President Trump is pressuring Congress to sink parts of the Affordable Care Act. But now that the first attempt at a GOP health-care overhaul has failed, he must decide whether to throw the law a line.
The White House and Republican lawmakers are facing key decisions that could either improve the insurance marketplaces established by the ACA next year or prompt insurers to further hike rates or withdraw from those marketplaces entirely. Republicans had hoped to protect those with marketplace coverage while lawmakers replaced Obamacare.
But with that effort hitting a wall, Trump and his health-care decision-makers are in a bind: They can either let the current system fail and risk raising the ire of 11 million Americans who use the marketplaces, or help stabilize Obamacare and potentially make it harder for Republicans in Congress to abandon the law itself.
“It’s an awkward political environment, there’s no question about it,” said Lanhee Chen, a health-policy expert and former adviser to 2012 presidential candidate Mitt Romney.
Republican objections to the ACA naturally lead them away from assisting it, but the party now bears some responsibility for what happens to it, Chen added.
“The reality of this is Republicans will face some political repercussions for what happens to Obamacare,” he said.
Trump and other Republicans have long predicted a so-called death spiral for the state-based marketplaces set up under President Obama’s signature domestic achievement. Trump has often tweeted and said on the campaign trail that the law will “die of its own weight.” He shrugged off the recent failure of the GOP health-care bill by saying the law is “exploding” anyway.
“The best thing we can do, politically speaking, is let Obamacare explode,” Trump said in the Oval Office last month. “It’s exploding right now.”
The dire predictions have partially come true: Although some state marketplaces offered multiple plan options and only modest premium raises last year, many others provided only one plan choice and double-digit premium hikes. Next year’s outlook is still unclear, but it’s unlikely the marketplaces will suddenly attract a better mix of healthy enrollees to help lower costs.
If the marketplaces further deteriorate, Republicans may take the fall, surveys show. A recent Kaiser Family Foundation poll found that a majority of Americans will now blame Republicans, not Democrats, for marketplace problems, because the GOP spent the past seven years promising to fix and replace the system.
That reality is forcing Republicans, including Trump, to seriously consider a half-dozen actions that could help improve — or at least sustain — the marketplaces where Americans without employer-sponsored plans buy coverage.
“Looking at next year, if we imagine that the marketplace right now is, say, a C-minus, there are several things that need to be done to just preserve it at its C-minus level,” said Mike Adelberg, who under Obama directed the Center for Consumer Information and Insurance Oversight established at the Department of Health and Human Services.
There is a list of actions the administration must decide whether to take to keep the marketplaces humming, most of them through regulatory actions at the Health and Human Services Department or through the Internal Revenue Service.
The actions center on three programs: cost-sharing reductions, reinsurance and risk corridors. Cost-sharing refers to government subsidies to low-income Americans to help them pay for insurance. Trump threatened recently to let such subsidies lapse, but Democrats say they will shut down the government as part of the spending negotiations next week if the president follows through.
Administration officials and lawmakers are still deciding how to handle the issue. A White House spokesman said only that “no decisions have been made at this time.”
Reinsurance and risk corridors are two programs set up under the ACA to redistribute funds from insurers with healthier enrollees to insurers with sicker, more expensive customers.
The marketplaces could also be hurt or helped depending on whether the IRS enforces the ACA’s individual mandate to buy coverage and whether the administration enforces new, tighter rules around enrollment.