Sherry Glied, Dean of New York University’s Robert F Wagner Graduate School of Public Service, and former assistant secretary for planning and evaluation at the Department of Health and Human Services, explains some of the issues in the Obamacare exchanges and how the Trump administration may have contributed to what they call a “death spiral.” Following is a transcript of the video.
DR. SHERRY GLIED: When you think about whether Obamacare is collapsing, I think you really have to sort of think about the current situation and the counterfactual.
Would it naturally collapse? Or is it collapsing in part because the administration is causing it to collapse?
Premiums last year — that is, coming into this year’s cycle — increased quite a lot.
There are a couple of things the administration has done that may be contributing to weak performances of the exchanges. The first thing is that almost the first thing that President Trump did when he entered office is to put out an executive order saying that they would not be strenuously enforcing the individual mandate. So, that likely led to some reduction in signups.
They also turned off the marketing spigot a little bit earlier this year than had been done in prior years.
But, the most important concern, I think, in terms of the stability and future of these markets is that they are supposed to have a stream of money come in to pay for reductions in the cost sharing for low-income subscribers. So, the way that the Affordable Care Act is set up, if you’re a low-income person and you buy a health plan, that health plan gets an extra subsidy so that your deductibles, your cost sharing, what you have to pay when you go to the doctor, isn’t too high.
There’s been an argument between the Republican Congress and President Obama, when he was still in office, about whether the money that was flowing under that piece of the legislation had correctly followed Congressional rules.
But, President Trump has not been clear about whether he will let those payments flow or not. If the payments don’t flow, insurers will be responsible for giving better coverage to low-income people, but they won’t be subsidized for that.
And they’re building that into their premiums, and raising them accordingly.