Trump’s Budget Proposal Includes Health Insurer Bailout
Trump’s budget proposal for FY2019, unveiled on Monday, aims to cut $1.4 trillion in Medicaid spending and $5 billion in Medicare spending, replace the majority of food stamp (SNAP) spending with deliveries of local produce, and repeal the Affordable Care Act and its famous Medicaid expansion.
Despite the GOP’s utter failure to repeal and replace Obamacare last year, Trump’s budget proposal makes it clear that he expects lawmakers to give it another go. According to the Department of Health and Human Services (HHS), repealing Obamacare will save the government an estimated $680 billion over the next decade.
“The Administration is committed to rescuing states, consumers, and taxpayers from the failures of Obamacare and to supporting states as they transition to more sustainable healthcare programs that provide appropriate choices for their citizens,” reads the budget.
In what is being hailed as a “payout to insurance companies,” the proposal also recommends reinstating cost-sharing reduction payments that were halted last October.
The payments, long opposed by conservatives, are designed to reduce out-of-pocket costs for low-income Americans enrolled in Obamacare. The ending of ACA payments last fall contributed to an increase in premiums this year.
“It is disappointing to see this administration proposing to restart the misguided practice of using taxpayer dollars to subsidize big insurers,” says Tim Phillips, President of the Koch-backed conservative organization Americans for Prosperity.
The budget also allocates $812 million for risk corridor payments to health insurance companies.
“It’s unacceptable that programs that matter to #Florida could see cuts while the gov’t continues to bail out private insurers to protect them from consequences of Obamacare,” tweeted Senator Marco Rubio (R-FL), who for years has opposed the risk corridor program.
Risk corridor payments were created to help stabilize premiums for people with huge medical bills by requiring that companies with big profits help defray costs for companies with losses. The risk corridor program ended in 2016, but not all insurers received their money.
The government owes insurers roughly $12.3 billion.
Editor’s note: Subsidies to insurance companies are part of the cause of spiraling prices. This industry badly needs reform.