The Trump administration announced on Thursday (US time) that he would immediately halt cost-sharing reductions. These $7 billion in annual subsidies to health insurers allow around 7 million low-income Americans to afford coverage.
Earlier in the day, the president signed a far-reaching executive order that makes it easier for individuals and small businesses to buy alternative types of health insurance with lower prices, fewer benefits and weaker government protections.
This is not "letting" Obamacare fail. Many nonpartisan experts believe that these active measures are likely to undermine the pillars of the 2010 law and hasten the collapse of the marketplaces.
The Pottery Barn rule comes to mind: You break it, you own it. Yes, the plate you just shattered had some cracks in it. But if you dropped it on the ground, the store is going to blame you.
As Barack Obama learned after the Great Recession, with heavy Democratic losses in the 2010 midterms, it's hard to blame your predecessor for problems two years after you take office. Especially when your party has unified control of the federal government. No matter how much it might be the previous guy's fault, many voters won't buy it. People have very short attention spans.
-- The uncertainty about what Trump would do has already driven premium prices higher for 2018. Now it's going to get worse. Amy Goldstein and Juliet Eilperin explain why: "Trump has threatened for months to stop the payments, which go to insurers that are required by the laws to help eligible consumers afford their deductibles and other out-of-pocket expenses. But he held off while other administration officials warned him such a move would cause an implosion of the ACA marketplaces that could be blamed on Republicans ...
The fifth year's open-enrollment season for consumers to buy coverage through ACA exchanges will start in less than three weeks, and insurers have said that stopping the cost-sharing payments would be the single greatest step the Trump administration could take to damage the marketplaces ... Ending the payments is grounds for any insurer to back out of its federal contract to sellhealth plans for 2018."
The White House says the executive order will give people more choices, but: "Critics, who include state insurance commissioners, most of the health-insurance industry and mainstream policy specialists, predict that a proliferation of these other kinds of coverage will have damaging ripple effects, driving up costs for consumers with serious medical conditions and prompting more insurers to flee the law's marketplaces."
"The most far-reaching element of the order instructs a trio of Cabinet departments to rewrite federal rules for 'association health plans' - a form of insurance in which small businesses of a similar type band together through an association to negotiate health benefits.
These plans have had to meet coverage requirements and consumer protections under the 2010 health-care law, but the administration is likely to exempt them from those rules and let such plans be sold from state to state without insurance licenses in each one. Among policy experts, critics warned that young and healthy people who use relatively little insurance will gravitate to association health plans because of their lower price tags. That would concentrate older and sicker customers in ACA marketplaces with spiking rates."
-- Beyond yesterday's directives, Trump has been personally involved in undercutting the system. Juliet discovered a remarkable example last week about just how hands-on the president has been: "For months, officials in
Republican-controlled Iowa had sought federal permission to revitalize their ailing health-insurance marketplace. Then President Trump read about the request in a newspaper story and called the federal director weighing the application.
Trump's message in late August was clear ... Tell Iowa no."
"HHS has slashed grants to groups that help consumers get insurance coverage," Juliet adds. "It also has cut the enrollment period in half, reduced the advertising budget by 90 percent and announced an outage schedule that would
make the HealthCare.gov website less available than last year. ... HHS has told its regional administrators not to even meet with on-the-ground organizations about enrollment."
-- Trump thinks his latest gambit will bring Democrats and Republicans to the table: The president suggested on Twitter this morning that he wants to negotiate now:
"We are going to pressure Congress very strongly to finish the repeal and replace of Obamacare," he said yesterday at the signing ceremony for his executive order.
"Trump has privately told at least one lawmaker that the payments may continue if a bipartisan deal is reached on health care," the Wall Street Journal reports.
-- In this way, cutting off cost-sharing payments is reminiscent of Trump's decision to end DACA last month. He has just created an artificial political crisis by ending another Obama-era program. He believes that Congress
will swing into action so that millions of vulnerable people are not harmed by his decision. Instead of undocumented immigrants who were brought to this country as children, this time it's the poor and chronically ill who
It is a risky way to govern. Consider the DACA fix: Trump gave Congress a six-month deadline to figure out a way to
protect millions of Latino kids from deportation. Then on Sunday night he unveiled a list of hard-line immigration demands that has made it much harder to get a deal. Now the March 5 deadline is getting squishy. Sen. James Lankford
(R-Okla.) said last night, for example, that Trump told him he was willing to "give it some more time" to allow lawmakers to find a solution for the "dreamers" if Congress does not pass legislation.
-- Bipartisanship is possible on health care, but don't count on it: Negotiations to prop up the marketplaces have proceeded in fits and starts for the past few months. Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the chairman and ranking member on the health committee, have publicly said the payments should not end immediately.
They've been trying to come up with a solution that could get support from both parties.
Propping up the system would be widely portrayed in the conservative media as nothing more than a
bailout for big insurance companies. Mitch McConnell has been reluctant to make any "fixes" to the system so long
as the chance of repealing the ACA was still on the table. He's been especially reluctant to let his members vote to fund
Even if a deal was reached in the Senate, conservatives in the House won't want to vote for anything that their grass-roots supporters will see as protecting the status quo. Connect the dots, and the result is that there will be immense turmoil without a solution. At least for a while.
Meanwhile, Democrats believe they are the ones with leverage. Nancy Pelosi and Chuck Schumer called the end of the cost-sharing payments "a spiteful act" of "sabotage." They expressed confidence in a joint statement that the politics
will play in their favor: "Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it."
-- Coming attractions: Litigation is likely to continue. House Republicans sued HHS over the cost-sharing reduction payments during Obama's second term. "A federal court agreed that they were illegal, and the case has been
pending before the U.S. Court of Appeals for the D.C. Circuit," per Amy and Juliet. "House Speaker Paul D. Ryan (R-Wis.) said in a statement that the administration was dropping its appeal of the lawsuit."
California Attorney General Xavier Becerra (D) called the president's action "sabotage" and predicted last night that he could get a judge to side with him. "We are prepared to sue," he said in a statement, adding that other Democrats are ready to join him.
-- Regardless of the outcome, last night's news also guarantees that health care will be a top issue in the 2018 midterms and 2020 presidential election. All the turmoil will create continuing headaches for lawmakers.
This is something that they are going to hear about every time they return to their districts or states - not just from constituents but donors, hospitals and business owners.