With the collapse (for now) of the Republican effort to repeal the Affordable Care Act, the Trump administration faces a stark choice. Should it do whatever it can to make Obamacare work? Or should it sabotage the law in an effort to force Democrats to the bargaining table?
Make no mistake about it: The choice is in President Trump’s hands. Contrary to Republican talking points, the Affordable Care Act is working. Millions have gained coverage, and the rate of the uninsured is at a historic low.
It’s not perfect. About one-third of states, mainly in the South and the Great Plains, have refused federal money that would allow them to expand Medicaid and cover some of their most vulnerable citizens. The new healthcare exchanges also have struggled in some states. Insurers have been reluctant to participate in sparsely populated, high-cost areas, eroding the market competition that leads to low premiums. And there’s a lot of frustration with excessively high deductibles for exchange plans.
These are fixable problems, though — if Republicans want to fix them. It’s not clear that they do.
This past weekend, Trump threatened again to withhold billions of dollars in cost-sharing reductions from health insurers. That money is supposed to compensate insurers for taking on low-income customers.
But these payments are mired in controversy. House Republicans filed a lawsuit during the Obama presidency arguing that Congress never appropriated the necessary money. A federal judge agreed and ruled that the payments had to stop.
Trump is betting that the public will blame Democrats if the insurance markets implode. Polling data suggests he’s wrong about that.
For now, the judge’s decision has been put on hold to allow for an appeal. If he wanted to, however, Trump could drop the appeal with little more than a stroke of a pen, in which case the ruling would go into effect and the payments would have to end immediately.
That move would throw the exchanges into chaos. Insurers that counted on federal money could go bankrupt, leaving their enrollees without coverage. Many of those that weathered the immediate storm would eventually leave the exchanges anyway: How could they afford to do business with a faithless federal partner? Those that remained would have to hike their premiums to make up for the lost federal money.
Trump could throw other wrenches into the works, as well. He could announce, for example, that he won’t enforce the individual mandate, which would encourage healthy people to wait until they get sick to buy health insurance — and drive up premiums by as much as 20%. And he could make it easier for states to apply for waivers that exempt them from certain Obamacare rules.
Some parts of the health reform law are more protected. Although Medicaid depends on federal financing, the states are in charge of administering their own Medicaid programs. That partly insulates them from federal tampering. Although the Trump administration could allow states to place more onerous conditions on Medicaid eligibility, like work requirements for non-disabled adults, Medicaid as a whole is relatively safe.
The private insurance market is much more vulnerable. And the biggest problem may not be what the Trump administration does. It may be what it doesn’t do. The exchanges depend on complicated information technology, and maintaining them requires competent day-to-day management. What if Trump doesn’t bother?
The problem is most acute for the 38 states that rely on HealthCare.gov, the federally administered exchange. But it’s also a concern for the states, including California, that run their own exchanges. To calculate a customer’s subsidized premiums, for example, the state exchanges need to know that customer’s income — which requires rapid communication with databases at the Internal Revenue Service. If that communication channel goes down and no one repairs it, the state exchanges can’t work.
For Obamacare to falter, in other words, Trump doesn’t need to burn down the exchanges. He just needs to let their gears turn to rust.
This sort of malign neglect would violate the president’s constitutional duty to “take Care that the Laws be faithfully executed.” But don’t expect the courts to save the day. Courts are pretty good at stopping presidents from doing unlawful things, but they can’t thwart a campaign of mismanagement.
For that, the public has to step up. Trump is betting that the public will blame Democrats if the insurance markets implode. Polling data suggests he’s wrong about that, and for good reason. Trump has openly threatened to cause the collapse of the insurance markets. Who do you think voters will blame if they do, in fact, collapse?
The failure of the Republicans’ repeal efforts has given Trump an opportunity to display leadership. Transcending partisanship, he could put the Affordable Care Act on a sound footing while working with Congress to fix its genuine problems. Doing so would be good for Trump, good for the country and good for the millions of people who could sleep at night without wondering how they’ll pay their medical bills.
Or, like a toddler with a precarious pile of blocks, Trump could bring the whole thing crashing down.
Nicholas Bagley is a professor of law at the University of Michigan.