Donald Trump repeatedly has promised voters he will repeal and replace the Affordable Care Act. Now he and his congressional allies have an obligation to fulfill that promise.
Despite some hysterical claims to the contrary, Congress isn't going to throw millions of Americans out of coverage. Under ObamaCare, most newly insured people have been enrolled in Medicaid, a welfare program, while the bulk of those covered in the troubled exchanges are getting generous taxpayer subsidies.
Meanwhile, there's a more pressing problem. There are more than 10 million people in the individual market who get no ACA taxpayer subsidies for their insurance. Yet they are being hit with staggering premium increases.
In the ObamaCare exchanges, the average increase in the benchmark plan premium will be 25 percent for 2017 in the 39 states using the HealthCare.gov platform, and the exchange deductibles are positively breathtaking. For plans with the lowest premium costs, the so-called bronze plans, the average deductible for single coverage is $6,000 annually, while family coverage climbs to more than $12,000.
Premium subsidies aren't available for many in the middle class. A single person making more than $47,000 is out of luck for help in offsetting premium costs. And if that person makes roughly $15 an hour, he or she likely will be ineligible for cost-sharing subsidies.
Trump and Congress are inheriting unstable insurance markets. In droves, millions of Americans expected to sign up in the exchanges have not; middle-class folks, especially young folks, clearly don't see much value in high-priced insurance with crazy deductibles.
So a larger proportion of older and sicker people, whose claims costs are often higher than their premium contributions, are driving costs higher. And the individual mandate penalty, which is riddled with exemptions, isn't much of an incentive to buy ObamaCare coverage.
The Obama administration's political remedies to enhance competition in the exchanges have either failed or become another excuse for more taxpayer bailouts. Note the stunning collapse of the co-op program — 18 out of 23 have disappeared from the markets — and the equally important but overlooked dismal performance of the federally sponsored multistate plans administered by the U.S. Office of Personnel Management.
The new president and Congress must act decisively to stabilize the insurance markets that exist as well as lay the groundwork for the improved markets they envision. Through a combination of early administrative and legislative actions, they can reduce costs and stabilize the insurance markets. Among the many other provisions to be enacted or implemented, they must do at least the following:
• Reduce the costs in the individual and small group markets by liberalizing insurance rules, particularly the federal benefit and insurance rating rules, which artificially drive up premium costs for young families.
• Provide individual tax relief for Americans buying health insurance if they do not or cannot get health care coverage through their place of work.
Trump and Congress must move quickly to prevent even greater disruption to the badly damaged health insurance markets. While ObamaCare was designed to insure the uninsured, now ObamaCare costs threaten to un-insure those who are insured.
Robert Moffit is a senior fellow at The Heritage Foundation.
