Trump can wound Obamacare without the help of Congress

When the president says Obamacare will “explode,” that may be more of a threat than a prediction.

President Donald Trump and Health and Human Services Secretary Tom Price arrive on Capitol Hill in Washington, Tuesday, March 21, 2017, to rally support for the Republican health care overhaul. CREDIT: AP/ J. Scott Applewhite
President Donald Trump and Health and Human Services Secretary Tom Price arrive on Capitol Hill in Washington, Tuesday, March 21, 2017, to rally support for the Republican health care overhaul. CREDIT: AP/ J. Scott Applewhite

When President Donald Trump and House Speaker Paul Ryan (R-WI) yanked their Affordable Care Act (ACA) repeal-and-replace bill minutes before a Friday floor vote, they removed the most immediate threat to former President Barack Obama’s health care reform law. And although the canceled vote is undoubtedly a setback for Trump’s campaign to undermine Obamacare, it isn’t the end of the fight.

After President Trump and Speaker Ryan agreed to pull their plan, they both gave statements indicating they still expect Obamacare to ultimately fail.

“I’ve been saying for a year and a half that the best thing we can do, politically speaking, is to let Obamacare explode,” said Trump on Friday. “It is exploding right now. Many states have big problems. Almost all states have big problems.”

During a Friday press conference, a reporter asked Ryan whether Republicans were interested in “propping up” the ACA, since it is the law and Americans depend on its effectiveness. Ryan responded, “It’s so fundamentally flawed, I don’t know that that is possible.”

Later in the press conference, he added, “Nevertheless, I think there are some things that the secretary of [Health and Human Services] can do to try and sort of stabilize things, but really we need [Trumpcare] to make it better.”

But HHS’s actions so far have done the opposite of stabilizing the markets. And if the Trump administration makes dismantling Obamacare a priority, there’s a lot they can do without congressional approval.

How the administration has already undermined Obamacare

On his first day as president, Trump issued an executive order directing agencies to delay implementation of provisions that “impose a fiscal burden on any State, or a cost, fee, tax penalty, or regulatory burden.”

A few days later, the administration decided to stop running ads for the final week of open enrollment in Obamacare marketplace plans. Final 2017 enrollment was down 4 percent from the previous year, even though it had been running ahead of 2016 enrollment totals through mid-January.

Then, in February, the IRS announced new rules that would take away a crucial tool for enforcing the individual mandate requiring people to obtain health insurance.

The IRS said it would stop its plans to reject tax returns if people did not say whether they had coverage. Then the U.S. Department of Health and Human Services announced it would allow insurers to offer less generous plans and allow fewer people to sign up for the ACA’s “special enrollment period.”

Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, said it is in the best interest of the administration to own and improve the ACA, since a Republican replacement plan is off the table.

“There is renewed attention to how the new administration plays a role and to the changes they’ve already made or are pursuing,” Park said. “The administration could take steps to improve enrollment. They will be held responsible if they don’t take those steps.”

How the administration could further sabotage Obamacare

There are a number of things the administration could do to weaken the Affordable Care Act. One would be to dramatically expand the definition of “hardship” — a condition that exempts people from the individual mandate — which would depress enrollment, Park said.

The administration could also unilaterally eliminate cost-sharing reduction subsidies, which bring down the amount that low- and modest-income people on marketplace plans have to pay for their health care costs. Two years ago, House Republicans brought a lawsuit against the Obama administration arguing that these subsidies were illegal because Congress had not designated appropriations for them.

Although a federal district judge ruled that the administration did need appropriations from Congress, the subsidies were kept in place while the court waited for an appeal. The Trump administration could decide to drop the appeal, and thus end the payments.

The administration could also drop the Obama administration’s legal defense of an ACA rule mandating contraception coverage. The U.S. Department of Justice recently requested to wait until May 1 to file another status report in ongoing litigation.

HHS Secretary Tom Price, who was one of the chief opponents of the ACA when he served in Congress, is on record against both the birth control rule and the cost-sharing subsidies.

Price and Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, have also signaled that they would like to impose work requirements on low-income Americans who benefit from the Medicaid expansion, Politico reported. They could rewrite rules and allow states to exercise this option.

In addition to the rewriting of administrative rules, the effectiveness of the ACA depends in part on the Trump administration budget. Although the administration hasn’t released detailed information, its proposed HHS cuts would reduce the department’s total budget by 17.9 percent.

“If they have to administer [the ACA], does that leave them with money for outreach? When you already see the ACA administration underfunded, that could have a direct affect on enrollment going into 2018,” Park said.

The IRS is also facing a 14 percent cut to its already meager budget, which could also affect ACA enrollment, since the IRS is supposed to enforce the individual mandate.

“IRS funding is being cut on top of years of underfunding. How does it affect their ability to administer the ACA? It could depress enrollment,” said Park.

How the Trump administration could protect Obamacare

If the Trump administration decided it wanted to ensure the marketplaces run more smoothly, it would have to communicate to issuers that it would administer the ACA appropriately, said Karen Pollitz, senior fellow at the Kaiser Family Foundation.

“General reassurances to all issuers that the plan going forward is to implement and administer this program effectively and in good faith would probably go a long way,” Pollitz said. “The issuers’ biggest fear is uncertainty and not knowing what’s going to happen to enrollment or rules.”

Since ending cost-sharing subsidies could “shut down the marketplaces,” the Trump administration should also communicate that it will appeal challenges to the subsidies, she said.

One of the Obama administration’s challenges was trying to ensure that at least one insurer would sell coverage in what were called “empty shelf” counties. But the administration did work very hard to convince issuers to enter these less desirable marketplaces, which are mostly in rural areas. The question now is whether the Trump administration will do the same, Pollitz said.

“The issuers’ biggest fear is uncertainty.”

“For the last few years, the Obama administration worked pretty hands-on with issuers to try to negotiate with them and see what they needed to come back into the marketplace, to shore up marketplaces that were fragile. That would certainly help,” Pollitz said. “There is an opportunity to say to the governors and insurance regulators and others, ‘What can we do to shore up your state and what other rules could we put out to encourage insurers to participate and keep their rates stable?’”

If the Trump administration committed to outreach and advertising to ensure that people signed up during open enrollment, that would also help, Pollitz said. Before the election, insurers hoped that 2017 would be the year the markets stabilized. Now it may take much longer.

“We’re waiting for ‘What does normal feel like?’ So I don’t know if that has now been put off another year or two, or if this is the year that it happens,” Pollitz said. “Uncertainty is the enemy of this program, and for insurers, it’s hard to price policies and figure out enrollment strategy and market share if big questions continue.”