After the failure of the American Health Care Act (AHCA), President Donald Trump was quick to insist that Obamacare would die on its own, and that in the wake of that death, a new deal would be made.
To be clear, Obamacare won’t die, because it’s a big law that involves several different components. There are parts of the law that will continue to be law even if other parts fail. Obamacare, also known as the Affordable Care Act (ACA), can be summed up in five pieces:
First, there are the marketplace exchanges it created. These marketplaces were set up in hopes of generating competition, and they rely upon insurers agreeing to sell in them.
Second, there are the subsidies for people and families making between 100% and 400% of the poverty line. The money people received is based upon income and the price of plans where they live.
Third, there are the regulations on insurance companies. This includes most of the most popular parts of the bill. This includes the ban on denying people based on pre-existing conditions, allowing children to stay on their parents’ plans until they are 26, and the requirement that insurance plans include “essential benefits” (such as maternity care, birth control, mental health care, etc.).
Fourth, the ACA includes an individual mandate requiring that everyone buy health insurance or pay a fee on their taxes. This is the least popular part of the law, but it is arguably the most important. The law does not work without it.
Finally, Obamacare offered a Medicaid expansion to the states that would allow people making up to 137% of the poverty line to enroll in the program. So far, 32 states (including the District of Columbia) have opted into the program. 19 states (all controlled either by Republican governors, legislatures, or both) have refused the expansion, despite the fact that the vast majority of the cost is borne by the federal government.
The Trump administration does not have the power to tear the law up on its own, but it can seriously damage parts of the law. When Republican politicians refer to the Obamacare “death spiral,” they are referring to the first part (the exchanges). There are places in the country (mostly rural, mostly Republican leaning) where very few insurers are selling. If more insurers leave the individual market, then that could lead to certain counties not having access to insurance. The Obama administration dealt with this problem by both trying to get more healthy people to sign up for insurance (making staying in the marketplaces more lucrative for insurers), and by trying to convince insurers to go to places where there was little competition.
Trump probably could not make the law “explode” if he simply did nothing. The CBO, in its analysis of the doomed AHCA, determined that the marketplaces were probably stable. So, the Trump administration would have to actively try if it wants the law to collapse.
To be clear, they have the leverage to do this. They could refuse to do outreach to insurers to convince them to stay in the marketplaces, they could refuse to do any kind of advertisement aimed at healthy people during enrollment periods, and they could refuse to enforce the individual mandate (this last part might not pass legal muster, but they could certainly try). All of those things would make the law less likely to be viable as more than an optional Medicaid expansion with some insurance regulations thrown in.
There is something else, though, that they could do that is being mulled over publicly. There is currently a lawsuit pending over the law’s cost-sharing subsidies (essentially, the government pays insurance companies to offer plans with lower deductibles and lower co-pays to people making up to 250% of the poverty line). Without the cost-sharing subsidies, insurance could become unaffordable or useless to millions of people. It could also cause more insurers to pull out, exacerbating the problems with the individual market.
Republicans sued over the cost-sharing provision, and the Obama administration had been defending them in courts. Trump could simply decide to stop defending them. This is what he was referring to in a recent interview with the Wall Street Journal. Trump said, “Obamacare is dead next month if they don’t get that money…I don’t want people to get hurt…What I think should happen and what will happen is the Democrats will start calling me and negotiating.”
Trump believes that if the markets collapse, the public will blame Democrats, making them more likely to take a deal on his terms. This is, to put it mildly, a foolish notion. If the markets fail, they will have done so because the president decided to cause them to fail. If insurance becomes unaffordable to millions, it will be because the president decided to make that the case. The ACA was designed to work. It needs fixing, but even without fixing, it should continue to work. If it breaks because the president made a decision not to implement it properly, it’s the president’s fault.
Trump is gambling that voters will blame someone else for an outcome he personally engineered. Maybe it will work. Who knows? Beyond political considerations, though, there is a serious moral issue. If Trump does his best to make the marketplaces fail, he will be doing so at the expense of millions of poor Americans. When a 60 year-old making $30,000 in rural Arizona cannot get health insurance, it will be because the president determined that he personally would be best served if more people could not get health insurance.
This is the kind of man we elected. He sees personal political advantage in making people suffer willfully. He does not think he bears the responsibility for that outcome, even if it is the clear result of his own choices. He does not acknowledge a contradiction in the oath he took – to uphold and enforce the laws of the land – and the action he’s proposing to undermine one of the laws of the land. He is, in a word, a thug.