Obamacare 'Explosion' Could Come On May 22nd, Here's Why

Tyler Durden's picture

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 legislators and health insurers have to make several critical decisions about the 2018 plan year over the next 2 months which could seal Obamacare's fate.

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.  And, 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.

As we've noted before, several large insurers, including UnitedHealth Group and Aetna, have already made the decision to exit Obamacare due to financial losses.  Now, Molina Healthcare is also pondering whether it would be able to continue to participate in the absence of federal subsidies.

Big insurers like UnitedHealth Group and Aetna have mostly left the individual market over the years, citing financial reasons. Several counties across the country only have one insurer offering ObamaCare plans.

 

Now Molina Healthcare is signaling it may downsize its presence in the market, or pull out altogether, if Congress or the administration doesn’t act to stabilize it. Molina has 1 million exchange enrollees in nine states this year.

 

“We need some clarity on what’s going to happen with cost-sharing reductions and understand how they’re going to apply the mandate,” said Molina CEO Dr. Mario Molina.

 

Asked if Molina would leave ObamaCare if the payments are stopped, the CEO said: “It would certainly play into our decision. We’ll look at this on a market-by-market basis. We could leave some. We could leave all.”

 

Mario Molina, chief executive of Molina Healthcare, predicted that if the cost-sharing reductions are not funded, it could result in premium increases on the order of 10 to 12 percent.

While all this uncertainty swirls, health insurers must decide — soon — whether to make rate filings to sell insurance in 2018. The deadline varies by state, but for those that have marketplaces run by the federal government, it is June 21. Filing doesn't mean that insurers will participate; they'll have months more to negotiate and could still drop out. But it's the first step toward offering plans in 2018 and should provide a signal about what the marketplaces are likely to look like.

Meanwhile, it seems pretty likely that Obamacare couldn't survive another collapse in coverage like we saw in 2017 (charts per the New York Times):

2016 healthcare insurance carriers by county:

Obamacare 2016

 

2017 healthcare insurance carriers by county:

Obamacare 2017

 

The first step is admitting you have a problem.

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Boris Alatovkrap's picture

… when statist is take over, prepare for many explosion.

Jim Sampson's picture

Well...  John Titor has already seen it happen.

Boris Alatovkrap's picture

…knew you were going to say that!

toady's picture

Been working the subsidises hard for five+ years now.... I finally gave up and went a different route.

I got what I could, but now it's time to move on....

Handful of Dust's picture

Gee, I'm gonna miss those soaring premiums and astronomical deductibles.

I may actually get a chance to afford to see a doctor some day. If I were a FSA memeber, i get full free coverage and access to th ebest health care.

But being a hard working middle class American, SoweetoCare Unaffordable Insurance denies me.

FrozenGoodz's picture

Notice how quickly repeal & replace turned to do nothing ... hope it fails

 

Thus the depth of intellect flowing through the admin n GOP

 

Rooting for cost-sharing reduction payments to cease - which results in additional increases in premiums ... isn't this the argument for pursuing the appeal? Lol let it implode got ya'll riled up n our leaders have no alternative ... we've been drumpfed ... or duped

toady's picture

I really wish they'd focus on the "repeal" and drop any talk about "replace".

hedgeless_horseman's picture

 

Got a plan for when things do blow up?

Come to Marfa.

Talk about how to disintermediate the health insurers from your healthcare, and get some knowledge and tools to help you do it.  

http://www.zerohedge.com/news/2017-01-10/time-has-come-first-zerohedge-s...

Healthcare: hedgeless_horseman,  Negotiating directly with physicians and hospitals

barndoor's picture

This position is VERY different than that which was sold during the election.

The art of the schlemiel.

hedgeless_horseman's picture

 

http://www.zerohedge.com/news/2017-02-24/what-world-donald-trump

Donald Trump is a Big Government Statist.

Statists want government to have a great deal of power over the economy and individual behavior. They frequently doubt whether economic liberty and individual freedom are practical options in today's world. Statists tend to distrust the free market, support high taxes and centralized planning of the economy, oppose diverse lifestyles, and question the importance of civil liberties.

 

Just like I said in January of 2013...

Bait and switch.

Obamacare is of, by, and for the healthcare insurers.  It is designed to remove competition and assure profits for healthcare insurers, exactly as the Federal Reserve Act does for the big banks.

HIPAA was not about privacy for the patient.  It is solely to guarantee healthcare insurers access to preexisting conditions.

None of this will change until bribery campaign contributions are reformed.

http://www.zerohedge.com/news/2014-09-04/you-have-health-insurance-you-c...

The big health insurers that wrote the ACA and own our elected representatives love Obamacare.  

The mandatory purchase of their product looks pretty safe to me, and the market seems to agree.

Just look at the Google chart of United Healthcare stock vs the SP 500 since the ACA bill...

RightLineBacker's picture

I agree that Trump is not a Libertarian.

I do not agree that he is a Statist.

My personal take of your test indicated that he is a Centrist.

Trump wants to reduce the size, cost and intrusiveness of the US Federal Government, but not to the extent of your degree of being a full-bore Liberian.

PrayingMantis's picture

 

... meanwhile, (take note Tylers), Evelyn Farkas, Obumboclot's Deputy Assistant Secretary of Defense, said, on MSNBC, that the Obumboclot administration had spied on Donald Trump >>> https://www.liveleak.com/view?i=0f2_1490801747 ... (Video)

... caption says: "... OOPS!! MSNBC confirms that President Obama used the federal government to spy on Donald Trump .Yesterday, on March 28, 2017, while speaking live on MSNBC, Evelyn Farkas, who had been Deputy Assistant Secretary of Defense as part of President Obama’s administration, said that the Obama administration had spied on Donald Trump.
A quick online search shows that this has not so far been covered by the New York Times, the Washington Post, Associated Press, Reuters, or any other mainstream media source." ...

 

RightLineBacker's picture

Thanks PM. I've been allover this latest revelation today.

It is BIGGG & getting BIGGGER!

Obama is off the chart Statist, to the point of treasonist.

francis_the_wonder_hamster's picture

RLB, it really comes down to one's definition of what a "statist" is.  One definition is those who look to government for solutions.  Trump is guilty of this, even if he appears to be trying to downsize gov't.  The problem is, he thinks a 10% reduction in gov't intrusion is an accomplishment, and buys him permission for what appears to be his authoritarian governing style.  Sorry, but in my books, that still makes him a statist.

How much gov't is too much?  The state is the enemy of Liberty and any growth of the state is a reduction in Liberty.  You can't get just a little bit pregnant.

DownWithYogaPants's picture

Given what I've seen for many years a 10% reduction would be Nobel Prize winner territory.  Use your brain a bit would you?  There is something called scale and scope and hand waving off a 10% decrease is simply democrat level thinking skills.

francis_the_wonder_hamster's picture

Thanks for the insult.  Feel good?

In any case, the problem with a 10% reduction is that it means they are now just stealing 90% of the amount of my property they were stealing before.  Giving out a Nobel Prize for reducing the theft level seems like perverse praise.

Also, given the CBO's current rules where they only grade the first 10 years of a proposed bill's costs/benefits, our lovely elected leaders have learned to backload all expenses so the real burdens hit in 10 years + 1 day.  So no, I'm not even remotely happy with a "cut" in taxes/spending.

Taxation is theft.

kavlar's picture

That's NOTHING compared to the biggest THEFT ever orchestrated in the history of mankind. http://wp.me/p4OZ4v-r

techies-r-us's picture
techies-r-us (not verified) kavlar Mar 29, 2017 10:02 PM

Good one. Real good one.

lexxus's picture

Them thieves!!!

jeff montanye's picture

the u.s. is the only advanced nation in the world without single payer health insurance.  the only one.  we pay twice what all the other nations pay and have worse results for all but the top 1% or so.  they have longer life expectancies.  check this out: http://www.visualcapitalist.com/u-s-healthcare-system-global-outlier-not...

the solution has been found but the u.s. political parties and, more, their contributors, don't want to find it.

president trump can make a huge difference in u.s. governance without any help from the parties, congress or the campaign contributors (who gave hillary more than twice as much as they gave  him): stop the zionist wars, work for a one state solution in palestine, lift the russian sanctions and investigate, indict, try and punish the banksters and other egregious law breakers.  all solely under control of the executive branch in today's u.s. government.

SmokeyBlonde's picture

No offense, but Fuck You and your totalitarian solutions. May you burn in Hell with Podesta and Reid and Comey you psychopathetic freak ...

bob_bichen's picture
bob_bichen (not verified) kavlar Mar 29, 2017 10:08 PM

RE: chronic SPAMMER kavlar, techies-r-us, lexxus, stizazz, mano-a-mano, etc.   (ALL THE SAME PERSON REPLYING TO HIS OWN COMMENTS)

You have NO IDEA how troubled this individual, the Spammer With One Hundred Log-ons, really is.  He has trolled and spammed his website crap on here forever, always with the same macabre conversations with a long series of "imaginary playmates." It really is quite perverse and whoever "he" is, he seems to really get his rocks off voting himself up arrows and replying to his own comments, and also appears to have no life beyond making off-topic comments with his link to the SPAM-, TROJAN-, VIRUS-INFESTED  "biblicisminstitute,wordpress,com"  (sometimes disguised as a short-URL  http://wp.me  )

He shares this pathology with "blue fin" AKA "TrollAndDump" (formerly known as XYTHRAS - since banned) whose "dailywesterner,com" is, if anything WORSE than the biblicism fetishist, also SPAM-, TROJAN-, VIRUS-INFESTED.

Other ZHers  may wish to take one minute to send an email to abuse@zerohedge.com requesting that all of the "imaginary friends" (in the list below; copy and paste)   be permanently banned for spamming.

As you do that, use your imagination to try to conceive of what type of whackadoo would spend their life in pajamas, fake eyelashes and high heels, eating stale chips and drinking cheap soda from the dollar store, popping zits, and spamming zerohedge. 

Many of the following have been banned but, like crabs and cockroaches, they just seem to come back.  The "short list of imaginary playmates" includes:

kavlar
mano-a-mano

letsit
lexxus
tazs

techies-r-us

stizazz

lock-stock

beauticelli  
mofio

santafe
Aristotle of Greece

Gargoyle

bleu

oops

lance-a-lot
Loftie

toro
Yippee Kiyay

lonnng
Nekoti

SumTing Wong

King Tut
Adullam

espirit

rp2016

Holy hand grenade of Antioch,

etc. etc. etc.

Dr. Tungsten's picture

Peer block list confirms you are correct. 

Miskondukt's picture

There's a block option on here?

Rabbi Chaim Cohen's picture

"My personal take of your test indicated that he is a Centrist."

I would not say that either. A Centrist works actively to find the center of each issue. Trump is hot and cold, one extreme or the other. He is a functionally a Statist. He seems to default to solutions that would ideally come from a benevolent autocratic strong nanny government. This sometimes conflicts with his values that seem to be mostly old-school Regan Democrat, strong defense and fiscally responsible to a point; socially liberal to a point.

The trouble in his approach is that he sees something like Obamacare as a poorly constructed and negotiated policy, not a fundamentally flawed concept to begin with. This is why I completely disagree with people who see Trump as the solution to most of the problems we face. He is a student of the fine points of business not a student of history and civil governance. This is why Bannon is on board.

Trump may be able to temporarily forestall some aspects of the epic problems we face, but I don't think the desperately needed paradigm shift is anywhere in him. He is not a principled man on most subjects, which we need. Everything he has the earmarks of wealth, "winning", public image and legacy. I don't see him as a particularly deep individual.

I do appreciate the fact that he has brought people like Bannon with him, and some of his cabinet are good but many others are some of the worst of the globalist/neocon ilk. The other problem is that he is the rope in a tug-o-war between individualism and collectivism and there is no room for compromise on either side. Hope & pray for the best and prepare for the worst (as always) I guess.

Sanity Bear's picture

Every time I hear a self-proclaimed libertarian use the word "statist", I want to punch him in the head.

And then I think about it a bit more.

And want to punch him in the head again.

And it goes back and forth like that for a while.

It's not that there's something wrong with the term itself, per se - it's just that everyone who ever uses it is inevitably a raging asshole. Not sure why that is, but when the empirical evidence is in such overwhelming agreement, the why matters little.

francis_the_wonder_hamster's picture

"it's just that everyone who ever uses it is inevitably a raging asshole."

Since I'm a "self-proclaimed Libertarian" who used the word "statist" a few posts above this, I guess that makes me an a$$hole.  Ooops, sorry, I meant a RAGING a$$hole.

BTW, while you are pondering all of the Libertarians that you want to puch repeatedly, would you be so kind as to take a break and come up with an equally colorful description of someone who comes onto a message board talking about all the violence they'd like to do to someone they've never met because their use of the word "statist" triggers them?

Sanity Bear's picture

Yeah, a justifiably fed-up and annoyed person who doesn't swallow the Kool-Aid that pretends that your use of "statist" is an ounce different than a lefty's "racist".

They're both designed to say "I'm right you're wrong, I don't care for your opinion but you're damn well going to listen to mine!" AKA Fighting words. In front of any sensible jury the violence in question would be most certainly considered provoked.

Who you going to whine to if you get hit, anyway? The government?

francis_the_wonder_hamster's picture

"Who you going to whine to if you get hit, anyway? The government?"

No, as I mentioned earlier, I'm very much a Libertarian.  We have the tendency to not make threats or initiate violence.  We also seem to be able to handle ourselves pretty well when someone does "tread" on us.

I'm glad you are fed up and annoyed, but your narrow definition of how "statist" is used has you pigeon-holing and assigning a negative interpretation of the term.  Sort of how the Progressives paint everything in absolute terms that they've re-defined.  Ergo, you are doing exactly what you claim annoys you, so feel free to punch yourself.

JB Say's picture

Don't use that term much but will start using it more in hopes that some statist takes a swing. The thing that statists never understand is that when seconds count, the police are always minutes away.

GoingBig's picture

ive been in more fights than i care to remember.  people that talk abiut fighting never have thrown a punch in a real fight.  

silvercity's picture

Anyone who believes that government is necessary is a statist. It is the system that is the problem and not the person in charge of the system. Liberty is the opposite of law. Liberty is the correct way to go.

francis_the_wonder_hamster's picture

"Liberty is the opposite of law."

That is not a definition I'd agree with.  Even anarcho-capitalists entertain the need for some basic laws.

But yes, Liberty is not just the correct way to go, it is the ethical way to go.

Edit: Contract law is an example of something that supports individual liberty when employed properly (without Statist corruption).

silvercity's picture

Contract is the only word you need there. But I understand there is a question of enforcement.

Rubicon727's picture

Present and any further "health care plans" WILL always see who makes out like a bandit: Insurance Companies, Pharmaceutical Corporations, and powerful medical associations. 

There is NO solution given these powerful entities.

Regulate and restrict all three powers and you'll finally achieve "HUMANE Health Care."

SwiffFiffteh's picture

"Regulate and restrict"

No, because government does that, and the reason our health insurance and health care systems have become so screwed up is because of government involvement. Not insurance companies, who are perfectly competent at providing extremely low cost insurance for everything else. Not pharmaceuticals, who are so massively regulated by the FDA that they may as well be rats in a maze. Not "medical associations", which is so vague a term it isn't even worth arguing over.

 

Government is to blame here. The simple reason is because adding government regulation and restrictions has the end result of removing regulations and restrictions in place because of market forces, which are always far superior to any put in place by central planning pencilnecks.

 

This shouldn't be hard to understand.

Rubicon727's picture

Present and any further "health care plans" WILL always see who makes out like a bandit: Insurance Companies, Pharmaceutical Corporations, and powerful medical associations. 

There is NO solution given these powerful entities.

Regulate and restrict all three powers and you'll finally achieve "HUMANE Health Care."

Yog Soggoth's picture

Whoahh, you mean that Mc Donalds could just shut down the most longstanding/popular burger joint in town by subsidy, while hiring illegal aliens by next month? Well, those clever rapscallions. OK, time to let the States decide what is best for all healthcare without any Federal intervention. Competition free for all is the only way we will make healthcare good for patients again. Thank you Dr. Paul for warning us.

Arrow4Truth's picture

Let the States decide? That's your choice. I refuse to allow anyone to decide who or what is best for my health or my care. That is for me to decide, thank you. Party on.

John_Coltrane's picture

Not sure what the purpose of your comment is. That those libertarians like myself who voted for Trump think he's Ron Paul? That you'd prefer the wicked witch? That you wasted your vote on a third party for the sake of moral ideological purity?

Get real, Trump is our human hand grenade to explode establishment heads and destroy the demonrat party which is SOLELY responsible for the modern nanny welfare state (starting with Wilson of League of Nations fame in 1913) which we hate. And so far so good. From his appointments of heads of Education, EPA, HHS, supreme court nominee-what's not to like? He's deporting illegals as fast as possible-the wall will be built. He's ending funding for sanctuary cities and for fake "climate science". He's appointed people who hate these agencies and would like to eliminate them. He's helped to destroy any credibility of the MSM (the propaganda arm of the Demonrat party). And he will sign the Audit the FED bill which, if you follow Ron Paul's newsletter is proceeding nicely through congress and is the first step in defunding the welfare/warfare state started by Wilson in 1913.

No libertarian pays any attention to the "requirement" to buy coverage-it's unenforcable if you make sure you have no refund (i.e. don't give free loans to a deadbeat .gov). I haven't paid a single $ into either penalty nor insurance. My money goes directly to my doctor who doesn't accept any insurance. But that's inexpensive as I haven't visited him for years. We're all lucky that good health has, at best, zero or even negative correlation to health care. Its all genes and lifestyle.

francis_the_wonder_hamster's picture

Great post, but I've got to disagree that the Dems are "SOLELY" responsible for the welfare state.  The Repubs are also very guilty of adding to our burdens, mostly in the form of corporate and military welfare.  Reagan's deficit spending being just one example.

Zorba's idea's picture

Dear HH, upvote + 1000!  The naked truth is we the people do not have a representational government. That has been auctioned off to the highest bidders. Its every average citizen for him/her self. Repeal Citizens United and Oh!No!care!

Praetorian Guard's picture

George Carlin had it right... we are not part of the "Club"... we have OWNERS!!!!!!!! Wake up people...

 

https://youtu.be/cKUaqFzZLxU

 

Come visit us at www.gunsgrubandgold.com - no advertising, free speech, financials, etc. ALL are welcome... as long as you are not a SJW or snowflake... hahahaha

SwiffFiffteh's picture

Please explain why Citizens United should be repealed?