Free at last! Free at last! That's the message for millions who don't get health coverage at work and, until now, faced two dismal options: going without insurance or paying Obamacare's soaring premiums. Last week, President Donald Trump announced regulatory changes that will potentially allow consumers to choose coverage options costing half what Obamacare's cheapest bronze plans cost. Democrats are already accusing the president of kneecapping Obamacare, but in fact these changes will actually reduce the number of uninsured -- something Democrats claim is their goal.
The Affordable Care Act requires everyone to buy the one-size-fits-all Washington-designed benefit package. You have to pay for maternity care, even if you're too old to give birth. You're also on the hook for pediatric dental care, even if you're childless. It's like passing a law that the only car you can buy is a fully loaded, four-door sedan. No more hatchbacks, convertibles or two-seaters.
Trump's taking the opposite approach -- allowing consumers choice. His new regulation would free people to once again buy short-term health plans that exclude many costly services such as inpatient drug rehab. These plans are not guaranteed renewable year to year. The upside is they cost much less.
Short-term plans have been around for years. But after Obamacare premiums began soaring, these plans became very attractive to people who were not eligible for an Obamacare subsidy and balked at paying full freight. Hundreds of thousands of customers signed up for these short-term plans -- that is, until the Obama administration slammed the door shut. A year ago, Obama slapped a 90-day limit on these plans, as a way to force people into Obamacare, no matter how unaffordable. His way or the highway.
Trump is removing Obama's 90-day limit, re-opening that low-cost option. That's good news for some 8 million people currently getting whacked with an Obamacare tax penalty for not having insurance, and another 11 million uninsured who avoided the penalty by pleading hardship. Count on many of them to buy coverage when they have an affordable option. That will reduce the number of uninsured.
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Yet, Democrats are ranting that Trump's regulatory changes are sabotaging the Affordable Care Act. They warn that healthy people will abandon the Obamacare exchanges to buy these low-cost plans, destabilizing the system.
Of course they will. Why shouldn't they? After all, Obamacare unfairly forces the healthy to pay the same for insurance as the chronically ill. Healthy people never reach their sky-high deductibles. Instead, the premiums extorted from them are used to cover huge medical bills for the sick, who consume 10 times as much health care. Of course, people with pre-existing conditions should be subsidized, but instead of burdening healthy insurance buyers in the individual market, the entire nation should chip in. That's what Republican Obamacare replacement bills proposed.
Obamacare's community pricing is the biggest reason premiums have soared since 2013.
That hasn't been a problem for the millions getting subsidies. But it is clobbering the 8.8 million people who get no subsidies from Uncle Sam. Their premiums have more than doubled since 2014 and are set to go up another 25 percent to 35 percent this winter. Expect many of these customers to bail out and buy the cheaper options available because of Trump's new regulation.
A less-detailed part of Trump's announcement gives the green light to so-called association insurance plans, which would allow small employers and perhaps even individuals to group together across state lines. The purpose would be to give them the same purchasing clout as large, multistate employers. Time will tell whether these work out.
Yesterday, Trump seized the initiative after Congressional Republicans fell flat on their faces and failed to address the pain Obamacare is inflicting on consumers stuck in the individual insurance market.
The president should keep going with his regulatory pen. What's next? Trump should use his discretion to stop enforcing the tax penalty on those who don't buy Obamacare-compliant plans, including people seizing the chance to buy affordable short-term plans.
Then Trump should cancel the sweetheart deal his predecessor weaseled for members of Congress and their staff members. Even though the Affordable Care Act requires them to purchase their coverage on Obamacare exchanges and follow the same rules as the rest of us, Obama arranged for them to have a choice of 57 gold plans and have John Q. Public pick up most of their costs. It's an outrage.
Once members of Congress are feeling the same pain as everyone else, they'll be more focused on repealing and replacing the dysfunctional health law. In the meantime, Trump is wisely providing relief where it counts the most -- in people's wallets.
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