President Trump sabotages ‘Obamacare,’ will blow up health care markets out of spite

President Donald Trump, who promised to repeal and replace “Obamacare” on day one in office — “it will be easy” — suffered humiliating deafeats after several failed attempts by Congress. For a man fixated on erasing any legacy of Barack Obama out of jealousy and spite, he has been stewing about ways he can sabotage “Obamacare,” and with it the health care of millions of Americans, outside of congressional action. It is purposeful, malicious and amoral.

The New York Times reports that, as I predicted, Trump has gone nuclear in House v. Price, ending the Cost Sharing Reduction subsidies (CSRs) to insurers for low income Americans. Trump to Scrap Critical Health Care Subsidies, Hitting Obamacare Again:

President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.

The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.

Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies were cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.

“The government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement.

It concluded that “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

In a joint statement, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had “apparently decided to punish the American people for his inability to improve our health care system.”

“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “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.”

Lawmakers from both parties have urged the president to continue the payments. Mr. Trump had raised the possibility of eliminating the subsidies at a White House meeting with Republican senators several months ago. At the time, one senator told him that the Republican Party would effectively “own health care” as a political issue if the president did so.

* * *

The future of the payments has been in doubt because of a lawsuit filed in 2014 by House Republicans, who said the Obama administration was paying the subsidies illegally. Judge Rosemary M. Collyer of the United States District Court in Washington agreed, finding that Congress had never appropriated money for the cost-sharing subsidies.

The Obama administration appealed the ruling. The Trump administration has continued the payments from month to month, even though Mr. Trump has made clear that he detests the payments and sees them as a bailout for insurance companies.

This summer, a group of states, including New York and California, was allowed to intervene in the court case over the subsidies. The New York attorney general, Eric T. Schneiderman, said on Thursday night that the coalition of states “stands ready to sue” if Mr. Trump cut off the subsidies.

Mr. Trump’s decision to stop the subsidy payments puts pressure on Congress to provide money for them in a spending bill.

Senator Lamar Alexander, Republican of Tennessee and the chairman of the Senate health committee, and Senator Patty Murray of Washington, the senior Democrat on the panel, have been trying to work out a bipartisan deal that would continue the subsidy payments while making it easier for states to obtain waivers from some requirements of the Affordable Care Act. White House officials have sent mixed signals about whether Mr. Trump was open to such a deal.

The decision to end subsidies came on the heels of [another] executive order, which he signed earlier Thursday.

With an 1,100-word directive to federal agencies, the president laid the groundwork for an expanding array of health insurance products, mainly less comprehensive plans offered through associations of small employers and greater use of short-term medical coverage.

Dylan Scott at Vox.com explains. Trump’s executive order to undermine Obamacare, explained:

Trump is asking federal agencies to look for ways to expand the use of association health plans, groups of small businesses that pool together to buy health insurance, and to broaden the definition of short-term insurance, which is exempt from the Affordable Care Act’s rules, administration officials said.

The ultimate impact will depend on any new regulations written as a result of the order, but overall, the Trump administration could make cheaper plans with skimpier benefits more available — and experts worry that will damage the ACA’s marketplaces.

* * *

Policy experts warn that together, these changes could represent a serious threat to Obamacare: Trump wants to open more loopholes for more people to buy insurance outside the health care law’s markets, which experts anticipate would destabilize the market for customers who are left behind with higher premiums and fewer insurers.

The fear is that Trump’s action could lead to many association health plans being exempted from core Obamacare requirements like the coverage of certain essential health benefits. It could also potentially allow some individuals to join these plans too, which could hurt the individual insurance marketplaces by drawing younger and healthier people away from them. In much the same way, short-term insurance could also take healthier people out of the law’s markets.

The effect won’t be immediate: Administration officials said they didn’t expect any new regulations to be implemented before the end of the year. But Trump’s order does present a long-term risk to the ACA.

The Times report also emphasizes this point:

Most of the changes will not occur until federal agencies write and adopt regulations implementing them. The process, which includes a period for public comments, could take months. That means the order will probably not affect insurance coverage next year, but could lead to major changes in 2019.

* * *

[M]any patients, doctors, hospital executives and state insurance regulators were not so happy. They said the changes envisioned by Mr. Trump could raise costs for sick people, increase sales of bare-bones insurance and add uncertainty to wobbly health insurance markets.

Chris Hansen, the president of the lobbying arm of the American Cancer Society, said the order “could leave millions of cancer patients and survivors unable to access meaningful coverage.”

In a statement from six physician groups, including the American Academy of Family Physicians, the doctors predicted that “allowing insurers to sell narrow, low-cost health plans likely will cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.”

While many health insurers remained silent about the executive order, some voiced concern that it could destabilize the market. The Trump proposal “would draw younger and healthier people away from the exchanges and drive additional plans out of the market,” warned Ceci Connolly, the chief executive of the Alliance of Community Health Plans.

* * *

The executive order’s quickest effect on the marketplaces would be the potential expansion of short-term plans, which are exempt from Affordable Care Act requirements. Many health policy experts worry that if large numbers of healthy people move into such plans, it would drive up premiums for those left in Affordable Care Act plans because the risk pool would have sicker people.

“If the short-term plans are able to siphon off the healthiest people, then the more highly regulated marketplaces may not be sustainable,” said Larry Levitt, a senior vice president for the Kaiser Family Foundation. “These plans follow no rules.”

* * *

Association plans have a troubled history. Because the plans were not subject to state regulations that required insurers to have adequate financial resources, some became insolvent, leaving people with unpaid medical bills. Some insurers were accused of fraud, telling customers that the plans were more comprehensive than they were and leaving them uncovered when consumers became seriously ill.

* * *

Mr. Trump’s order followed the pattern of previous policy shifts that originated with similar directives to agencies to come up with new rules.

Within hours of his inauguration in January, he ordered federal agencies to find ways to waive or defer provisions of the Affordable Care Act that might burden consumers, insurers or health care providers. In May, he directed officials to help employers with religious objections to the federal mandate for insurance coverage of contraception.

Both of those orders were followed up with specific, substantive regulations that rolled back Mr. Obama’s policies.

In battles over the Affordable Care Act this year, Mr. Trump and Senate Republicans said they wanted to give state officials vast new power to regulate insurance because state officials were wiser than federal officials and better understood local needs. But under Thursday’s order, the federal government could pre-empt many state insurance rules, a prospect that alarms state insurance regulators.

The Washington Post editorializes, Trump ramps up the Obamacare sabotage campaign:

PRESIDENT TRUMP on Thursday signed an executive order directing his administration to ramp up its sabotage campaign against the Affordable Care Act, also known as Obamacare, also known as the health-care law without which millions of needy people would lack coverage.

The only good news is that the order merely instructs executive agencies to draw up some new, looser regulations, rather than immediately eroding Obamacare’s protections. The bad news is that those looser regulations may nevertheless come soon, and they could devastate the ACA’s carefully regulated marketplaces. Much depends on how reckless the leaders of agencies such as the Labor Department decide to be.

Obamacare’s underlying logic is that covering people who get sick or are likely to become sick, because of their age or preexisting conditions, requires a big insurance pool with enough healthy people to spread risk evenly. Republicans have argued that this system is unjust to the healthy and young, who pay more into the system than they get out of it, and that they can adjust the system to favor the fortunate without harming the unlucky. They are wrong, as analysis after analysis of their various health-care bills showed. That is one reason GOP lawmakers failed to pass the bills. Not taking the hint, Mr. Trump is now trying to undercut Obamacare’s insurance pool by executive fiat, sidestepping Congress.

The president’s executive order instructs the Labor Department to rewrite rules on health-care plans that small businesses can band together and buy into. Instead of being regulated like other Obamacare insurance plans, these association health-care plans would potentially not have to cover a slate of essential benefits. The plans could be cheaper but also useless for sick people. Also, insurers might be able to charge small employers much more for plans if they have older or sicker employees.

The result is that healthy people would end up covered with cheap and scanty association plans while sick people were left in the normal Obamacare market that guarantees them needed benefits. Premiums for those sick people then would skyrocket. The damage would be profound if the Labor Department concluded that individual insurance customers could buy into plans meant for small associations. Then many healthy individuals would exit Obamacare’s big insurance pool.

The president’s plan to enhance supposedly short-term insurance policies is similarly dangerous. Meant as stopgap insurance for people between jobs, these plans are almost totally unregulated — so they can be cheap, skimpy and fairly useless for sick people — but they can run only for three months. Mr. Trump’s executive order could allow them to run for 364 days in a year, enabling healthy people to use skimpy plans as their primary health-insurance policies. Once again, this would pull healthy people out of the Obamacare pool and into cheap, substandard plans, triggering a disastrous escalation in costs for those left behind in the ACA insurance pool.

Mr. Trump constantly criticizes Obamacare’s rising premiums. If his executive order is fully implemented, those premiums will rise a lot more — especially for some of the Americans who need help the most.

As the Post’s Greg Sargent notes, As Trump implodes, he threatens to hurt millions — out of pure rage and spite. This is a mentally and emotionally unstable man who is unraveling. See, Trump aides scramble to manage the president’s outbursts; “I Hate Everyone in the White House!”: Trump Seethes as Advisers Fear the President Is “Unraveling”. It’s time for Congress to act to stop Trump before he can harm any more Americans out of pure rage and spite.

20 Responses to President Trump sabotages ‘Obamacare,’ will blow up health care markets out of spite

  1. Just posted by Bernie Sanders. Video at link w/BfA’s own Bob Lord:

    Bernie Sanders‏Verified account
    @SenSanders

    Mr. Trump forgot to tell these truckers in Pennsylvania that only the top 0.2% of Americans would benefit by repealing the estate tax.
    4:07
    2:26 PM – 16 Oct 2017

    https://twitter.com/SenSanders/status/920038208943132674

    • Over 1,200 likes and almost 700 retweets in less than 15 minutes. That is so cool.

      Congratulations, Mr. Lord. Tell that truth, brother!

  2. Dan Rather‏Verified account @DanRather Oct 15

    Is it too strong to say Americans have never seen a President intentionally inflict cruelty on his fellow citizens?

  3. Trump’s latest.

    Donald J. Trump‏Verified account @realDonaldTrump 5h5 hours ago

    The Failing @nytimes, in a story by Peter Baker, should have mentioned the rapid terminations by me of TPP & The Paris Accord & the fast….

    Donald J. Trump‏Verified account @realDonaldTrump 5h5 hours ago

    …approvals of The Keystone XL & Dakota Access pipelines. Also, look at the recent EPA cancelations & our great new Supreme Court Justice!

  4. Sen. John Kavanagh

    I am glad that you were able to squeeze into your doom and gloom rant against President Trump the fact that the subsidizes are illegal and have been so ruled by a judge.

    The Affordable Care Act, yours not mine, made the subsidies contingent on congressional appropriation and that has not happened since 2014. Now I can understand a president sometimes continuing to make payments after the appropriations authorization stops for a month or two to allow congress to act but continuing illegal appropriations for YEARS is wrong. (What if President Trump decided to make illegal appropriations to build more wall? I would object, even though I would like to see that because I respect the process and the law.)

    Finally, you neglected to point out that President Trump’s action only stops subsidies to insurance companies and that the CBO stated that the added expenses would be covered by subsidies for individuals who get premium increases. Didn’t you know that?

    This is just like DACA. Many of you believe that it is alright to disobey laws that you don’t like. If everyone felt that way and acted accordingly, we would have chaos.

    • Sen. John Kavanagh

      Quick clarification, individuals would have to be on silver plans and would get some increase, about 20%, which is small compared to what Obamacare has done to premiums overall. But that might be offset somewhat but Trump opening insurance markets across state lines.

      Just wanted to clarify so that commentators don’t focus on my CBA comment and avoid the gist of my post, which is that the subsidies are ILLEGAL. Many on this blog have a taste for “low hanging fruit” at the expense of the major point others make.

      • For Sure Not Tom

        So make them legal, and make sure Americans have affordable health care.

        It’s odd that a lawmaker doesn’t understand that lawmakers make laws.

        Is Trump University part of your CV? We know law school isn’t.

        • Not odd at all. Seems most lawmakers, on both sides of the aisle, only understand doing what their major donors order them to do. And until strict limits on campaign contributions along with a ban on dark money is enacted & enforced, this sad state of affairs will continue.

          And before anyone chimes in on the 1st Amendment, money is not speech. Money is merely the amplifying megaphone. Make the megaphones equal & we just may get higher caliber leaders.

        • Sen. John Kavanagh

          I am glad that you agree that they are illegal and can only be made legal, if they are passed by congress. There is hope for you.
          Hopefully, the president’s action will bring Dems to the table for reform.
          In the spirt of units I will ignore your ad hominem attack.

  5. President Phat Phuc’s latest…

    Donald J. Trump‏Verified account @realDonaldTrump 4h4 hours ago

    Very proud of my Executive Order which will allow greatly expanded access and far lower costs for HealthCare. Millions of people benefit!

    Donald J. Trump‏Verified account @realDonaldTrump 4h4 hours ago

    Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!

    Donald J. Trump‏Verified account @realDonaldTrump 14h14 hours ago

    Such a wonderful statement from the great @LouDobbs. “We take up what may be the most accomplished presidency in modern American history.”

    Donald J. Trump‏Verified account @realDonaldTrump 14h14 hours ago

    ObamaCare is causing such grief and tragedy for so many. It is being dismantled but in the meantime, premiums & deductibles are way up!

    Donald J. Trump‏Verified account @realDonaldTrump 14h14 hours ago

    Money pouring into Insurance Companies profits, under the guise of ObamaCare, is over. They have made a fortune.
    Dems must get smart & deal!

  6. Paul Krugman. Read bottom up.

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    So from now on, until he’s gone, I’m going to fire up my computer every morning in a state of existential dread 7/

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    So we’re getting into the end game. He can’t save his presidency. He can, however, still hurt a lot of people. And he surely wants to 6/

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    The prospect that he will be removed, say by 25th amdt, getting realer by the day. And again, he probably knows this at some level 5/

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    At this point, however, it’s clear to everyone — probably even him — that he just can’t do this president thing, and won’t get better 4/ /

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    Normally, however, one would expect him to pretend to care and maybe even do some good things out of ambition and self-aggrandizement 3/

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    Start with a clear-eyed assessment of Trump’s character: he basically has negative empathy — that is, enjoys seeing others hurt 2/

    Paul Krugman‏Verified account @paulkrugman 21h21 hours ago

    Right now, I’m feeling more terrified than at any point since the 2016 election. Why? It’s time for some game theory! 1/

  7. Kevin Alexander Gray‏ @KevinAGray 30m30 minutes ago

    “Any jackass can kick down a barn, but it takes a good carpenter to build one.” ~ Sam Rayburn

  8. Frances Perkins

    Can you imagine the hysteria if Hillary Clinton was elected and acted exactly the same as Trump does on everything? The impeachment articles would have already been filed. Trump is obviously insane. Incompetence and insanity. Certainly a recipe for Making America Great.

  9. BUSINESS Michael Hiltzik
    Trump plots another backdoor effort to gut Obamacare’s consumer protections

    Selling health insurance across state lines is a favorite GOP ‘reform.’ Here’s why it makes no sense
    Fans of the association initiative assert that it would allow more sales of individual health plans across state lines, a Republican shibboleth that ostensibly would force premiums down by expanding competition. The truth is that this so-called “reform” makes no sense and has never been on the wish list of states, insurers or consumers. The Affordable Care Act, in fact, legalized cross-state insurance sales in states that enacted interstate compacts to allow them. Since the ACA became effective, 14 states have considered those compacts and three — Georgia, Kentucky and Maine — passed laws allowing interstate sales.

    To date, not a single insurance company has taken advantage of this supposed boon. The reason is obvious: Setting up provider networks to serve customers outside one’s home territory is immensely expensive, time-consuming, and a recipe for years of heavy losses. As a team from Georgetown reported in 2012, laws allowing cross-state health insurance sales have no organized champions. Consumers aren’t clamoring for them; insurers aren’t interested in them; doctors and hospitals don’t care; and state regulators aren’t inclined to cede their oversight to interlopers from somewhere else. Their only backers are political ideologues who don’t understand health insurance and hope you don’t, either.

    http://www.latimes.com/business/hiltzik/la-fi-hiltzik-trump-associations-obamacare-20171009-story.html

  10. And after deliberating destroying Obama care Trump and his obsequious Republicans will do their best (worst) to blame Democrats. Because that’s just how they roll. And preaching personal responsibility all the while.

  11. Trump appears to be sinking deeper into insanity.

    Be afraid.

  12. “It is purposeful, malicious and amoral.”

    I hate to say it, but I think you are correct in this instance. I firmly believe that if you can’t get Congress to act on healthcare, then Executive Orders are NOT the way to go to change things. Healthcare is too important and too complex to be handled in such a cavalier fashion.

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