Trump's Threat To Cut U.S. Payments Raises Uncertainty In Health Insurance Market

The U.S. government is scheduled to make large payments to health insurance companies to help offset discounts required by the Affordable Care Act. President Trump has threatened to stop the payments.

AILSA CHANG, HOST:

Senate Republicans are back on Capitol Hill today, but they aren't exactly feeling optimistic about restarting efforts to repeal the Affordable Care Act. The third-ranking Republican in the Senate, John Thune, said yesterday, until someone shows us how to get that elusive 50th vote, I think it's over. President Trump tweeted over the weekend, repeal and replace is not dead. He has also threatened to quote, "let Obamacare implode," by refusing to make large payments to health insurance companies. NPR health policy correspondent Alison Kodjak joined us to talk about what's next. Hey, Alison.

ALISON KODJAK, BYLINE: Hi, Ailsa.

CHANG: So Tom Price, the Health and Human Services secretary, has been a major opponent of the Affordable Care Act. And on "Meet The Press," he kind of hedged when asked whether he now plans to implement the current health care law. Here's what he said.

(SOUNDBITE OF TV SHOW, "MEET THE PRESS")

TOM PRICE: Our job is to follow the law of the land, and we take that mission very, very seriously.

CHANG: So it sounds like he does want to keep Obamacare going. Is that what he's saying there?

KODJAK: Well, sort of except that he followed that up by saying that it's the job of HHS to ensure the health and well-being of the American people. And then he said, Obamacare is hurting people. So it's really hard to tell whether he really wants to implement that law.

CHANG: Well, what could Secretary Price actually do? Or by extension, what could President Trump actually do or not do that would affect how Obamacare actually works?

KODJAK: So there are a couple of areas. One deals with insurers and markets, and the other's the public. For insurers, they've already done a couple of things through regulation that would make insurers happy. They are requiring people who drop their insurance one year to pay their back premiums before they can buy insurance the following year. And they're making it a little harder for people to jump in and out of the markets. That should help. But they're also saying maybe they won't enforce the individual mandate, which would mean a lot of individuals may or may not buy policies if they're young and healthy and don't think they need insurance. And those are the people who keep costs down.

CHANG: Is that part of what President Trump means by letting Obamacare implode? I mean, how would he actually make that happen?

KODJAK: Well, one of the main things is those cost-sharing payments that are due at the end of the month. The government has been making these payments to insurance companies to offset these discounts. And with the threats not to make the payments, insurance companies are saying they're going to have to raise their rates by a lot, as much as 20 percent, just to offset that money they're losing. And so if they don't make those payments, then insurers will either drop out of the market or raise their rates. And then individuals will drop out of the market. And that is where let Obamacare implode could happen.

CHANG: And as the market spirals downward like that, who is likely to be best served and least well-served?

KODJAK: Well, as prices go up, it's the people who are buying insurance on the markets and who don't get subsidies from the federal government who are the most hurt because they have to pay those full prices, and those prices are going up. People who are getting subsidies from the federal government, they're pretty protected. But it's the taxpayers who'll end up footing the bill because they have to cover those rising costs.

CHANG: This sounds really dire. I mean, do things really look that bad?

KODJAK: Well, not necessarily because there's action happening in other places. In Congress, there are reports that there are these bipartisan groups trying to figure out ways to fix the Affordable Care Act, to stabilize the market to make it work better. And out there in the states, they're doing things too. The Medicaid Expansion Law is still in place, so there were states that were planning or at least preparing to expand Medicaid. They could still do that, and that could get a lot more people covered.

These would be states that are looking, perhaps, to expand Medicaid for the first time. When it looked like the Affordable Care Act was going to be in place in perpetuity, the states who had ignored it, many of them started contemplating that it would be good for them to expand Medicaid too.

CHANG: NPR health policy correspondent Alison Kodjak. Thank you.

KODJAK: Thank you.

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