Just two weeks after the Senate once again tried — and failed — to repeal and replace the Affordable Care Act, it’s become eminently clear that those failures don’t matter. Trumpcare has arrived.
On Thursday morning, President Trump signed an executive order that will allow people to buy stripped down health insurance plans if they’re unsatisfied with options offered on the Obamacare exchanges, and hours later the White House confirmed Trump will stop making critical subsidy payments to insurers.
“Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people,” White House Press Secretary Sarah Huckubee Sanders said in the release.
But the White House’s moves Thursday so drastically alter the Affordable Care Act that repeal is hardly necessary.
Thursday’s executive order allows insurers to offer plans that don’t cover everything required under the Affordable Care Act, allowing individuals who feel they don’t need robust coverage to purchase cheaper plans that offer fewer benefits.
But offering the skinnier plans means that the risk pools for plans that do provide the most robust coverage guaranteed by Obamacare are going to be sicker and older. Without healthier, younger people, premiums will rise, and the people most in need of care will be strapped with high costs or unable to access care at all.
“I just keep hearing repeal-replace, repeal-replace,” Trump said at Thursday’s ceremony. “Well, we’re starting that process.”
Later Thursday night, that process continued.
“The Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies lawfully under Obamacare,” Sanders’ statement said. “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system.”
The cost-sharing reduction payments (CSRs) are the subject of a lawsuit filed by House Republicans during the Obama administration, which House Republicans won. The Obama administration then appealed, and the payments, worth an estimated $7 billion per year, have continued.
Trump has toyed with the idea of dropping the appeal and ending the CSRs in the past.
“[T]here is no Obamacare, it’s dead,” he said in an interview with The Economist in May. “Plus we’re subsidizing it and we don’t have to subsidize it. You know if I ever stop wanting to pay the subsidies, which I will… Anytime I want.”
In August, the nonpartisan Congressional Budget Office projected the fallout from ending the CSR payments, and found that pulling the CSRs would have an almost immediate effect; by 2018, the CBO estimates premiums will be 20 percent higher without the CSR payments, and 25 percent higher by 2020.
Additionally, officials estimate that the move will cause more insurers to pull out of the Obamacare markets, increasing the number of people who rely on the marketplaces to purchase coverage with few or no insurance options.
The CBO also estimates that ending the CSRs will actually increase the federal deficit by $6 billion in 2018, $21 billion in 2020, and $26 billion by 2026.
Thursday’s executive order and CSR announcement are both major moves to undercut Obamacare, but the administration has been undermining the law in other more subtle ways, too, including weakening enforcement of the individual mandate and shutting down the ACA website for 12 hours almost every Sunday during the open enrollment period.
Additionally, in August, the administration slashed funding for enrollment advertising by 90 percent, from $100 million to $10 million, and cut nearly $30 million in funding from nonprofit groups that help people enroll in Obamacare.