This week the Trump administration managed to impose a massive tax increase on middle-income families beginning in 2018. You could be excused for missing this story if you were focusing instead on President Trump?s draconian budget or Republican efforts to take away health care from tens of millions of people. But, indeed, on Monday, the Trump Health Care Tax was born.
The new tax, 19 percent or more of premiums, will be added on top of the cost of policies purchased through the individual-market health insurance exchanges. It is a result of Trump?s decision to create as much chaos as possible in the health-care market ? in this case by not committing to continue to reimburse billions of dollars of cost-sharing payments owed to insurers just as they set prices for next year. And the president couldn?t have been more clear about why he?s imposing this tax: He thinks disrupting the Affordable Care Act exchanges, which serve more than 12 million Americans, will force Democrats to agree to proposals in his budget and in the House health-care bill that would take coverage away from tens of millions.
There is something even more troubling about this tax. In an unusual twist, it will not be paid to the government but to insurance companies. That?s because, under the ACA, 83 percent of people who are insured on the exchanges are protected from premium increases by tax credits provided by the government. If premiums go up, government payments to insurers go up with them. Trump is even willing to sacrifice federal dollars to sink the ACA.
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