And They’re Back: The Most Trumpian Possible Sabotage to the ACA
I hope you had a restful weekend to celebrate our incredible victory saving healthcare for millions of Americans — because the game is back on. And this time, it’s Trump who holds the purse strings.
Republicans failed spectacularly to repeal the ACA in the Senate last week (although don’t let your guard down, since they’re already regrouping for another attempt), and now the ball is in the executive branch’s court. Neither Trump, nor Pence, nor Price look fondly upon the ACA, a fact that should concern us all and ensure that we stay focused on shielding the law from their sabotage. That sabotage is far from theoretical. Trump started to undermine the ACA as soon as he entered office, and has a handful of sneaky methods at his disposal to send the markets — and thus our healthcare — reeling all by himself in a terrible “look mom, no hands!” moment of his presidency. As long as Trump continues to declare that he wants to let the markets “implode,” our healthcare is endangered. And he’s reportedly about to try his hand at it this week, according to Kellyanne Conway.
On deck is the fate of cost-sharing reductions (CSRs), payments that are critical to the ACA’s functioning. Bear with me, as it’s essential to understand them, and I promise it’s not as complicated as it sounds. CSRs are reimbursement payments that the ACA mandates to help low-income people afford health insurance. The federal government makes them directly to insurers so that folks who make too little for subsidies alone to provide sufficient financial assistance can still receive the healthcare they need. Insurers put this money out, and then the federal government reimburses them to share the costs (hence cost-sharing reductions) of covering these low-income people who would otherwise fall through the cracks.
That’s not all, though. By helping low-income folks afford health insurance, CSRs keep everyone’s premiums down and stabilize the market. They impact all of us. How do we know this? Well, they’ve been an issue all year, as Trump keeps holding them hostage as a cruel bargaining chip. His playing Russian roulette with CSRs caused insurers to flee the market earlier this year, as well as to jack up premiums by about 20% on average for 2018. So yep, that added expense to your healthcare costs for next year is a completely unnecessary Trump tax caused by his recalcitrance to pay CSRs. Without knowing whether they’ll have this funding, insurers can’t make decisions regarding how to price their plans, compelling them either to leave the market entirely or to raise their prices. And hence we get bare counties and significantly higher healthcare costs. No matter what, insurers have to pay the subsidies, so the question at hand is whether the federal government will pay them back as written in the text of the ACA.
Aside from all of this, refusing to pay CSRs is sheer foolishness. It will actually cost the federal government money. If the Trump administration fails to pay CSRs, they’ll have to pay more in tax credits. Of course, that assumes that we have enough insurers left to provide coverage for people to buy, and that low-income people would be able to afford them, since not everyone will be eligible for those tax credits. That’s where we come in — read on for this below.
But wait, you may be wondering, how is it (other than the fact that he has supreme contempt for the rule of law) that Trump can just decide not to pay CSRs if the ACA says he has to? The answer is two simple words: congressional Republicans. Back in 2014, House Republicans took the Obama administration to court, asserting that the cost-sharing reductions that the ACA requires to help cover low-income people’s healthcare were unconstitutional, since Congress hadn’t formally appropriated the funds — notwithstanding that CSRs are specifically written into the law as connected with tax credits. The Obama administration pursued this lawsuit, then House v Burwell and now House v Price, but the Trump administration has kept us on tenterhooks regarding whether it will keep doing so. Because the question of CSRs remains on hold, Trump could decide to stop paying them at any time, collapsing the healthcare markets as a result. And that’s what he plans to do potentially as soon as Tuesday.
What do we do about all of this? Andy Slavitt, the administrator of the Center for Medicare and Medicaid Services under President Obama, has a top-notch thread breaking it all down. The trick is twofold. One, we need to call and fax our representatives to urge them to pressure Trump to pay CSRs. Insurers are notoriously risk-averse, and the instability that Trump’s cliff-dangling of CSRs causes is among the single greatest threats to the ACA.
But don’t despair even if Trump succeeds in cutting off CSR payments. Number two — and this gets a bit wonky — if the cost of premiums rises because Trump unilaterally ceases to pay CSRs, that means subsidies will rise as well, since under the ACA eligible consumers only pay a certain percentage of their income on healthcare no matter what healthcare costs. That, then, becomes Trump’s own Treasury’s problem, which in turn means that Trump is cutting off his nose to spite his face. And even worse for Trump and the Republicans, this will particularly impact red states. So not only would ending CSR payments backfire stunningly on Trump and the Republicans, in a display of perfect kismet it would be right in line with Trump’s history of failing to pay his bills. We don’t want this to arise as ultimately taxpayers will foot the bill, but the irony that Trump’s effort to decimate the ACA would do more damage to himself and his party is unmatched. For this to work, we need states and insurers to hold steady, so contacting your governor to urge them to reassure insurers wouldn’t be a bad idea.
We’re onto the next phase of battle. Forward march!
