Trump Threatens to Gut Obamacare Markets

By Paul Demko and Josh Dawsey, Politico

19 July 17

The president has repeatedly told aides and advisers that he wants to end the subsidy payments, and he has not changed his position.

onald Trump holds a fuse in his hands — and he could decide to light it and blow up Obamacare insurance markets as soon as Thursday.

That’s the deadline for sending out the next monthly Affordable Care Act subsidies to health plans to defray the cost of care for individuals with low incomes. The president has toyed for months with the idea of stopping the payments to force Democrats to the negotiating table to avoid the prospect of millions of vulnerable Americans losing access to health coverage.

rump has repeatedly told aides and advisers that he wants to end the subsidy payments, and he has not changed his position, according to several people who have spoken with him. “Why are we making these payments?” Trump has asked.

With Senate Republicans’ Obamacare repeal effort in shambles and GOP leaders lacking the votes to bring a bill to the floor, Trump could finally follow through in a bid to regain the upper hand.

“My advice to the plans this morning was, ‘If you get it, cash the check quickly,’” one health care lobbyist who represents insurers said Tuesday.

Two White House officials said a final decision on the subsidies had not been made. One person said various aides and advisers had issued conflicting opinions in recent days.

Asked whether Trump would actually pull the plug, a different administration official said this time is “different” — and that administration officials had begun looking at how they would end the payments. “But no decision has been made,” the official said.

Immediately halting the subsidies — estimated to be $7 billion this year — would likely tip the already shaky Obamacare markets into chaos. Insurers already are queasy about the uncertainty roiling the marketplaces as the 2018 open enrollment season approaches.

House Republicans sued to block the subsidy payments in 2014, arguing that they were illegally funded by the Obama administration. They prevailed at the lower court level, but that decision is being appealed. That means the Trump administration has discretion to decide unilaterally whether the payments continue.

The markets are already wobbly. Currently, 44 counties lack health plans willing to sell coverage next year, potentially leaving 30,000 individuals without any insurance options. Eliminating the subsidies would likely send more plans heading for the exits and drive up premiums charged by plans that stick around.

“Either or both of those means millions of working-class families will be without access to coverage or care,” said Ceci Connolly, president and CEO of the Alliance of Community Health Plans.

Greg Scott, who oversees Deloitte’s health plans practices, predicts an exodus.

“You would have many health plans that would look for the nearest exit, literally, and look for ways to extricate themselves from a burning building,” Scott said.

Trump’s insistence that Republicans could shift the blame to Democrats for market mayhem seems like wishful thinking. Polling data strongly suggest that Americans will hold Republicans accountable for future problems since the GOP has unified control of the White House and Congress. The Kaiser Family Foundation’s monthly tracking poll has consistently shown that about 6 in 10 Americans would blame Republicans for a meltdown.

Forcing Democrats to come to the bargaining table also seems like a pipe dream at this point. They’re quietly enjoying watching Republicans twist in the wind after facing seven years of brutal Obamacare attacks and losing control of both chambers of Congress.

“I’d be stunned if they want to sit down and work on a bipartisan solution,” said Thomas Scully, who oversaw Medicare and Medicaid under President George W. Bush.

Democrats insist they’re serious about working with Republicans on bipartisan fixes to the Obamacare markets. But first Republicans will need to give up on plans to repeal the 2010 law and overhaul the Medicaid system.

“There’s absolutely political benefit to Democrats to sit on the outside and watch them fail, but that comes at a big cost to the country,” said Sen. Chris Murphy of Connecticut. “If health care comes off the table as a political issue in 2018, there will be plenty of other things to fight about.”

But Murphy pulls no punches in assigning blame if the markets collapse in the coming months.

“If the health care system dies, there’s one executioner and one executioner only — Donald Trump,” he said. “He has undertaken a campaign of sabotage that he is now threatening to step up.”

Thursday’s payments are likely to go forward because the process is already well underway and would be difficult to unwind. But there are no guarantees.

One person who spoke to Trump earlier this week said he was determined that — no matter what happens — his administration won’t be blamed for the failure of Obamacare. “I don’t think he realizes that he will be blamed for this,” this person said. “It could be a bad move.”

“We are still considering our options,” a White House spokesman emailed on Monday. “Congress could resolve any uncertainty about the payments by passing legislation and reforming Obamacare’s failed funding structure.”

The Senate repeal bill contained two years of cost-sharing subsidy payments to bridge the divide between Obamacare and the retooled insurance marketplace. Key congressional Republicans, such as House Ways and Means Chairman Kevin Brady of Texas and Lamar Alexander of Tennessee, chairman of the Senate Committee on Health, Education, Labor and Pensions, have voiced support for continuing the payments.

“I think they’re going to have to be paid,” Sen. Orrin Hatch, chairman of the Senate Finance Committee, said Tuesday. “You can’t let people be without basic health care.”

But when asked whether the Senate should appropriate money for the payments, the Utah Republican demurred.

“That’s beyond my pay grade,” he said. “I’m not sure.”

Divisions among Senate Republicans are unlikely to make it easy to reach agreement on some kind of short-term marketplace stabilization package. Trump’s threats won’t help bring about consensus. Even senators who once expressed support for such fixes are reconsidering, given the uncertain path forward.

“I was saying we should bite the bullet a couple of months ago, when we could have been seen as being proactive and doing the responsible thing because insurance carriers needed to get some certainty to help stabilize the markets,” Sen. Ron Johnson (R-Wis.) said Tuesday. “I don’t know if that time has passed yet or not.”