healthcare

Administration Doing Its Damnedest to Destroy It, But Obamacare’s Tough to Bring Down

Jul 9 2018

Two attempts by Congress to repeal the Affordable Care Act (ACA) failed last year, but you wouldn't know that from Donald Trump.

"Essentially we are getting rid of Obamacare. Some people would say, essentially, we have gotten rid of it".

He is under the impression that the Trump administration's striving for effective repeal by other means is already a success. But the law has proven surprisingly resilient, especially when you consider that it is now being administered by a regime that wants it to fail.

On his first full day in office, Trump issued an executive order telling agencies to be lax on enforcing provisions of the ACA, to “waive, defer, grant exemptions from or delay”. The broad hint was that the administration would not enforce penalties for individuals and companies who chose not to buy insurance for themselves and employees. That was only the beginning. The Trump administration embarked on multiple tactics to "sabotage" — as the media quickly labeled them — to bring down Obamacare as a major component of Trump's crusade to reverse everything Barack Obama had ever accomplished:

 To shrink enrollment, the Trump administration cut by 90% the spending on outreach campaigns that alert people to the annual open-enrollment period.
 The administration cut the enrollment period from 90 to 45 days — same objective.
 Under since-deposed Tom Price, the Health and Human Services (HHS) Department produced 23 ads for YouTube about people who said they'd been "burdened by Obamacare", paid for, it is suspected, from the budget that was supposed to promote the Affordable Care Act.
 The department removed from its website useful guidance for consumers.
 From the start, teams of "navigators" were deployed around the country to explain the ACA's insurance plans to people and help them find their way to the online offerings that fit their need, but the Trump administration cut the navigator budget 41%.
 The president halted payment of the subsidy paid to insurers to cover their cost of reducing premiums for low income people. The subsidies are stipulated by the ACA, but Congress played its part in sabotaging Obamacare by never funding them.

sticktoitiveness

But people with no employer-paid insurance are glad for the ability to buy health coverage as individuals and enrollment has dipped only modestly

— only 4% this year despite these assaults. They account for just under half of the 19.3 million Americans who now are insured under the ACA either by Medicaid or insurance bought in the Act's online marketplaces. This has served to reduce the percentage of uninsured to 11.3% of the world's only large country that lacks universal healthcare coverage.

After years of rate increases — average premiums doubled between 2013 and 2017, according to HHS — premiums have caught up to costs. In a reversal from the moment two years ago when there were patches of the country with no insurance offerings at all, a number of insurers are either returning to the ACA marketplace or trying it out for the first time. And Virginia just became the 33rd state to opt for expanded Medicaid whereby the government covers costs of new enrollees for the first two years and 90% thereafter — for as long as the Affordable Care Act has not been repealed, that is. Republicans want to eliminate Medicaid by giving the states block grants to spend as they choose.

Polls say that health concerns are steadily among the top issues for voters going into the 2018 midterms. One need only think back to the intense backlash that greeted Republican Congress members last year when they made the mistake of holding town hall meetings in their home districts in the midst of the attempts to repeal the ACA. Republicans were stunningly unprepared; they had no idea how to replace Obamacare. In their years of acrimony and outrage, they had forgotten to think through the interlocking structure of the Affordable Care Act only to discover that they couldn't just cut off legs of the stool and expect it to stand.

But the administration's attacks go on. With the blessings of the Trump government, states intend to attach to Medicaid a requirement that an applicant either have a job or is looking for one. There is no rationale that healthcare should be denied with work as the criterion; the bald face intent is to sharply expel people from the Medicaid rolls, partly to cut costs, partly out of ideology. A federal judge has just overturned Kentucky's work requirement, scheduled to begin July 1, saying that it runs counter to Medicaid's objective of providing healthcare to the country's most vulnerable citizens. That should crimp for a time the plans of 10 other states that have applied to follow Kentucky's initiative.

The 2017 Tax Cuts and Jobs Act eliminated the penalty for not buying insurance. When that takes effect in 2019, several million could drop their insurance, leaving behind the less healthy and more costly for insurers to cover, causing still more rate hikes feeding the deliberate Republican campaign to induce the "death spiral" that will send Obamacare down a black hole.

But the IRS has continued to pursue those not in compliance. Penalty notices were sent to 30,000 companies in May and they appear so far to be only for 2015 violations. The Congressional Budget Office projects $12 billion in fine collections for 2018.

killing it in the courts

Based on the elimination of the mandate, 20 states have sued the government contending that the Affordable Care Act is unconstitutional. And now, in June, the Justice Department has filed a brief joining the states, meaning it will no longer perform its obligation to defend the law. The department is going further, unconscionably arguing for the repeal of Obamacare's protections of individuals from predatory insurers. After the election, Donald Trump said to "60 Minutes" that the rule forbidding insurers from turning away those with pre-existing conditions was one of the ACA's "strongest assets". Now, his Justice Department's lawsuit asks that the provision be done away with, as well as allow for freedom to charge people with pre-conditions more, and to relax limits on how much older people and women can be charged.

Attorney General Jeff Sessions said he could not find any "reasonable arguments" that the protections are constitutional. By his department abandoning defense of the law to counter the states' suit, he has decided what the law is in advance of what a court might or might not decide. Sessions' contravention of the rule of law was so opprobrious — brushing aside major legislation passed by a separate branch of government — that three career department lawyers withdrew from the lawsuit, a virtually unheard of protest. Donald Verrilli, a solicitor general in the Obama administration, called it "a sad moment".

These protections — prohibition to turn away those with pre-existing conditions, or charge them more, or impose lifetime caps — are far and away the most popular provisions of Obamacare. Some 52 million Americans now enjoy the comfort of guaranteed access to such coverage, says a report of the Kaiser Family Foundation. Their 2016 poll found that 75% of Democrats and 63% of Republicans want these rules to be left untouched. (Isn't it remarkable that it's not 100% for both? It's a safe bet that the negatives are from those covered by employer-paid plans or Medicare — those who pay little or nothing and would like to tell you about some lofty principle of self-reliance they believe in, except when it comes to themselves.)

Eliminating the penalty for not buying health insurance, a penalty that Justice Roberts allowed to go forward in 2012's challenge to Obamacare by calling it a tax and therefore permissible under the Constitution, gave the 20 states their premise for attacking the ACA on constitutional grounds. They argue that if calling it a tax made the federal mandate permissible under the Constitution, its removal makes the mandate to buy insurance somehow a violation of the commerce clause, even though Congress has the right "To regulate Commerce…among the several States", and even though all that remains in the statute is the empty mandate that we must buy insurance but with no penalty for not doing so.

freedom of association

Also in June, the Trump administration issued a new regulation that permits small businesses to band together into associations to develop health insurance plans of their own. The rule does not allow the groups to deny coverage to employees with pre-existing conditions nor can they charge them more, but it tosses aside Obamacare's mandated list of "essential health benefits" that plans must cover. The associations will be free to drop coverage for mental health care or emergency services or maternity care or drugs, for example. And, unlike ACA's minimum requirements, each association's plan and its cost can freely differ from all others.

This opens the door to "junk health insurance", said Senate Democratic leader Chuck Schumer of New York. Critics foresee that it could create an uncontrollable number of groups and insurers bidding for their business, an invitation to fraud beyond the ability of state regulators to cope. But the ACA plan for smaller employers was unworkable, with its hard threshold requiring businesses with 50 employees or more to pay for their insurance costing some $19,000 today for a family that caused employers not to hire past 50 people or to shift personnel to part time. There was a total failure of foresight in its design (as we said here four years ago).

year of living dangerously

For individuals the Trump administration plans to extend access to "short-term, limited duration" insurance from the three-months now allowed to a full year. The president wants HHS to expand the program by making this insurance option vastly more affordable. But if costs are greatly reduced, so will be what the plans cover. An op-ed by the health studies branch of the Cato Institute urges HHS chief Alex Azar to go for broke, envisaging plans that cost 90% less than Obamacare's. At that price, what possibly could such plans cover?

The dilemma of low cost plans with few benefits is that the public is largely unaware of the deception. They feel secure for having insurance and only discover how much the cheap plans truly cost them when a health event strikes. Only by slow-moving word of mouth do those who have had no need to put their insurance to the test learn of what might await them, if they learn of it at all, with the result that misguided faith in inadequate protection lives on.

also to blame

Obama and his administration made their own hefty contributions to weaken a program that might better have withstood these attacks. The launch was a famous mess, with a president who hadn't even tried out the system to see if it was humanly navigable or could handle stress. Slews of waivers were given seemingly to all who asked to be exempted from having to buy insurance for their employees, and the startup for that requirement was pushed two years down the calendar. Penalties for individuals who chose not to buy insurance began at a ludicrously low price tag, causing enrollment in the marketplace plans to suffer. And perhaps most of all, the mandated list of "essential health benefits" was too rich, causing premiums too few could afford even with subsidies. Obama's "signature accomplishment" started with a bang, but not for the buck, and thus the risk that it could end with a whimper.

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