Trump's Obamacare move inadvertently makes many plans cheaper

President Trump inadvertently strengthened Obamacare when he cut off subsidies to insurers, analysts have found. Because of the way the law works, the move resulted in more subsidies going directly to customers, who have been able to use them to get better plans for less or at least keep their plans at the same price.
By Paul Pate | Oct 31, 2017
President Trump's decision to quash Obamacare subsidies to insurance companies and thereby further undermine the health-care law may have unintentionally strengthened it. Health-policy analysts found that many Obamacare enrollees are getting better deals and stronger coverage in the wake of Trump's freeze on the subsidies.

Larry Levitt, a health-policy expert with the Kaiser Family Foundation, said that state regulators and insurers had already anticipated that Trump would cut off the subsidies, which slow premium increases by reimbursing insurers for the costs of offering discount coverage to modest-income customers.

The insurers planned ahead by raising the premiums on one type of plan, the "silver" plans, to offset the loss of subsidies. Consumers themselves can also get subsidies under Obamacare, and the subsidies increase if the premiums increase.

Levitt said that hiked-up silver plan premiums resulted in bigger subsidies to customers, and that customers could use them to buy even more comprehensive "gold" plans at lower costs. In the end, the majority of Obamacare enrollees have either kept their insurance costs steady or even gotten better coverage at lower rates than they would have gotten if Trump had not stopped subsidizing insurers.

"It sounds very counterintuitive that premiums going up a lot could actually lead to many people paying less for health insurance," said Levitt. "But that is the way the math works."

Not everyone comes out ahead, however. Analysts warn that the minority of enrollees who earn too much to get subsidies or who live in states that did not plan ahead will get hit with major premium increases. The federal budget also suffers due to the government having to pay consumers more subsidies to offset the higher premiums.

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