Money
October 16, 2017 10:00 am
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President Trump unleashed the long-dreaded “nuclear option” against Obamacare late Thursday, dealing a serious blow to his predecessor’s signature legislative achievement two weeks before consumers start shopping for 2018 plans.

The move, which follows several failed efforts by Congress to repeal and replace the 2010 law, will cut money the government pays to insurers to keep health care costs affordable for lower-income Americans. Earlier this year, the Congressional Budget Office estimated exercising the option would increase the number of uninsured by one million in 2018.

The latest change comes on the heels of an executive order Trump signed earlier Thursday to encourage the creation of skimpier insurance plans, undercutting another aspect of Obamacare. Taken together, experts say these moves could unravel the health care law, increase premiums, and send insurers fleeing from Affordable Care Act marketplaces.

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Related article: Trump wants to “fix” Obamacare with low-cost plans. Here’s what you need to know about them

That’s bound to raise questions for anyone who gets healthcare in America. For anyone planning to use Obamacare, enrollment starts Nov. 1. Here is what you need to know.

1You’re middle-class, and you have Obamacare.

If you make up to $48,240 individually (or $98,400 for a family of four), your premiums are likely to increase for 2018, but if you shop wisely there is a good chance you can avoid paying more.

The Trump administration just cut the payments it makes to insurance companies to compensate them for keeping deductibles — what you pay out of pocket before your insurance kicks in — at affordable levels for lower income Americans. The good news for consumers, at least in the short-term, is that the law requires insurers to keep deductibles low whether or not they get this money from Washington (projected to be about $9 billion this year).

Many insurance companies were anticipating the administration’s move and raised premiums — what you pay each month — to make up for the lost government money. That means when you shop on the federal or state marketplace you may see a higher sticker price. But once you declare your income, a different government subsidy kicks in, and your actual cost should drop.

Insurance companies that didn’t raise their premiums for 2018 to offset the lost revenue will likely be operating at a loss (more on that below).

Shop around to find the plan that stretches your subsidy the farthest.

2You’re upper-middle class, and you have Obamacare.

For the roughly 15% of Obamacare customers making more than $48,240 for an individual (or $98,400 for a family of four), you probably won’t be able to avoid higher premiums. Theoretically, healthier consumers could purchase the skimpier short-term plans, although those probably won’t be offered until 2019, per The New York Times, so what they’ll do for next year is anyone’s guess. Older, sicker Americans will likely have fewer options. People with serious health needs tend to gravitate toward the most comprehensive plans they can afford.

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Related article: Open enrollment is coming soon. Here’s what’s different this year

3You have employer coverage, Medicare or Medicaid.

This action does not directly affect you, although the possible, ultimate demise of Obamacare could have ripple effects on all three groups.

4What we don’t know

There are a few wild-cards here. Some states have already begun to sue the Trump administration over ending the payments. Congress could step in to solve the problem and appropriate funds for the stopped payments, although given the gridlock in Washington no one should count on that at this point. If that doesn’t happen, insurers might exit the marketplaces. Whether of not that is likely to happen to you, at least in 2018, might depend on where you live. Each state has its own insurance rules, and some states may allow insurers to break their 2018 contracts when the cost-sharing reduction payments stop.

Insurers that already raised premiums in anticipation of Trump’s move would presumably stick around for next year. But if they have an escape clause, that remains to be seen.

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