Image Source: Scott Olsen/Getty Images via NYDN
So our Divider in Chief is attacking Obamacare once again. And he's taking no prisoners doing so.
The president issued an executive order preventing the federal government from giving health insurance companies money to make health insurance premiums more affordable for low-income Americans.
The Affordable Care Act made sure ordinary Americans with limited incomes could afford health insurance policies sold on the Obamacare exchanges. The act allows the government to assist health insurance companies with cost-sharing payments so Americans can afford the premiums of health insurance policies.
The executive order, however, flies in the face of the mandate for Obamacare, which is to provide health care coverage at an affordable price for everyone.
I believe the reason our divider in chief is taking money away from health insurance companies is to force them to the negotiating table on the Affordable Care Act.
Much like he did to various labor contractors when building his Taj Mahal, the President is using a scorched-earth tactic to bring the insurance companies and healthcare providers to the table to discuss "repeal and replace" of the Affordable Care Act.
As the federal government takes away financial support from the health insurance companies, the stream of revenue they earn from selling Obamacare policies dries up.
Health insurers will then pull their Obamacare plans from markets where they receive no federal financial support, which will then cause health insurance premiums to go much higher.
Health insurance premiums and costs are an essential driver of inflation in the United States. If health insurance premiums continue to skyrocket on the exchanges, this will leave many Americans unable to afford the coverage they need.
If health insurance companies cannot get money from the federal government which is necessary to offset the costs of higher priced premiums to Americans who cannot afford them, the health insurance companies will pull out of those exchanges altogether.
The health insurance markets in the United States are an oligopoly where only a few players drive market prices for health insurance premiums. As health insurance companies leave the Obamacare markets altogether, this could potentially have a devastating impact on folks getting health care coverage at an affordable price.
I think this tactic of negotiation by destruction will backfire on the divider in chief.
Don't be surprised if members of Congress get together and find a way to block the President's order on taking away their Obamacare funding. Members of Congress from both sides of the aisle receive money from health insurance political action committees. The last thing Congress wants to see is having the hand which feeds them bitten by the President's reckless and immoral negotiating strategy on repealing Obamacare.
If Congress cannot block the executive order to withhold cost-sharing payments, however, many states with health care exchanges will end up like Iowa with just one insurer.
When the state of Iowa needed help for fixing their health insurance exchange, the divider in chief told the Hawkeye state to go fuck itself!
So what does the issue of lost cost-sharing revenue with health insurance companies have to do with finance?
Investors hate uncertainty. If investors sense health insurance companies are in trouble financially because of this executive order, the stocks of health insurance companies like Aetna and United Healthcare will suffer losses in the short term as a result of reducing premiums under the Affordable Care Act & the lost cost-sharing revenue.
In my opinion, this whole political fiasco is going to make universal health care a more palatable political reality. Stay tuned, and in the meantime, please contact your Congressperson and state or local government officials to prevent this executive order from harming millions of Americans financially.
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