The Trump Administration raised major weekend alarms among some of the biggest players in health care with the president’s reported willingness to try a risky gambit by cutting off crucial federal subsidies to help millions of poorer Americans afford health insurance. Some in the GOP see the move forcing opponents to endorse the American Health Care Act, aka Trumpcare. But critics say it will cost millions their coverage and blow up existing insurance exchanges.
Politico, the website devoted to political coverage, reported that President Trump told his top advisers that he wants to cut off for this year $7 billion that Uncle Sam pays to insurers to reduce deductibles and other out-of-pocket costs so an estimated 7 million poorer Americans can afford health coverage on exchanges set up under the Affordable Care Act, aka Obamacare.
Trump is said to think this draconian move will push Democrats to negotiate with the GOP to support Trumpcare. But opponents say it not only will wreck ACA health insurance exchanges, causing insurers to flee losses from participating in them, it will not save money. It will force Uncle Sam to pay $2.3 billion more in other related ACA costs, notably some tax credits.
The nitty-gritty of Obamacare financing can be daunting and complex, as Trump has learned and conceded. But the tussle over the subsidies—which may come to head as soon as Monday in a court case involving GOP members of Congress and the administration—may boil down to a simpler question: If Trump yanks them away and millions lose coverage, or must pay a lot more for health insurance, and if insurers won’t sell policies in huge chunks of the country, who will get the blame for this chaos? The GOP? Or the Democrats?
Republicans have claimed in recent weeks that Obamacare was a failure that needed to be repealed and replaced because it was “imploding.” But Democrats assert the Administration—by administratively easing the mandate for all Americans to carry health insurance, slashing ads urging the public to get coverage under the ACA, and now by prospectively cutting off subsidies for the poor and causing insurers to flee exchanges—is to blame for killing Obamacare.
This dispute could not occur at a more freighted time. Insurers are trying to figure within weeks whether in 2018 to keep selling health policies in ACA exchanges and at what cost. Trump and congressional leaders, as part of a recent budget deal, seemed to have agreed that the ACA subsidies would continue for at least a year.
But GOP officials, especially Trump, seem to have decided on a bare-knuckle approach. The Los Angeles Times has reported that insurers not only have accused the administration of trying to kill Obamacare but also of proffering a deal in which the ACA subsidies for the poor would be kept for a time if Democrats would flip and support Trumpcare. A version of it squeaked out of the House without securing a single Democrat’s vote.
Republicans long have attacked the ACA subsidies, suing the Obama Administration over them and claiming they were funded by the president but without Congress’ required purse approval. A federal judge has allowed the GOP suit to advance. But since the White House has changed from Democratic to GOP control, it has been unclear whether Trump would simply default in the congressional suit or contest its claims. The court has delayed the case to let the new administration settle in. But the matter comes back up on the court docket on Monday.
An unusual group of powerful health care interest groups protested the president’s prospective move to eliminate ACA subsidies, criticizing the move in a pointed letter sent to the White House. The foes include: America’s Health Insurance Plans, American Academy of Family Physicians, American Benefits Council, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association, Federation of American Hospitals, and the U.S. Chamber of Commerce. Attorneys general from 15 states and the District of Columbia also have asked the court to have a say in the subsidies suit, arguing the administration is failing to take into account their states’ interests.
President Trump and the GOP are entitled to oppose the imperfect ACA. But they have yet to fulfill their party’s seven-year promise to replace Obamacare with a program that they claim will cover more people, better, and at a lower cost. The public has decided the House version of Trumpcare is a stinker, supported in polls with numbers in the teens. Senators have said they would all but start from scratch to develop their own Trumpcare. And, after launching that effort with an all-white, old, male GOP study group, the Senate’s deliberations have ground on for weeks with signs the upper, more deliberative lawmaking body is as stuck as the House became in trying to make the many difficult tradeoffs required in health insurance finance.
So, with no ACA replacement in sight, the president on a long trip overseas, Washington sinking fast in Russia-related scandals swirling around the Trump Administration, and with some in the Senate saying an alternative version of Trumpcare might not be ready until the fall, why try to kill Obamacare now? And how will the Administration assist those stripped of coverage in the days ahead?
This quagmire also may worsen more: It’s a bit down in the weeds. But the House hasn’t sent to the Senate the ACA repeal-and-replacement bill that representatives narrowly approved. They acted without receiving a score of the measure from the independent Congressional Budget Office. That official CBO ruling as to what the House bill does and how much it costs may be out in days.
But it may mean the House bill also fails to pass technical requirements, chiefly in its fiscal impacts and savings, so it can be taken up in the Senate under rigorous budget reconciliation rules. The GOP took this lawmaking path to avoid a filibuster by Democrats. If the CBO scores don’t come out just so for House Speaker Paul Ryan, he may have to tweak Trumpcare and resubmit it for another House vote.