Trump’s War on Obamacare’s Pre-Existing Conditions Rules Could Be a Boon to Democrats
The Trump administration is stepping up its war on Obamacare (the Affordable Care Act) through a new legal gambit: refusing to defend the law in court. But the move could wind up being a political gift to Democrats in the 2018 mid-term elections, as it targets one of Obamacare’s single most popular provisions.
Under Obamacare, health insurers are barred from denying coverage to people who have pre-existing conditions or charging sick people higher premiums. Trump’s Justice Department argues that the specific provision is unconstitutional after last year’s repeal of tax penalties on people who don’t carry health insurance.
Those penalties, part of Obamacare’s so-called “individual mandate,” are meant to prevent something called a “death spiral,” wherein healthy people only buy insurance once they have a costly medical need and ditch it at other times. The theory goes that would hike prices to an unsustainable degree across the individual health insurance market.
The fines on people who don’t have insurance will be gone starting next year. And now, the Justice Department is asserting that the entire concept of the individual mandate is unconstitutional (the Supreme Court ruled in favor of the mandate and penalties in a landmark 2012 case).
And if that’s unconstitutional, the “ban on insurers denying coverage and charging higher rates to people with pre-existing health conditions” should also be struck down, the DOJ argues.
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It’s a convoluted legal issue. The Trump administration hopes that the nation’s courts will ultimately dismantle these Obamacare tenets. It’s pushing that process along by refusing to defend the law from state challenges in court, as the federal government would normally be expected to do.
But it could prove a political land mine (and boon to Democrats) going into the 2018 mid-term elections, if polling and recent campaigns are any indication.
Obamacare’s popularity actually reached an all-time high in March, according to a poll by the nonpartisan health care nonprofit Kaiser Family Foundation (KFF), with 54% holding a favorable view of the law. And that’s the entire law; protections barring discrimination against Americans with pre-existing conditions have been overwhelmingly popular parts of the ACA from the get-go.
KFF senior vice president for health reform Larry Levitt noted the political dangers of putting these provisions in the administration’s crosshairs, pointing out that it could be an easy talking point for Obamacare supporters.
What’s more, voters in recent special elections and primaries have consistently pegged health care as a top issue—if not the top issue—for them going into the midterm elections. It’s pretty much neck-and-neck with the economy, according to polls from KFF, HuffPost/YouGov, and others.
The Trump administration has taken a series of steps to undermine Obamacare, including a number of attempted repeals, cuts to public outreach efforts, the individual mandate repeal, administrative changes (such as abruptly cutting off insurer payments meant to lower low-income Americans’ out-of-pocket medical costs), and more stringent requirements on the Medicaid program for the poor. Health insurers have cited these moves as reasons for extravagant premium hikes already.
To date, many low-income people have been shielded from those increases since federal subsidies to help pay premiums rise in tandem with the spikes. Middle-class families who don’t qualify for the subsidies are left either swallowing the higher premiums or forgoing coverage. If the protections for people with pre-existing conditions are ultimately shot down, there’s a strong chance insurers would begin charging sicker people significantly more for their coverage while younger and healthier Americans would see lower prices.