As Republicans remain divided over House Republicans’ plan to replace the Affordable Care Act, President Donald Trump presented the option of simply letting Obamacare “fail on its own,” so Democrats can take the blame.
But his administration could do far more than let Obamacare fail. Trump has broad latitude to sabotage implementation of the law if he doesn’t get his way on the current attempt to repeal it.
In a private Oval Office meeting with conservative groups, such as the Heritage Foundation, Club for Growth, Tea Party Patriots, and Americans for Prosperity, Trump reportedly suggested that Republicans could try to pass a health care bill again in two years, Politico reported. Without an Obamacare replacement plan, the president was reportedly confident that the American health care system would deteriorate in the meantime.
This is similar to previous remarks President Trump made in a speech at CPAC in February and in a few of his tweets in January. At CPAC, Trump said he told House Speaker Paul Ryan and Health and Human Services Secretary Tom Price “the single best thing we can do is nothing.”
“Let it implode completely — it’s already imploding. You see the carriers are all leaving,” he added. “I mean, it’s a disaster. But two years don’t do anything. The Democrats will come to us and beg for help. They’ll beg, and it’s their problem. But it’s not the right thing to do for the American people. It’s not the right thing to do.”
Republicans must be careful in that the Dems own the failed ObamaCare disaster, with its poor coverage and massive premium increases……
— Donald J. Trump (@realDonaldTrump) January 4, 2017
But what did the president mean by letting Obamacare fail on its own? Health care experts say that his comment may allude to conservatives’ belief that the market will become too expensive on its own — and the fact that the White House is already taking actions to undermine the individual mandate.
Without the mandate, there would be an imbalance between sicker and healthier people, causing premiums to climb. Healthier people would drop out as a result, and that would drive up premiums further. This process is known as the “death spiral.”
One of the first actions the Trump administration took to foster uncertainty about Obamacare was issuing an executive order that directed federal agencies to delay implementation of any provisions that “impose a fiscal burden on any State, or a cost, fee, tax penalty, or regulatory burden.” It also told agencies to encourage development of a “free and open market” in health care services in the states.
The Affordable Care Act was running ahead of 2016 enrollment totals through mid-January, according to the CBPP, but final 2017 enrollment fell by 4 percent. On January 26, the administration said it would stop running ads for the final week of open enrollment.
In February, the Trump administration proposed rules that discouraged enrollment and took away an IRS tool for enforcing the individual mandate. Even though the mandate still exists, the IRS announced that it would stop its plans to reject tax returns if people did not say whether they had coverage. Edwin Park, vice president for health policy at the Center for Budget and Policy Priorities, told ThinkProgress that tax preparation companies are already preparing software that acknowledges these new rules by not asking people to answer yes or no on whether they have coverage.
“If they don’t have to pick, they aren’t subject to the mandate, and that discourages them from enrolling,” Park said.
A few days after the confirmation of Health and Human Services Secretary Tom Price, the U.S. Department of Health and Human Services proposed rules it claimed would lead to “market stabilization,” but would in fact do the opposite. The rules would give insurers more power to offer less generous plans and allow fewer people to sign up for the ACA’s “special enrollment period.” The rules would also shorten the sign-up period from three months to 45 days.
“All the actions the House is taking are going to end up resulting in a death spiral.”
“In regard to the individual mandate, is the administration going to enforce the mandate? There are a number of specific exemptions for the individual mandate. There is an exemption that it is up to [the secretary of Health and Human Services] to define hardship,” Parks said. “They could dramatically expand what hardship means so fewer people would be subject to the mandate, and then fewer people participate. It’s a self-fulfilling prophecy.”
Although Republicans argue that Obamacare is already in a death spiral, the Republican plan will certainly result in one, Park said.
“There is this rhetoric from Ryan where he says the market is in a death spiral, but all the actions the House is taking are going to end up resulting in a death spiral,” he said.