Five Ways Trump Can Cripple Obamacare
Policy + Politics

Five Ways Trump Can Cripple Obamacare

© Nathan Chute / Reuters

The White House and congressional Republican leaders are clearly hesitating to move on matters like tax cuts after failing to repeal and replace the Affordable Care Act. Some want another stab at Obamacare despite the risk of a second failure.  

Since last Friday’s debacle that revealed the deep fissure between the conservative Freedom Caucus and more moderate Republicans, Trump has repeatedly signaled that he might be willing to work with Democrats to get a measure passed. House Speaker Paul Ryan (R-WI) says that would be a terrible idea and that he hasn’t given up on the possibility of reviving the GOP plan if he can somehow unite his fractious party.

Related: Why the GOP Could Flip-Flop on Obamacare and Save the Floundering Program

But as Tom Price, the new Health and Human Services secretary made clear in testimony Wednesday before a House panel, the Trump administration is determined as ever to dismantle key elements of the ACA and push through major changes more in line with the Republicans’ conservative, market-oriented policies.

“So long as the law is on the books, we at the department are obligated to uphold the law,” Price, a former Republican House member, and orthopedic surgeon said during a House appropriations committee hearing.  

However, time and again, he dodged Democrats’ questions about the extent of his commitment to protecting key elements of Obamacare, including subsidies, mandates and other requirements for providing sweeping health care coverage to millions of Americans that are at the heart of the law.

Price said, “We believe that the current law has harmed many individuals,” citing soaring premiums and shrinking choices for consumers. And he repeated a phrase that he and other Republican leaders have used from the beginning of this year’s health care battle: that the GOP is more committed to “making sure the American people have access to affordable coverage” than promising that no one will lose his or her coverage.

Related: What Americans Really Want in Health Care Reform

Price, a leading critic of Obamacare, could undermine or even sabotage a program that has provided coverage to more than 20 million Americans. Here are five of the most effective ways Price and other administration officials could bring Obamacare to its knees.

  • Killing off a $7 billion a year out-of-pocket cost-sharing subsidy. Obamacare helps moderate, and middle-income people pay their deductibles and other out-of-pocket costs through subsidies by taxing high-income earners. The subsidies, considered essential by consumers and insurance companies, are projected to rise to $10 billion next year.

    House Republicans claimed in a lawsuit that the subsidies were unconstitutional because Congress didn’t specifically appropriate the money, and a federal judge ruled in their favor in May 2016. The Obama administration appealed the ruling, but the new Trump administration has been silent until now whether it will continue to challenge the court ruling.

  • Ignoring the individual mandate. Another key component of Obamacare is a mandate requiring everyone without insurance through an employer or other sources to purchase health care coverage through the Affordable Care Act or pay a gradually rising tax penalty. The mandate is essential to pressure younger, healthier Americans to sign up for Obamacare to create a more balanced risk pool of individuals so that insurance companies aren’t overwhelmed by older, sicker Americans who have the greatest health care needs.

    Shortly after taking office in late January, Trump signed an executive order designed to undercut the Affordable Care Act by instructing HHS and other agencies responsible for administering the program to find ways to “minimize the unwarranted economic and regulatory burdens” associated with the ACA. The Internal Revenue Service responded in early February by weakening the health care law’s requirement that individuals either acquire health insurance or pay a tax penalty to the government. If that stands, fewer young adults will feel obligated to sign up for coverage.

Related: Now It’s Democrats’ Turn to Make a Health Care Push: Medicare for All

  • Getting rid of the 10 “essential benefits” in Obamacare. The current law mandates all insurance policies include 10 “essential” services, including pregnancy and maternity benefits, mental health and substance addiction treatment, emergency room coverage, prescription drugs, ambulatory care and other services.

    Trump and congressional Republican leaders argued that getting rid of those requirements was essential to bring down the cost of premiums. Price suggested several times during his congressional testimony Wednesday that he may use his executive authority to redefine minimal health care cover by insurers.

    “This is one of those areas where we think individuals ought to have access to the kind of coverage that they want, not the kind of coverage that the government forces them to buy,” Price said.

  • Curtailing promotion of Obamacare enrollment.  In the final weeks of Obamacare enrollment for 2017, the administration halted several million dollars of paid television and digital advertising and other outreach activities designed to encourage consumers – particularly young people, to sign up for the program.

    HHS retracted the directive in the face of strong protests and complaints by Democrats and other Obamacare advocates. However, an HHS official warned in a statement that, going forward, “We aren’t going to continue spending millions of taxpayers’ dollars promoting a failed government program.”

Related: Controversial Medicare Payment Reforms May Hit a Wall at Trump’s HHS

  • Overhauling Medicaid.  The Republicans, for now, have been thwarted in their efforts to roll back expanded Medicaid for millions of low-income childless adults previously excluded from the program. However, the administration still has the considerable executive power to allow states to revamp their Medicaid programs through a series of waivers to tighten work and eligibility requirements and sharply reduce the availability of coverage.

    Seema Verma, the newly confirmed administrator of HHS’s Centers for Medicare and Medicaid Services (CMS), was a health care consultant who helped Republican-led states including Indiana to pioneer dramatic changes in their Medicaid program.  Those states obtained waivers that allowed them to impose premiums, cost-sharing and even work requirements for able-bodied adults.

    A new waiver system has just taken place in the Trump administration that would allow states to make wholesale changes in their health insurance markets if they can demonstrate that the new approaches would cover as many Medicaid beneficiaries as the current system.