By Delaney McPherson
Carolina Reporter & News
Last Thursday, President Trump signed an executive order that ended healthcare subsidies to insurance companies that offer discounted insurance through the Affordable Care Act, known as Obamacare. But some South Carolina experts say the action may spawn unintended market and political consequences.
Ending Obamacare has been a pillar of Trump's campaign since the beginning, but so far all of his attempts to do so in the Senate have failed. In response, Trump took matters into his own hands to begin the process and started by stopping the subsidies.
With the subsidies ended, insurance companies will have to make up the money they're losing by charging higher premiums to middle-class customers.
“That’s the problem in most markets, there’s only one provider," said Orgul Ozturk, an associate professor at the University of South Carolina School of Economics. "If you have a nice competition, if people still have incentives to be in the market, that’s good. But without the subsidies they are not going to have the incentive so that is a problem."
The decision to end the subsidies will ultimately end up costing the government money, but it will put pressure on the Senate to approve a new healthcare plan. Following the executive order, President Trump tweeted, “The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”
The GOP has been actively trying to oust the Affordable Care Act since it was enacted into law in 2010. When Republican Trump was elected president, it seemed that the GOP might finally get their wish. However, the push to remove the ACA has been surprisingly difficult given the Republican-dominated Senate.
Late Tuesday afternoon, Sens. Lamar Alexander, R-Tenn, and Patty Murray, D-Wash., came up with a plan that could restore funding for the subsidies for two years. President Trump initially praised the "short-term" plan in a speech in the Rose Garden, but later published a tweet that seemed to indicate he was not happy with the plan. "I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co's who have made a fortune w/ O'Care," the tweet read.
The political fallout from Trump's executive order is clear to at least one GOP senator.
On Sunday, just a few days after President Trump signed the executive order, Sen. Lindsey Graham, R-S.C. told CBS that if Obamacare is not repealed, the Republicans will lose the Senate, which will not bode well for Trump’s 2020 campaign.
"We lose our majority and I think President Trump will not get reelected,” Graham said.