2018 MIDTERM ELECTION

Time: D H M S

Trump to Dems: "Help me screw 24 million or I swear to God I'll screw 18 million!"

 

(For anyone who's offended by the clip above...go see Blazing Saddles, NOW. h/t to Harold Pollack for the idea,)

In this morning's Plum Line at the Washington Post, Greg Sargent notes the head-scratchingly absurd "ransom demand" that Donald Trump is attempting to make with Congressional Democrats by holding CSR reimbursements hostage:

For all the details, see this piece by Jonathan Cohn; the short version is that, if Trump does this, premiums could skyrocket and insurers could flee the individual markets, causing them to melt down and ultimately pushing millions off coverage. As Cohn notes, Trump is basically “threatening to torpedo insurance for millions of Americans unless Democrats agree to negotiate with him.”

...“Dems will want to come to the table,” and this will “force people to do something.” Missing from this explanation is why this would force Democrats to the table, and to what end he hopes this will occur. The basic problem is that Trump is asking Democrats to cooperate with him to bring about an outcome that would be worse than the one he is threatening them with.

The health-care bill Trump is championing would result in 24 million fewer people with health coverage. Those people are getting insurance both on the individual markets and through the Medicaid expansion, which would be phased out, resulting in 14 million fewer people on that program. But if Trump makes good on his threat to tank the individual markets, that might bump 12 million people from coverage, while leaving the Medicaid expansion in place (though it would do plenty of other damage as well). Thus, Trump is basically telling Democrats: “If you don’t give me the money, I’ll shoot only one hostage, rather than both of them.”

Trump's threat is even dumber than that, actually...because destroying the individual market (which killing CSR payments would likely do) wouldn't just devastate the exchange-based market (the 12 million people Sargent refers to above) but would also likely seriously wound the off-exchange market which, as I noted just last week, is something like 6 million more people today. Off-exchange enrollees wouldn't be losing out on any financial assistance, since they're not receiving any as it is...but they would have to bear the full brunt of the 19% average rate hikes caused specifically by the stopped CSR payments (which would come on top of this year's 25% unsubsidized average hikes and whatever other premium increases the carriers were already planning on adding regardless of the CSR issue).

And that's assuming that the carriers don't bail the entire individual market (both on and off-exchange), as Humana recently announced in multiple states and Wellmark and Aetna both just announced in Iowa. If there aren't any carriers offering policies on the individual market on or off the exchange, it doesn't matter whether you can afford to pay full price or not, because there'd be nothing to actually buy.

In other words, to make Sargent's analogy more accurate: Trump is telling Democrats: "If you don't give me the money, I'll shoot only three hostages instead of all 4!"

Sargent also notes that Trump's threat is asinine for another reason: If he kills CSR payments, he'll bear 100% of the blame for doing so...whereas if the Dems do agree to his demands (ie, kicking 24 million people off their coverage), they'd be partly complicit:

To extend the hostage analogy, Trump is threatening to kill one of the hostages in a scenario which would leave only his fingerprints all over the murder weapon.

I'll just add one more angle on this: Even if Trump's "offer" was a good one (i.e., agreeing to some of the 20-odd ACA fixes/improvements I listed here), given his long, disturbing history of lying, cheating, declaring bankruptcy, screwing over contractors, business partners and investors, changing his mind at the drop of a hat and so forth both in business and since taking office...there's absolutely no reason for the Democrats to believe a damned word that comes out of his mouth on healthcare or any other policy whatsoever.

He has zero credibility. None. Zilch. Dems would be fools to trust his word on giving them something they want, much less to go in with him on a deal they don't want.

UPDATE: I should also note one other point: As Jonathan Cohn notes in the piece Sargent linked to:

Trump is spooking insurers ― and they were spooked already

...But simply making the threat is sure to unnerve the nation’s insurers, at a time when they are figuring out what premiums to charge for the coverage they sell through the Affordable Care Act’s exchanges ― and, in some cases, whether to withdraw from those exchanges altogether.

The law’s private insurance exchanges have been a fragile enterprise from the get-go, with insurers struggling to make money and premiums rising quickly in some states ― in part because many people have found the coverage too expensive to afford, and in part because Republicans at the state and federal level have done their best to undermine the program.

As regular readers know, this is something I've been shouting from the rooftops for months now:

Now, put yourself in the position of an insurance carrier executive and/or one of their actuaries. The level of uncertainty in the air is mind boggling. You have five choices for your initial filing:

  1. You can assume that the ACA will end up chugging along for another year relatively unsullied and file accordingly (which may still be high in some areas)
  2. You can raise your rate filings somewhat (call it "ACA + 20%") just in case everything goes to hell, crossing your fingers that the whole mess will work itself out.
  3. You can assume the worst and raise your rate filings substantially (call it "ACA + 40%") to make sure your ass is covered no matter what.
  4. You can decide that the exchanges are too messy and bail on them in some or all counties/states, while raising your rates substantially on the off-exchange market.
  5. You can pull a full Eric Cartman, declare "You know what? Screw you guys, I'm going home!" as Humana already has, and bail on the entire individual market, both on and off the exchanges.

Everything Trump has done this past week is pushing the carriers closer to options #4 or 5.