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Some U.S. health care consumers confront a 'Trump Tax'

Donald Trump is deliberately creating uncertainty in health care markets -- and that's forcing some Americans to pay more for coverage.
US President Donald Trump walks after arriving on Marine One on the South Lawn of the White House in Washington, DC, April 28, 2017.
There's been a fair amount of discussion of late about Donald Trump undermining the U.S. health care system in tangible ways with his political antics, but CNBC highlighted what appears to be the most obvious evidence to date.

North Carolina's largest Obamacare insurer wants to raise premiums by nearly 23 percent, but said most of the increase is due to the failure of President Donald Trump and congressional Republicans to guarantee crucial payments to insurers.Blue Cross and Blue Shield of North Carolina said Thursday it would have asked the state regulators for an 8.8 percent increase if Trump and the GOP-led Congress agreed to continue funding payments to insurers for so-called cost-sharing reductions.Instead, the insurer is requesting an average increase of 22.9 percent for Obamacare plans that now cover about 502,000 people.

There's no real ambiguity here. The private insurer in this case was prepared for a much more modest increase in premiums -- Blue Cross and Blue Shield of North Carolina said its exchange is fairly stable -- but it felt the need to rate rates more, largely because of the uncertainty Donald Trump created on purpose.In effect, these consumers are now going to be hit with a "Trump Tax" on their health care costs.At issue are the cost-sharing reductions -- a key component of the Affordable Care Act, which helps cover middle-class consumers' out-of-pocket costs -- that Trump has decided to turn into a political weapon. The fact that the Republican president has not yet followed through on his threats, in practice, doesn't matter: the threat itself creates uncertainty that will force Americans to pay more for coverage.The White House has been reminded of this repeatedly. As we discussed earlier in the week, America’s Health Insurance Plans has said in no uncertain terms that Trump's CSR games are "the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care.”
There are many aspects of the health care debate that are complex – the president himself recently complained that “nobody” knew how “complicated” this is – but this aspect is relatively straightforward. When private insurers don’t know about the fate of existing federal subsidies, they need to protect themselves against potential future losses imposed by Republicans. It’s Business 101.
And so, by playing games, Trump and his GOP allies are effectively forcing insurance companies to start charging consumers more today because they don’t know what the White House and Congress will do tomorrow.The president, in other words, is imposing a political surcharge on the cost of middle-class health coverage for no reason. By threatening to make things worse, Trump and allies are already making things worse.