Trump’s Latest Attempt At O’Care Repeal Hardball Holds The Individual Market Hostage

President Donald Trump announces the approval of a permit Friday to build the Keystone XL pipeline, clearing the way for the $8 billion project, in the Oval Office of the White House, Friday, March 24, 2017, in Washington. (AP Photo/Evan Vucci)
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After President Trump’s Twitter diplomacy failed to pressure hardliners in to supporting the GOP Obamacare repeal bill and a last-minute pitch by Trump’s top deputies to revive the legislation before recess appeared to have lost more votes than it gained, the real estate mogul who played a tough-talking deal-maker on TV is taking his flair for the negotiation dramatics to the next level: Trump is threatening to torpedo the entire individual health insurance market if Democrats won’t go along with his plan.

The tactic would be laughable if millions of Americans’ health insurance wasn’t at stake.

GOP leadership appears to be no closer to coming up with a compromise to salvage their repeal legislation. The latest long-shot idea creates all the same problems that sank the previous compromises that tried bridge the gap between House GOP conservatives and centrists. Trump is now attempting to turn the heat up on Democrats, who have made clear that they won’t help with any health care reform that begins with Obamacare repeal. Never mind that Hill Republicans made clear they didn’t want Democratic help by opting to use the reconciliation process and to make repeal their baseline.

Trump’s self-proclaimed bargaining chips are insurer subsidies known as cost sharing reduction payments, which House Republicans targeted in a 2014 lawsuit against the the then-Obama administration. If the CSR payments are ended – whether by a decision made in a courtroom or voluntarily by the White House – insurers would hike premiums by an estimated 19 percent, or just leave the individual market entirely. Seven million people currently benefit from the subsidies, according to the insurer trade group America’s Health Insurance Plans.

Trump has been explicit that this sort of chaos is the goal of using the subsidies as leverage. In the past, Republicans at least billed their efforts to sabotage Obamacare as being about something else: ending “insurer bailouts,” restoring religious liberty, upholding state sovereignty, etc.

How Trump’s current negotiation scenario is supposed to play out is unclear and appears to be disconnected from the basic fundamentals of health care politics and policies.

For one, key congressional Republicans, including Energy and Commerce Chair Greg Walden (R-OR) and the House appropriator who oversees the the Department of Health and Human Services, Rep. Tom Cole (R-OK), have said they would like to see the subsidies funded in one way, shape or form.

Polling by the Kaiser Family Foundation also suggests that at this point Trump would be blamed for an implosion of the Affordable Care Act exchanges. Trump himself seemed to acknowledge this reality in partially walking back the threat in the same Wall Street Journal interview where he declared his desire to use the subsidies as a bargaining chip.

“That’s part of the reason that I may go the other way” on the insurance subsidies, he said. “The longer I’m behind this desk and you have Obamacare, the more I would own it.”

Finally, the tactic appears to be alienating not only the health care industry,  which for months has publicly aired its concerns about that the future of the subsidies, but a traditional ally of the Republican Party, the Chamber of Commerce.

The Chamber, along with seven other health care and business groups, said in no uncertain terms that the payments should be preserved. When you’ve lost the Chamber of Commerce in your quest to repeal Obamacare, what do you have left?

And yet, Trump’s clumsy attempts to wave the payments like some magical trump card have continued.

While the legal case over subsidies was delayed through May, the administration has remained coy about the fate of the subsidies long-term, but was at least was willing to say the subsidies would continue through that phase of the litigation.

A New York Times story highlighting that decision reportedly upset Trump so much – as he, according to Politico, thought it undermined his bargaining position – that he called Health and Human Services Secretary Tom Price directly and dictated a confusing statement that sought to rebuke the Times story, though none of its facts were actually called into question.

Instead, Trump’s statement – which was attributed to a HHS spokeswoman when it went out to health care reporters Wednesday – took pot shots at Democrats, who “need to help solve this failed Obamacare plan.”


Against this backdrop, congressional Republicans don’t seem to be getting any closer to reviving the bill they were forced to withdraw from the House floor last month.

Axios reported Wednesday that the White House was floating another Hail Mary compromise to bring together the two House GOP factions dueling over repeal that would allow non-ACA compliant plans to compete on ACA exchanges. That idea brings all the same problems as the previous failed agreements: It would invite a race to the bottom by insurers that would price sick people out of the market and possibly lead to a death spiral.

An unnamed health insurance official summed up the frustrations of many health care wonks in a follow-up Axios report about the idea: “Do Republicans seriously not understand how insurance markets work?”

Prominent congressional Republicans have signaled they want to move on from this mess, and drill down on tax reform, which poses its own set of challenges.

Walden, the Energy and Commerce Committee chair who oversees health care reform, speculated that Republicans could hold off for a future budget vehicle to try Obamacare repeal again, telling the Washington Post Wednesday that he’d “rather take the time to get it right.”

Trump, in his Wall Street Journal interview, hinted that he is ready to hold Republicans in a separate vice, of similarly questionable construction, by vowing to withhold releasing the White House’s tax reform plan until a health care bill is passed.

To recap: Trump, in his kamikaze-style of political hard ball, is currently a man on an island. He stands alone – apart from congressional Republicans, the health care industry and even the Chamber of Commerce – in holding a gun to the head of a subsidies program that benefits 7 million people.

And in stating those intentions explicitly, Trump made it hard to blame anyone else for pulling the trigger.

ABOUT THE AUTHOR

Tierney Sneed is a reporter for Talking Points Memo. She previously worked for U.S. News and World Report. She grew up in Florida and attended Georgetown University.
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