Trump's plan: Let Obamacare explode
  • Wed, 04/19/2017 12:35 AM

As the House Republican leadership pulled the plug on its plan to replace Obamacare, President Trump’s first response was that the best political move might be to just step back and let the law “explode” as is happening now. The coming weeks will reveal the extent of Trump’s willingness to step forward and nudge the law into collapse. Health experts disagree on the fragility of the Affordable Care Act but agree Trump can hasten its demise. Larry Levitt, a senior adviser at the Kaiser Family Foundation said that if the Trump administration creates uncertainty or takes steps to undermine the law, large swaths of the country may have to go without insurance.

Health insurance industry expert Bob Laszewski states that the Republicans “have to decide right now if they’re going to stabilize this market or if they’re going to contribute to it’s blowing up -- because they can do both right now.” Just by deciding to stop cost-sharing reduction payments, the Trump administration can cripple the seven-year-old law. It is this subsidy that made insurance affordable to poorer consumers. Since they are the insurance industry’s bottom line, the federal government paid insurance companies $7 billion last year. Loss of it would raise rates across the board and make insurance unaffordable for many more people. Average premium on a benchmark silver plan would increase 19 percent.

Last week, in an interview to the Wall Street Journal, Trump indicated considering termination of payments. Trump said that without money, Obamacare would die immediately but with money it will die over a period of time. He expressed uncertainty whether lawmakers will appropriate the necessary funds. However, Trump stated of leaving the matter to Congress and deciding to go with their judgment. In 2014, the GOP-led Congress had filed a lawsuit against the Obama administration over the insurer subsidies as unconstitutional because of the House not approving the money. The Judge ruled in their favor but allowed the cost-sharing payments to continue amidst of the Obama administration appealing the decision. Mr. Trump’s administration has not yet indicated how they will proceed. He has saddled the Republicans to decide on the future of cost-sharing payments and precipitate the law’s collapse.

Levit said that the market collapse would leave insurance buyers with no option of getting coverage and no access to the tax credits that help them pay their premium through the Affordable Care Act. Millions would lose insurance and the White House would need to deal with the crisis. Levitt believes the law is fundamentally stable across most of the country with a few exceptions; Tennessee, Georgia, Arizona, North Carolina and Nebraska, where the marketplaces were struggling, it is now exploding on its own. Taking a critical view, he felt the law as successful for those who benefitted from the Medicaid expansion, covering low-income people making up to 150 percent of the poverty line who could have been forced to go without it. The reason for earnings failure was that there weren’t enough eligible people signing up.

He said that Trump can destroy it because it is unstable. If stable, he would not succeed in destroying it between now and the fall when the rates come out since it would be able to withstand anything he could do to it administratively. Now in the near future, insurers would need to decide on their participation in the exchanges but before that, they need to know the administration’s stance to keep the law running smoothly by making the cost-sharing payments, encouraging enrollment, and enforcing the individual mandate that forces people to buy insurance or pay a penalty. Trump does not look inclined to it. Laszewski said that Republicans cannot walk away and let it explode as millions of people will get hurt.


Latest National News

More National News