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How GOP sabotage is creating an unintended 'Trump tax'

  • GOP effort to sabotage Obamacare is creating a "Trump tax" by raising health-care costs.
  • The uncertainty around the law has pushed insurers to raise rates more steeply or quit state marketplaces.
  • Most voters want Democrats and Republicans to work together to find a solution to the crisis.
President Donald Trump stands with House Speaker Paul Ryan of Wis.
Jabin Botsford | The Washington Post | Getty Images
President Donald Trump stands with House Speaker Paul Ryan of Wis.

"The best thing we can do… is let Obamacare explode. Let it be a disaster because we can blame that on the Democrats." – President Trump

Congressional Republicans may be hitting legislative roadblocks on their quest to enact repeal of the Affordable Care Act (ACA), but their efforts to sabotage the law by undermining health insurance markets are already achieving success. And the result is raising Americans' health care costs – creating a Trump Tax.

President Trump has outright admitted this sabotage should be the Republican strategy stating: "The best thing we can do… is let Obamacare explode. Let it be a disaster because we can blame that on the Democrats."

Take just what's happened over a three-day span last week. In a crucial House v. Price (previously House v. Burwell) court hearing last Monday over the ACA's cost-sharing reductions (CSRs) the Trump Administration had an opportunity to provide needed certainty and stop threatening to defund health care.

These payments help keep health care affordable for millions of families. Defunding them will force premiums to increase by 19 percent according to the Kaiser Family Foundation – a 19 percent Trump Tax for millions of working families.

Certainty regarding CSRs reimbursement is the number one thing that insurance companies have repeatedly and emphatically said they need to stay in the market. Instead the Trump Administration injected more uncertainty into the market, punting the ruling for another 90 days to conveniently fall just a week after the deadline for insurers to file next year's final rates.

48 hours after this court hearing, Blue Cross Blue Shield of Kansas City announced it would pull out of the Kansas and Missouri marketplaces, which would leave almost 25 western Missouri counties bare. The next day, Blue Cross Blue Shield North Carolina filed a premium increase 14 percent higher than it would have if CSRs were guaranteed for 2018 – a 14 percent Trump Tax for hundreds of thousands of North Carolinians.

North Carolinians with the state's most popular plan would be hit with a 40-percent increase in the deductible and out-of-pocket maximum due to the Trump Tax. The company's president and CEO directly attributed this increase to the Trump Administration and Congress:

"The failure of the administration and the House to bring certainty and clarity by funding CSRs has caused our company to file a 22.9 percent premium increase, rather than one that is materially lower," BCBS NC President and CEO Brad Wilson said. "The rate increase would be 8.8 percent if the CSRs were guaranteed for 2018."

Last week's impacts are just the latest in a series of steps Republicans have taken to defund health care and to make the health insurance market fail. Let's review the major ways the Trump Administration and Congressional Republicans have worked to sabotage the Affordable Care Act:

This sabotage is the opposite of what the American people want from the Administration and Congress. Instead of a partisan process like the House took, Americans want Congress and the Trump Administration to stop the partisan obsession with repeal and instead work across party lines to keep what works in the ACA and fix what doesn't.

In a new national survey from Hart Research, fully 79 percent of voters say that any changes to the healthcare system need to be bipartisan and senators should work across the aisle to improve our health care.

If Republicans don't, Americans are clear who will be held responsible. In poll after poll Americans - including a majority of Republicans - say that they'll hold Republicans and President Trump responsible for any issues with healthcare and the Affordable Care Act going forward.

With the American people knowing who to hold responsible for the Trump Tax that raises their health care costs, the Republicans' strategy of exploding Obamacare could very well backfire.

Commentary by Meaghan Smith, a vice president at SKDKnickerbocker who served as a senior advisor and communications director at the U.S. Department of Health and Human Services during the Obama Administration. Follow her on Twitter @MeaghanRSmith.

For the latest commentary on the markets in the U.S. and around the world, follow @cnbcopinion on Twitter.

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