Should President Donald Trump ‘let Obamacare fail’?

Yes: There will be few mourners for failed law

Weeks ago, President Donald Trump tweeted, “As I have always said, let Obamacare fail and then come together and do a great health care plan. Stay tuned!”

And indeed, the system established by the Affordable Care Act is collapsing on its own. Average premiums are up 105 percent since the health overhaul law took effect, and premiums will soar again next year, based upon early announcements. That will drive more young and healthy people away, further destabilizing the health insurance markets.

People in 40 percent of U.S. counties risk having only one “choice” of plan next year, and some may have none as insurers flee the market because of heavy losses.

Under Obamacare, millions of people were driven out of health insurance policies they liked and could afford and were forced to buy expensive plans dictated by Washington. Now Obamacare is the only coverage available to them.

Republicans, who control both houses of Congress and the White House, must act so millions of people aren't left without any health plan to choose from next year. They must provide a safety net for the next few years while building a new platform for better coverage going forward.

That is what bills in the House and Senate would do, although you’d never know it from reading headlines that warn “22 million people would lose coverage under Republican bills.”

Not true! Virtually all of these 22 million would voluntarily opt-out of health insurance once the Obamacare mandate that forces them to buy expensive policies or pay a fine is repealed.

The Congressional Budget Office says millions of people would simply drop coverage because the individual mandate penalties would be gone — including millions of people on Medicaid who pay nothing for their coverage. The CBO’s coverage estimates have been widely discredited.

And those Medicaid “cuts” that television ads say would leave disabled people without care? That wouldn’t happen either.

States would have hundreds of billions of dollars and new powers to modernize their Medicaid programs so they could provide better access to care. And in the process, the program could be saved for future generations.

Under Obamacare, Washington gave states a huge incentive to add able-bodied childless adults to Medicaid by paying almost all of the costs for these new enrollees.

But that means many states are leaving traditional Medicaid recipients, who have much greater medical needs and much lower incomes, on waiting lists. The Republican bills would rebalance the spending so Medicaid could focus on providing care for the most needy.

What about pre-existing conditions? They are covered. The current protections would stay in place unless states came up with a better plan — again, with new federal money — to provide assurances at least as good.

And what about insurance choices? States would regain powers to oversee their health insurance markets to give their citizens more choices of plans they could actually afford. The federal government has demonstrated it is inept in trying to direct health insurance markets as diverse as those in Montana, Manhattan and Miami.

Absent congressional action, the president could push Obamacare even closer to the edge with administrative actions such as further weakening enforcement of the individual mandate or backing off support during the open enrollment period this fall. But that is unlikely to happen.

Republicans know Obamacare is collapsing and have been working all year to try to pass a replace plan built on its crumbling platform.

They will continue that effort, possibly with bipartisan support once both parties realize the importance of rescuing people from this failing law. As Winston Churchill said, “You can always count on Americans to do the right thing — after they’ve tried everything else.”

No: Killing landmark program is wrong

By Dean Baker

Tribune News Service

After a Republican push to revamp health care came up short of Senate support earlier this month, President Donald Trump announced his new health care strategy. He was going to “let Obamacare fail” and then give us all really great health care.

The second part of this claim is, of course, absurd. The health care Republicans are proposing would be a disaster for tens of millions of people. This is the reason Trump and Republican congressional leadership are having such a hard time getting adequate support.

But the first part of Trump’s strategy is also clearly wrong. Obamacare is not failing; if it collapses, it will be because Trump and his Republican allies killed it.

The claim that Obamacare is failing rests largely on the number of insurers that have left the health care exchanges set up under Obamacare. Trump and the Republicans are continually pointing out that more than 1,300 counties only have a single insurer operating in their exchanges, meaning that there is no competition.

While Trump is predicting the situation will continue to deteriorate, with more counties with one or no insurer left in the exchanges, the experts who study the issue actually find the opposite.

The assessment of the Congressional Budget Office, the Kaiser Family Foundation and others is that the health care exchanges have largely stabilized and insurers are now able to operate profitably.

Contrary to the stories of a death spiral, the number of people getting insurance through the exchanges is actually increasing.

It is also important to realize that the lack of competition in the exchanges is primarily a problem for people who live in states controlled by Republicans.

More than 20 percent of the people who live in states with Republican governors only have one insurer in their exchange. Only 2 percent of the people who live in states with Democratic governors live in a county with a single insurer. This figure excludes North Carolina, where a Democratic governor just took over in January.

This gap is due to the fact that most Republican governors did not want Obamacare to succeed, while most Democrats did.

First and foremost, many Republican governors did not expand Medicaid. This expansion helped the exchanges by pulling out many of the less-healthy people from the patient pools in the exchange.

These governors also were not aggressive in promoting the exchanges. As a result, fewer healthy people signed up for insurance, making the exchange population less healthy than in states controlled by Democrats trying to make the ACA work.

In the story of Obamacare dying, Trump apparently plans to build on the success of Republican governors and undermine the exchanges in the states controlled by Democrats. And, he does have tools to do it.

The first tool is the reimbursements the government makes to insurers for covering out-of-pocket costs for low-income people. If insurers did not cover these expenses, insurance would be unaffordable for many low-income people. And, the insurers won’t cover the costs if the government is not picking up the tab.

More importantly, Trump could refuse to enforce the individual mandate. This is an essential part of the system, since insurers are prohibited from discriminating against people based on their health. Without the mandate, many healthy people will opt not to buy insurance until they develop a serious health problem.

This is a sure path to a death spiral. In this scenario, insurers raise rates because of their less healthy pool. The higher rates discourage more healthy people from getting insurance, further worsening the health of the average insure. This cycle continues until the pool only includes the least healthy and most expensive patients.

Through these and other mechanisms, President Trump certainly can kill Obamacare. But this is not letting the program die.

This story was originally published July 27, 2017 at 12:23 PM with the headline "Should President Donald Trump ‘let Obamacare fail’?."