Six Ways to Tell If Trump Is Sabotaging Obamacare

The president appears to be rooting for the Affordable Care Act to fail. Here’s a guide to determine whether he’s laying the groundwork.

Carlos Barria / Reuters

With the president pulling the vote to repeal and replace the Affordable Care Act, both the media and health experts have correctly zeroed in what may be the crucial test for Trump and health care going forward: governing responsibly when it comes to the ACA or sabotage. If the president is seen as purposely seeking to destroy the ACA to try to make his claims come true, he will destroy the trust he needs for any chance at future bipartisan legislation.

Unfortunately, Trump’s initial comments after the failure of the Republican replacement bill gave the impression he was cheering for the ACA to fail and for Democrats to come back crawling to work with him. But the president cannot separate himself from health-care cost increases any more than he can separate himself from the economy. For good or ill, presidents tend to own both. And the least-effective way to bring Democrats to the table to help give the president a bipartisan legislative victory would be to give every impression that he is taking non-legislative and administrative actions to sabotage the ACA.

Democrats and most health-care experts agree with the Congressional Budget Office and S&P that the ACA is mostly stable—and as The New York Time’s Margot Sanger-Katz recently put it, “Obamacare is not on the verge of ‘explosion.’” Yet as The Washington Post’s Greg Sargent wrote Tuesday, some Republicans—beyond Trump—are worried about the optics of helping the ACA succeed. Concerned that any good governance would be a “concession that the law can be made to work if Republican officials want to participate in making that happen,” they are considering actions that would actually undermine the narrative that “the law is not inherently or inevitably destined to implode.”

Here are six non-legislative markers to watch to judge whether Trump is doing everything in his power to ensure that what Paul Ryan recently called the “the law of the land” will work as well as possible, or whether he chooses the cynical and even vindictive path of putting the health care of millions at risk to sabotage the ACA.

Will Trump sustain cost-sharing subsidies?

A common critique of the ACA is that its deductibles and co-pays are too high. Republicans have both argued for more patient-centered—or skin-in-the-game, or cost-conscious—models of insurance, and pushed for lower-actuarial value plans. Both of these moves would lead to even higher co-pays and deductibles. But at the same time the Republicans have sought to castigate ACA for higher deductibles they have been actively working through the courts and legislation to end cost-sharing subsidies in the ACA. As Politico’s Michael Grunwald has written, the “current Sword of Damocles hanging above Obamacare … has nothing to do with congressional legislation or Trump’s executive powers. It’s a lawsuit that now goes by the unlikely name of House v. Price, an ongoing effort by Republicans in the House of Representatives to block HHS (now run by one of those former House Republicans, Tom Price) from spending billions of dollars on ACA subsidies.” While it pushed for repeal-and-replace, the Trump administration—and the House—put the lawsuit on hold, so the subsidies remain in place. But if they re-start the lawsuit, and it is successful, it would severely weaken—not strengthen—the exchanges. The ACA subsidies at the center of the suit—otherwise known as cost-sharing reductions, which are different than the ACA tax credits for premiums—limit out-of-pocket costs for the 6 million people who both bought insurance through the ACA exchanges and who earn up to 250 percent of the federal poverty level. These subsidies are expected to total over $7 billion in 2017, and if insurers do not receive these funds, they may leave the exchanges altogether—ending coverage for customers.

Moreover, health plans priced their 2017 plan offerings based on the assumption that the cost-sharing subsidy would be available. If they stayed in the marketplace at all, they would likely have to increase premiums substantially and would fear more problems with adverse selection because those remaining in the market would probably be sicker; as the healthier populations would no longer believe the benefit was worth it. The critical test for the president will be whether he can work with the Congress to move to withdraw the House’s lawsuit and ensure ongoing funding for cost-sharing, and do so before the court-imposed deadline of May 22nd.

Will Trump fail to enforce the ACA’s individual mandate?

The individual mandate—a core part of Obamacare with heavy Republican and conservative roots—is designed to ensure healthier and therefore more stable insurance pools. Trump’s first executive order, though, asked for all parts of his government to “minimize the burdens” of the ACA, which many feared could result in a refusal to enforce the individual mandate. For this filing season, the Obama administration, for example, planned to reject returns from taxpayers who didn’t identify their health-insurance status, as a means to better enforce the mandate. The IRS recently reversed this policy. The Center for Budget and Policy Priorities’ vice president for health policy, Edwin Park, argues that this serves to undermine the effectiveness of the individual mandate: if they don’t have to pick, they aren’t subject to the mandate, and that discourages them from enrolling, he told ThinkProgress. So while Trump’s executive order did not by itself weaken the mandate, it did send a message that the tax penalties used to incentivize mandatory health coverage are not likely to be strictly enforced. The second major test to determine whether the President is choosing sabotage over governing will be if he directs his administration not to enforce the current individual-mandate provisions within the ACA.

Will Trump encourage or discourage enrollment?

Stable health pools require robust outreach to enroll young and healthy citizens. The Obama administration conducted huge outreach efforts to boost enrollment, but when Trump came into office, one of his first big moves was cancelling a $5 million ad campaign that would have urged Americans to sign up for coverage before the January 31 deadline. (The move was later partially retracted due to backlash.) Going into the new year, 8.8 million Americans had enrolled in a ACA marketplace health plan through—about 200,000 more sign-ups than at the same point the previous year. But by the time the January 31st deadline arrived, enrollment (9.2 million) lagged behind the previous year by about 400,000 sign-ups. The difference was likely comprised largely of the young and healthy consumers who typically wait until the last minute to enroll, and who are needed to keep the exchange pools stable. If the Trump administration declines to match the effort and resources the Obama administration dedicated (and, instead, substantially reduces them), it will be a clear indication that it is choosing sabotage over governing.

Will Trump strengthen or undermine critical financing support for the insurance market?

Even before Trump took office, Senator Marco Rubio deeply undermined a key financing mechanism in the ACA. As The New York Times reported, in 2014 the senator slipped a provision into a large spending bill limiting risk corridors—a piece of the ACA designed to help health plans adjusting to new, unpredictable marketplaces. The Rubio provision led to the federal government paying only $362 million to insurance companies in 2015, as opposed to the $2.87 billion they were supposed to receive. This, along with ongoing problems related to adverse selection, contributed to insurers pulling out of marketplaces or raising prices to counteract their losses. Insurers have brought multiple cases questioning the validity of this provision, and recently courts have handed one a victory—though that ruling is likely to be appealed. Judging by the $100 billion state insurance market stability fund that was included in the recently-rejected American Health Care Act and a March 13th letter from Price, the Trump administration knows well that additional funding is critical to ensuring stability in these relatively new marketplaces. In fact, at the encouragement of HHS, Alaska has already applied for a Section 1332 waiver that may provide federal support for the state’s investment in its reinsurance program. Alaska makes the very credible argument that the program’s existence reduced the federal government’s liability in tax credit assistance by reducing overall premiums. The program also lowers premiums for even non-subsidized enrollees who have been exposed to the highest premium hikes. Whether the Trump administration supports or opposes efforts to stabilize insurance markets, then, offers another crucial test.

Does Trump use the bully pulpit to weaken the ACA?

Trump has used the megaphone his office provides in ways that some admire and others, like former Obama top official Brian Deese, call “coercive capitalism” or bullying. He seems to take pride in his ability to strike fear in or weak-kneed compliance from some of the nation’s top CEOs. The question is, will Trump’s signal to major players in the health industry be that they are on his good side or his punitive side if they work to participate in and strengthen the ACA? So whether Trump uses tweets, cell-phone calls, or White House meetings, investing time and political capital in to spur major health-care players to constructively participate in the ACA or conversely, to fear that if they do they will be on Trump’s black list, will be his fifth test.

Will he issue regulations that weaken insurance?

The hardest thing may be to detect an administration that avoids the most blatant acts of sabotage, but looks to kill the ACA with a thousand cuts. It is impossible to detail the full array of actions that could undermine the marketplace. But here is the test: If the overwhelming number of health experts and consumer groups like the National Association of Insurance Commissioners, Kaiser Family Foundation, the American Cancer Society, AARP, and the Georgetown University Center on Health Insurance Reforms conclude it is an attack on the stability of the ACA—it should raise red flag that it is indeed a concerted effort to weaken the ACA.