Trump Signs Order to Destroy the Individual Insurance Market

Today, President Trump took his biggest step yet to sabotage Obamacare. My congratulations to three news outlets that had the courage to write proper headlines for their stories:

From top to bottom, these are from the New York Times, CNN, and the Washington Post.

Trump’s executive order is the one I wrote about last week. It basically reclassifies “association” health plans for small businesses as health plans for big businesses, which aren’t required to obey Obamacare rules that protect pre-existing conditions. This allows association plans to legally sell policies only to healthy customers, which will make them much cheaper. Naturally, healthy customers will flock to these policies, leaving the Obamacare exchanges with only the old and sick.

The logical next step is to say that Obamacare premiums will skyrocket, but I’m not sure that will happen. The exodus of healthy customers will be so dramatic and so unpredictable that I can’t imagine any insurer continuing to sell on the Obamacare exchanges. They’ll just stop, and that will be the end of Obamacare.

The same thing will happen outside the exchanges too. Individual health policies will still be required to insure anyone who applies, including those with pre-existing conditions. But with all the healthy customers scampering off to cheaper association plans, it will be all but impossible to figure out the likely composition of the remaining risk pool. So insurers will just exit the individual market completely. It’s only 7 percent of the whole market anyway.

Trump’s plan, obviously, is that this chaos will force Congress to respond. Anything will be better than a collapse of the entire individual market. Even Democrats will be forced to support a Republican plan that will at least prevent the market from imploding.

We’ve never before had a president who used millions of the poor and sick as pawns like this. It’s just plain evil. Our only real hope at this point is that Trump can somehow be stopped before the rulemaking process finishes and this goes into effect. That’s probably about a year or so. Time to get cracking.

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