The decision to continue the cost-sharing subsidies, aka illegal ransom payments, totaling roughly $7 billion a year, is problematic for a number of reasons:
Just like his decision to continue Obama’s amnesty, the continuation of cost-sharing subsidies without an appropriation from Congress is unconstitutional. This is pure lawlessness and demonstrates the hypocrisy of the entire Republican Party.
Not only are insurance companies making record profits, and therefore are not even in need of a bailout, their profits have not come from consumer satisfaction but from the taxpayer. More than half of their profits come from Medicare and Medicaid, augmented by Obamacare’s Medicaid expansion. They are also propped up by preferential treatment in the tax code and the force of a government mandate coercing individuals to purchase and employers to provide their product. To give them more bailouts on top of that is disgusting.
What does it say about an industry that without illegal subsidies cannot survive without another 20 percent increase in premiums over and beyond the built-in projected increase? Yes, the coverage regulations of Obamacare are crushing, but on the other hand those regulations have given six insurance companies a de facto monopoly on the individual market. No competition can ever enter the marketplace in such a regulatory climate.
Trump is getting bad advice from his advisers. Even if one agrees with the premise of paying the ransom, he still has a few more months before it would affect the following years’ premiums. Immediately suspending the bailout in August is the only leverage he has to demand free market reforms. And even with the bailouts, Iowa’s only insurer announced a 57 percent increase in premiums next year. The problem is third-party payer and Obamacare, not a lack of bailouts.
Even under this convoluted system of health care, the insurance companies have no right to cost-sharing subsidies. These subsidies go towards discounting co-payments and deductibles. Unlike premiums (which are already subsidized through the base law), co-payments and deductibles are what the consumer does NOT pay to the insurer. These are payments to the provider. As such, the bailout should go to the provider, not the insurer. This demonstrates just how much insurance companies have been granted an unconstitutional monopoly on our health care system.
The insurance and hospital cartels, which have lobbied so passionately for Medicaid expansion, are responsible for exacerbating the opioid crisis. Their government-sponsored racket of open-ended third-party-payer rather than a system built upon a doctor-patient relationship has led to the overprescribing of opioids. A recent study found that about 25 percent of all Medicaid patients were prescribed opioids. This is a disgrace and would never have happened in a free market system — without an unlimited taxpayer spigot lining the pockets of the “private” cartel. Are we to reward them with continued Medicaid expansion, a government-sponsored monopoly, and unconstitutional bailouts? Oh, and by the way, every version of the health care bill already had billions of dollars in opioid bailout payments for supposedly “fixing” the problem created by the very recipients of the double bailout cash.
It’s time for Trump to negotiate with the insurance companies the same way he is playing hardball with Kim Jong Un. For far too long, we have only paid ransom to the North Koreans and have taken the military option off the table. Trump must immediately signal a 180-degree shift in health care policy as well — stop paying the ransom, and instead, threaten the health care version of the military option. He should use the debt ceiling, tax reform, the budget, and the leverage of blocking the bailouts to demand equal treatment for direct primary care and health-sharing associations as a complete alternative to the government-sponsored monopoly of the insurance cartel. That is how you bring the insurance companies to the table and lower premiums.
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.