A couple of stories that explain different parts of the same phenomenon: First, we read at the New York Times that companies are not spending the Trump tax cuts in ways that will help their employees, or the economy.
President Trump promised that his tax cut would encourage companies to invest in factories, workers and wages, setting off a spending spree that would reinvigorate the American economy.
Companies have announced plans for some of those investments. But so far, companies are using much of the money for something with a more narrow benefit: buying their own shares.
Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companiesâ€™ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.
But the purchases can come at the expense of investments in things like hiring, research and development and building new plants â€” the sort of investments that directly help the overall economy. The buybacks are also most likely to worsen economic inequality because the benefits of stocks purchases flow disproportionately to the richest Americans.
Like nobody saw that coming, huh? The other story, at the Los Angeles Times, is about how Trump’s “reforms” to the Affordable Care Act are costing us more in tax dollars while insuring fewer people. Michael Hiltzik writes,
Those fiscal geniuses in the White House and Republican-controlled Congress have managed to do the impossible: Their sabotage of the Affordable Care Act will lead to 6.4 million fewer Americans with health insurance, while the federal bill for coverage rises by some $33 billion per year.
Also, by the way, premiums in the individual market will rise by an average of more than 18%.
Heck of a job.
Â I’ve said it before, and I’ll say it again — to Republicans, the purpose of a health care system is to maintain a profitable health care industry. If the Free Market (blessed be It) can’t accomplish that alone, then government will prop it up so that industry CEOs can continue to make more money than God. If, along the way, some people actually receive health care, that’s considered acceptable if it doesn’t eat too much into profits. Perhaps they can write it off as public relations, or something.
One of the Trump “reforms” driving up cost are short-term policies.
Â Expansion of short-term non-compliant policies: 2.5 million more Americans without minimum essential coverage. Short-term policies, which were limited under the Obama administration to three months maximum and no renewals, would be expanded under Trump to last up to a year. Under the law, short-term policies don’t count as real Obamacare insurance.
But that’s okay, because the individual mandate has been de-fanged. There’s no penalty for not having pliant insurance any more.
The mechanism by which the GOP policies will crater the individual insurance market isn’t hard to understand. Both major initiatives â€” eliminating the individual mandate and offering bare-bones policies â€” siphon younger, healthier consumers out of the individual market. …
…The economically rational response for the healthy in that segment would be to pay $100 or less a month in premiums and barely use any services over the course of the year. The danger, of course, is that anyone can get hit by a bus or find themselves holding an unexpected cancer diagnoses. Then they’re screwed.
Catherine Rampell writes more about this at WaPo:
…next year there will be about 9Â million fewer Americans with real health insurance coverage than would have been the case had pre-Trump policies stayed in place, according to a report released Monday by theÂ Urban Institute.
By â€œreal health insurance,â€ I mean plans that actually cover things â€” as opposed to plans that just take your money and then, legally, pay few if any claims.Â (These are sometimes nicknamed â€œbuffalo plans,â€ because they pay out pretty much only if you get run over by a herd of buffalo.) …
…They donâ€™t, for example, have to be issued to people with preexisting conditions. There also are no federal requirements for what kinds of care they have to cover, or how much of it. If these plans want to take your premium money and then never pay out aÂ dime on prescription drugs or cancer treatments, under federal law, they donâ€™t have to.
And the data show they often donâ€™t, which is why this is such a lucrative business to be in.
If, as expected, younger and healthier people drop “real health insurance” for these scam plans, that would leave a higher concentration of older and sicker people in the regular insurance pool, which of course is expected to drive up premiums a whole lot more. And when premiums go up, taxpayer subsidies have to go up as well. So, fewer people covered, higher government cost.
Of course, the next step will be to get rid of the subsidies. That’s right after they “privatize” Medicare.