President Donald Trump noted Saturday that companies that had been getting rich on tax money are now suffering after he took his long-considered action of ending the subsidies the government pays insurance companies as part of Obamacare.
“Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!” Trump tweeted.
Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!
— Donald J. Trump (@realDonaldTrump) October 14, 2017
Centene, which has a large Medicaid business, dropped almost 6 percent, Molina Healthcare fell more than 4 percent and Anthem tumbled about 3 percent, according to USA Today.
Insurance companies were once big winners under Obamacare.
“Reports show the so-called ‘Big Five’ health insurers – UnitedHealth, Aetna, Cigna, Humana, and Anthem – have all outperformed the broader stock market by a wide margin since Obamacare was signed into law in March 2010,” David Williams, president of the Taxpayers Protection Alliance, wrote on The Daily Caller in 2015.
Subsidies sent about $7 billion to insurance companies in 2017, a number that could rise to $10 billion in 2018, CNBC reported.
That stopped this week when Trump pulled the plug on what are call cost-sharing reductions.
“Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare,” the White House said in a statement on Thursday.
Although the payments are gone, it is uncertain that costs to individuals will go up, because as premiums rise, so do the tax credits individuals can claim.
“We think the federal government might end up paying more,” Chet Burrell, president of CareFirst BlueCross BlueShield, told The Washington Post. “We’re already getting word from other analyses that this could increase federal outflows.”
But consumers might gain, because tax credits are ties to income.
“Federal subsidies are not going away and, as a result of this action, will go up, resulting in lower-cost options for many consumers,” said Greg Bury, a spokesman for the Midwest insurer Medica.
However, the end of subsidies comes as Trump has proposed vast administrative changes to Obamacare that could create an array of new insurance markets and products so that, for example, consumers looking for bare-bones plans could find a cheaper plan than anything on the market today.
Image and Content: Western Journalism