covered until as late as, say, May 31st, but that would be it.
UPDATE: I had to rework the above two paragraphs to make them more coherent; I misworded it originally to make it sound like CSR recipients would keep their policy while losing CSR, which isn't the case at all. Sorry about the confusion.
The Republicans in Congress are starting to realize this, so now, as Jeffrey Young of the Huffington Post reports, they're scrambling to delay the final ruling on the very lawsuit which they themselves brought in the first place:
House Republicans want a federal appeals court to let them delay the next phase of their lawsuit against President Barack Obama that would have devastating consequences for the Affordable Care Act.
A lower court this year ruled in favor of House Republicans’ claim that the Obama administration is illegally spending $5 billion a year on subsidies for the poorest Obamacare enrollees. With Obama on his way out, the Justice Department’s appeal would pit House Republicans against President-elect Donald Trump’s administration next year.
According to Politico, House Republicans don’t want the appeals court to take up the case, House v. Burwell, while Congress and Trump devise a health care agenda to succeed the Affordable Care Act, so they have formally asked the court to wait.
Yes, that's right: After 6 years, the dog has finally caught up to the car, and doesn't have a clue what to do with it.
But wait, there's more:
Even if the court accedes to the House Republicans’ request for a delay, the threat of these subsidies disappearing remains. Trump will retain the authority as president to end the subsidy payments if he wants to. Neither he nor his transition team has taken a public position on the matter.
And we all know how much millions of people and the insurance industry loves having a Sword of Damocles hanging over their heads for the next four years.
Yup, the fate of the entire insurance industry (along with the rest of the economy...and the safety of the nation...and, for that matter, the safety of the world, given our nuclear stockpile) now rests in the capable hands of a man who gets into Twitter wars with broadway musicals and former Miss Universes.
Sleep well, America.