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Trump in a recent meeting with opponents of the Affordable Care Act.

Health Costs Could Take Several Years to Drop, Trump Tells Small Business Group

March 13, 2017
"More competition, less regulation will finally bring down the cost of care,” Trump told the group. “Unfortunately, it takes a while to get there because you have to let that marketplace kick in."

President Donald Trump said it could take several years for health insurance prices to start to drop under an Obamacare replacement plan he is promoting, creating a rocky transition period that could pose a risk for members of Congress up for re-election next year and Trump’s own bid for a second term in 2020. 

In a meeting at the White House Monday with a group of small business owners, doctors and individuals who said their plans were canceled or that they saw a spike in health-insurance costs since Obamacare was enacted, Trump offered reassurances but warned that any relief won’t be immediate.

“More competition, less regulation will finally bring down the cost of care,” Trump told the group. “Unfortunately, it takes a while to get there because you have to let that marketplace kick in and it is going to take a little while to get there. Once it does, it is going to be a thing of beauty. I wish it didn’t take a year or two years. But that is what is going to happen.”

Under the House bill to repeal and replace Obamacare, the tax penalty for people who don’t buy insurance would go away immediately. That likely would prompt more healthy people to pull out of the insurance marketplace, causing a spike in premiums, particularly for those who don’t get government subsidies.

Health insurers are currently in the process of setting rates for next year, and are more likely to err on the side of overpricing plans given the uncertainty. Other changes the president has talked about that could drive down costs, like allowing insurance to be bought across state lines or some form of drug-price negotiations, won’t have had time to go into effect and are expected to be included in a separate piece of legislation.

Election Peril

That creates a perilous situation for Republicans who will be up for re-election in 2018. While they will be able to say that they repealed Obamacare, they won’t be able to show many of the potential benefits from their replacement plan by the time voters are casting ballots for every House seat and a third of the Senate. 

For Trump’s re-election in 2020, the plan also creates a challenge as older Americans may face higher out-of-pocket costs when insurers are allowed to charge them more than under Obamacare and age-based tax credits won’t make up the difference. Some lower income voters begin losing Medicaid coverage. 

Democrats have lined up solidly against the bill and some Republicans in the House and Senate have signaled opposition saying it doesn’t go far enough to repeal Obamacare and others arguing that it goes too far. 

‘Adverse Consequences’

Senator Tom Cotton, a Republican from Arkansas, said approving the bill as written would hurt Republicans politically because it would have “adverse consequences for millions of Americans” and wouldn’t deliver on promises to reduce health-care costs.

Top officials from Donald Trump’s administration worked the political talk shows on Sunday to sell the merits of the American Health Care Act, the House bill intended to replace former President Barack Obama’s signature health law, and offer reassurances to the public without getting into the timing of when that will happen.

Tom Price, the secretary of Health and Human Services, said in a pre-recorded interview on NBC’s “Meet the Press” that under the administration’s plan to repeal and replace the Affordable Care Act, more people will have health insurance coverage, and costs will fall. People on Medicaid wouldn’t be forced off, National Economic Council Director Gary Cohn added on “Fox News Sunday.”

Price’s Pitch

“If you create a system that’s accessible for everybody and you provide the financial feasibility for everybody to get coverage, then we have a great opportunity to increase coverage over where we are right now,” Price said. “Nobody will be worse off financially in the process that we’re going through, understanding that they’ll have choices.”

The Congressional Budget Office is expected to provide its evaluation of the bill as soon as Monday. On Thursday, the Brookings Institution estimated that about 15 million people will lose coverage under the replacement plan.

When asked by Bloomberg News what Trump’s message is to those who will lose care or see higher costs because of age, Trump said give it time.

"It will get better, if we are allowed to do what we are going to do," Trump said. "It takes a period of time."

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