Cogito Ergo Non Serviam

Trump Attacks Obamacare, Owns Problem Now

It is a well-established fact in Washington that Donald Trump is dedicating his presidency to the eradication of everything Barack Obama achieved in his two terms. Chief among these is the Affordable Care Act, colloquially known as Obamacare. Yesterday, he did two things that will undermine the ACA system. Rather than repeal and replace, Mr. Trump has opted to destroy the current system and leave nothing in its place. As a result, though, any problems with America's healthcare system now will be blamed on him and the Republicans because their "fix" didn't fix things.

The first act was to sign an executive order allowing the purchase of insurance across state lines. Although he almost walked out of the room without signing it, the ever-vigilant Mike Pence stopped the president and made him write his name on the document. This change will allow people to purchase insurance from a provider even if that provider is from another state. This is a major change in US insurance because states, not the feds, regulate the insurance industry.

At first blush, there is nothing wrong with this. However, some insurers will offer stripped down policies (because the minimum coverage levels have been scrapped), and healthy, younger people from across the country will opt for those, leaving behind the expensive-to-insure older sicker folks behind. That is the fear among ACA supporters. This journal is more phlegmatic about this change. If a big state, say California or New York, were to opt for a state-run, single-payer approach and if it worded its own laws correctly, Medicare for All through the backdoor is quite possible.

The other move Mr. Trump made, which is a lose-lose situation for everyone, will cease cost-sharing payments to insurance companies. The feds give the insurers about $7 billion a year to cover about 7 million poor people.

Amy Goldstein and Juliet Eilperin of the Washington Post explain, "Trump has threatened for months to stop the payments, which go to insurers that are required by the laws to help eligible consumers afford their deductibles and other out-of-pocket expenses. But he held off while other administration officials warned him such a move would cause an implosion of the ACA marketplaces that could be blamed on Republicans. The fifth year's open-enrollment season for consumers to buy coverage through ACA exchanges will start in less than three weeks, and insurers have said that stopping the cost-sharing payments would be the single greatest step the Trump administration could take to damage the marketplaces .... Ending the payments is grounds for any insurer to back out of its federal contract to sell health plans for 2018."

With open enrollment for next year beginning next month, most Americans involved in the exchanges. which help individuals get insurance when their company doesn't pay for it, will have fewer or even no choices. This will also mean higher premiums.

In his zeal to burn the Obama legacy to the ground so that he can rule the ashes, Mr. Trump has made a significant political miscalculation. Whatever happens in US healthcare now is going to be blamed on him. So long as there were no visible tweaks to the ACA, the program was a Democratic law passed without a single Republican vote. Now, it is Donald Trump's program, warts and all. He alleged (wrongly) that the system was imploding, and this executive action is certainly not going to fix things. The question will be "why didn't the Republicans fix it?"

This journal believes that a single-payer system is inevitable in the US given demographics and economics. Obamacare was the last attempt at a market solution, and by undermining it, Mr. Trump has ensured that the market is going to fail the consumers. When markets fail, governments intervene. All he has achieved here is bringing Medicare for All closer -- exactly what his fans don't want.

© Copyright 2017 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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