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Here’s How President Trump Could Still Kill Obamacare

Mar 29, 2017

Just because President Trump and the GOP couldn’t directly kill Obamacare last week doesn’t mean they can’t still try to wreck it indirectly.

One option is for Republicans to choke off subsidies given to insurance companies in exchange for limiting the costs of deductibles and copays for low-income recipients. If that happens, many providers would likely withdraw from the marketplace. And with fewer insurance companies participating, not only would coverage options for enrollees decrease, but premiums would also rise due to a lack price of competition. As it is, the subsidies will be paid by the government for the rest of the year, but the status for such funding in 2018 and beyond is up in the air now that the Trumpcare bill is dead.

The subsidies, which provide help to more than half of all enrollees on Obamacare exchanges and are expected to cost around $20 billion for this year and next year combined, are already the subject of a lawsuit that was brought by House Republicans against the department of Health and Human Services in 2014. In November, a district court judge ruled that the subsidies were illegal because Congress never appropriated the money, but the judgment was suspended while the Obama administration appealed.

But now that Donald Trump is in charge, the complexion of the lawsuit is completely different. His administration was granted a three-month extension by an appeals court on a deadline to find a resolution to the issue in February, but that conciliation takes a whole different tone now that Trumpcare has failed.

Previously, both parties involved were expected to agree that the subsidies should be permitted to continue since they would allow for a smooth transition to the new Republican health care plan, but now it seems that Trump wants anything but smooth sailing for Obama’s signature Affordable Health Care Act. After the Trumpcare bill failed on Friday, the president said he would be happy to sit back and let Obamacare “explode” in order for Republicans to swoop in and save the day afterwards.

Even if the Trump administration doesn’t decide to kill the subsidies down the road, it can just wait to make its decision. Insurance companies only have a few more weeks to choose whether or not they will participate in the exchanges next year. Many could elect to opt out if they are uncertain about what their government funding will look like. By waiting to announce they’re keeping the subsidies around until after some of these insurance companies have decided to leave the marketplace, President Trump and Congress can look like they’re trying to make sure as many people as possible are covered while still damaging Obamacare.

Make no mistake, there are several other ways Republicans can hurt Obamacare, including weakening the mandate that requires people to either get health insurance or pay a tax penalty. Such an action, already proposed by the administration last month, would serve to destabilize the system since it would mean fewer people would seek coverage. Overwhelmingly, those people would be the most healthy, and therefore least costly, to provide care for. Losing the money they contribute to the marketplace would send premiums up for everyone else, as insurance companies would have to find somewhere to defray the costs of providing expensive treatments to their less healthy enrollees.

But by choking off money that is directly funneled to the insurance companies, Republicans can hurt Obamacare with a top-down approach. By squeezing some insurance companies out of the marketplace, they can at least try to pawn the blame off on them. And it there’s one thing we’ve learned from last week’s Trumpcare disaster, people want health care, and Republicans have learned that they have to look like they do, too.

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