Obamacare will go into a death spiral on May 22 if the Trump administration chooses not to continue fighting in court to preserve cost-premium subsidies that were ruled illegal last year.
On May 12, 2016, U.S. District Court Judge Rosemary M. Collyer ruled House v. Burwell that the Obama Administration’s payment of cost-sharing subsidies without congressional approval was a violation of the Constitution’s Appropriations Clause.
The Obama odministration appealed the case to the United States Court of Appeals for the District of Columbia District, where it was renamed House v. Price to reflect the current Secretary of Health and Human Services. Monday, May 22 is the last day for the Trump administration to give notice to the Appellate Court if it wants to continue the appeal.
If Trump drops the appeal and ends the illegal cost-sharing subsidies, Obamacare Silver Plan healthcare premiums will jump by 19 percent. But the national average for Obamacare Silver Plan patient deductibles would also more than quadruple from $709,to $3,064, according to the amicus brief filed by America’s largest hospital groups.
The Democrat-controlled Congress was happy to pass Obamacare’s radical expansion of social justice entitlements, but had little interest in appropriating a $7 billion subsidy for healthcare insurance companies that saw their stock price triple under Obamacare.
President Obama then directed the IRS to make “Section 142 Offset Program” payments to Obamacare-participating insurers from the collection of penalties, fees and legal judgments against taxpayers. Congressman Ron Paul (R-TX) warned in 2010 that the IRS would hire up to 16,500 new agents to increase audits to generate more penalties and fees to subsidize Obamacare.
The Centers for Medicaid and Medicare are expected to release their “Proposed Health Insurance Rate Increases for the 2018 Coverage Year” on June 1. Obamacare premiums have increased by double digits each year since 2015, and 73 insurers announced last year that they were withdrawing from the program. As a result, many rural areas of the U.S. now only have one provider that can charge any rate it chooses.
According to the authoritative ACASignups.net blog, that closely follows state healthcare premium increase requests by insurers in each state, Virginia is looking at a 42.6 percent increase; Maryland a 22.6 percent increase; Oregon a 17 percent increase; and Connecticut a 13.9 percent increase.
Covered California, the Golden State’s Obamacare exchange, has been mum on what type of premium increase its participating insurers will ask for. But the San Francisco Business Journal reported that the California Institute for Regenerative Medicine estimated that Covered California healthcare premiums for 2018 would rise between 28 and 49 percent, not including the 19 percent added cost if the Trump administration drops the illegal cost-sharing appeal.
The hospital groups’ argument to the Appeals Court is that without the court allowing illegal cost-sharing subsidies, Obamacare will go into a “death spiral.”