All Democrats and an odd coalition of very moderate and very conservative Republican Congressmen in effect voted that Obamacare was preferable to Trump-Ryan health reform.
President Donald Trump was not pleased: “The best thing politically is to let Obamacare explode,” leaving it “totally the property of the Democrats.” When folks “get a 200 percent increase next year — or a 100 percent or 70 percent” surge that’s “their fault.”
But the media will blame him and the Republicans regardless, so what should the president do?
He was on the right track to ignore the dysfunctional Congress, Democrats and Republicans alike, and let nature take its course on healthcare for a while. The House cannot fix it, so its leadership should back off from a planned second attempt next week.
The fact is the individual insurance that was the focus of the defeated House bill is a tiny part of health coverage. Medicaid, which was a part of the proposal, and Medicare insure almost forty percent of the population and a tenth or so are uninsured. But among the other half privately insured 88 percent are covered through their employer and only twelve percent by individual insurance. And, as with individual insurance, large employers who do not offer benefits that meet expensive Federal “minimum value and affordability standards” can be penalized.
After the individual Exchanges collapsed on day one, even President Barack Obama realized the better part of valor was to delay implementation of Obamacare for employer-provided private health insurance, and to defer the so-called Cadillac tax on generous high-benefit health insurance. President Obama further postponed the enforcement of penalties until 2017, leaving his successor president to handle complaints.
All those academic and journalist intellectuals, Democratic politicians, health lobbyists, and foundation experts — all extolling the benefits of Obamacare — and do not forget Congressmen with most of their premium paid by the taxpayer — are just now fully experiencing the joys of Obamacare. Indeed, most of the upper-middle class liberals who want Obamacare passionately for their more unfortunate brothers and sisters may not be so anxious for it themselves or for letting Obamacare’s Cadillac tax go into effect to further increase their health insurance burden.
Although almost completely ignored by the media and in the Congressional debates, the consequences of Obamacare for the employer market are just as dire as for the individual one. A 2016 Kaiser Family Foundation study found that, without counting the majority of premium costs borne by the employer directly, premiums for individuals under employer insurance increased by 20 percent for a family to $5,277, with deductibles exploding an incredible 63 percent and deductibles of $1,000 or more increasing by 51 percent between 2011 and 2016, increasing the de facto cost to each one of $7,000 or more per year.
Now it is the elites’ turn to see what the country has been complaining about.
President Trump did reach out to Democrats, but they want the tax penalty as the stick that forces young, healthy people to sign up to balance the sick people who know they need insurance, providing some balance on costs. But the tax penalty is one of Obamacare’s most unpopular features. Enforcement of the penalty has been delayed by Democrats so far, and to defer to them President Trump would have to override President Obama’s own policy of delaying penalties, hardly possible politically. Without the young, premiums would certainly surge dramatically.
By simply continuing his predecessor’s policy of delaying enforcement, more and more health insurers will be forced to abandon an increasingly unprofitable business.
Even if he approved enforcement, the insurance companies still need the Obamacare cost-sharing subsidy payments that are at issue in the lawsuit filed by the House of Representatives against the executive branch, challenging its authority to make such payments. Could the president fight the House and his voters in the name of subsidizing big health insurers $7 to $10 billion a year? If he did he would lose all credibility with his base.
On the other hand, all Health and Human Services Secretary Tom Price — who is now the defendant in the House suit — need do, is concede the House was correct legally, and the subsidy ends. Congress does not need to do a thing and Obamacare becomes unprofitable and expires.
The other possibility is for the president to again simply follow his predecessor and reform Obamacare through executive regulation alone — as President Obama did at least forty times. President Trump would need only three modifications.
First, a main sticking-point for conservatives has been overly permissive and expensive mandated benefits, especially for unproven types of preventive care. While these benefits are broadly listed in law, it is up to the HHS secretary to specify them. There is plenty of room to review and limit the number and type of specific requirements and their resulting expenses for both individual and employer plans, and Secretary Price would know just how to do it right.
Second, the most costly Obamacare provision was granting many above the poverty line access to the Medicaid entitlement. President Obama has already granted waivers allowing states flexibility under the program. Sec. Price could do the same, and much, much more. He has already revealed he would grant waivers to states that want to experiment more broadly. Such things as work requirements for the able-bodied, the less-poor paying premiums, and even leaving most regulation to the states are possible under such waivers.
Finally, President Obama has already granted broad waivers of individual tax penalties in “hardship” cases, including the harm of losing one’s old health insurance, which everyone has done by now. So, Sec. Price could simply rule that all Americans deserve hardship exemptions since they were promised they could keep their old insurance and in fact they could not. No one would be left penalized under Obamacare and all would be free to go in a different direction.
Indeed, President Trump signed an executive order in January directing HHS to minimize the regulatory burdens of Obamacare, to take steps to “waive, defer, grant exemptions from, or delay its rules.” All his administration needs to do is act.
Either nature takes its course and Obamacare explodes or through executive regulation it is radically redesigned. Either way a market would pretty much be left to develop under state regulation to work its way out of the present morass.
Imagine relying upon freedom? What a concept!
Donald Devine is a senior scholar at the Fund for American Studies, the author of America’s Way Back: Reclaiming Freedom, Tradition, and Constitution, and ran the nation’s largest employer health insurance plan under President Ronald Reagan as director of the U.S. Office of Personnel Management during the first Reagan term.