Friday, March 31, 2017

Boom!-----Obamacare 'Explosion' Could Come On May 22nd, Here's Why | Zero Hedge

Obamacare 'Explosion' Could Come On May 22nd, Here's Why | Zero Hedge
"After a stunning healthcare defeat last week, delivered at the hands of his own party no less, Trump took to twitter to predict the imminent 'explosion' of Obamacare...
As it turns out, that 'explosion' could come faster than anyone really expects...
As the Atlanta Journal Constitution points out today, the Trump administration has until May 22nd to decide whether they will continue to pursue the Obama administration's appeal to provide subsidies to insurers who participate in the federal exchanges. 
Of course, any decision to remove those subsidies would likely result in yet another massive round of premium hikes and further withdrawals from the already crippled exchanges where an astounding number of counties across the country have already been cut to just 1 health insurance provider.  
Obamacare 2017And, as we've pointed out before, higher rates = lower participation = deterioration of risk pool = higher rates....and the cycle just repeats until it eventually collapses.
As background, in 2014, House Republicans sued the Obama administration over the constitutionality of the cost-sharing reduction payments (a.k.a. "taxpayer funded healthcare subsidies"), which had not been appropriated by Congress.  
Republicans won the initial lawsuit but the Obama administration subsequently appealed and now Trump's administration can decide whether to pursue the appeal or not.
One key to insurers selling plans in the marketplace are reimbursements they receive called cost-sharing reductions. These aren't the same as the tax credits that people receive to help pay their premiums; it is financial assistance to help low-income people pay their out-of-pocket costs, such as deductibles. The Congressional Budget Office projected those payments would add up to $7 billion this year and $10 billion in 2018.

But for insurers, there's a question over how long that money will be delivered, due to an ongoing political and legal dispute about whether the cost-sharing money should be distributed at all.

In 2014, House Republicans sued the Obama administration over the constitutionality of the cost-sharing reduction payments, which had not been appropriated by Congress. The lawmakers won the lawsuit, and the Obama administration appealed it. Late last year, with a new administration on the other end of the suit, the House sought to pause the proceedings — with a deadline for a status update in late May.

The Trump administration and House lawmakers have to report to the judge this spring. If the Trump administration drops the appeal, it would mean the subsidies would stop being paid — a huge blow to the marketplaces and millions of people. If lawmakers wanted the payments to continue, they would have to find a way to fund them. One opportunity for that is coming up fast, the continuing resolution that must be passed by April 28. If the Trump administration continues the lawsuit, it will be in the odd position of fighting its own party.
The CBO estimates the payments would total roughly $10 billion in 2018..."
Read on!

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