This is an archived article that was published on sltrib.com in 2017, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Now that the Senate GOP health-care bill has collapsed, the chatter in Washington is all about whether Republicans and Democrats will or even can come together behind some kind of bipartisan deal to shore up the individual markets. Central to this question is the fact that President Donald Trump is now threatening to sabotage those markets himself. He appeared to renew this with an early-morning tweet that was odder than usual, if you can believe that:
"The Republicans never discuss how good their healthcare bill is, & it will get even better at lunchtime. The Dems scream death as OCare dies!" Trump tweeted Wednesday.
Senate Republicans were set to meet with Trump Wednesday to discuss what's next, and Trump's tweet appears to build on his vow Wednesday to "let Obamacare fail" to force Democrats "to come to us" eager to support a compromise on his terms. This tweet helpfully illuminates his emotional grasp of the situation, which is drenched in grievance and spite. Letting Obamacare "die" will punish Democrats (they will "scream death") for the collapse of his bill. Remember, he has raged at Democrats for not being willing to work with him as he tries to destroy Obamacare, apparently unaware of how absurd this stance is. Now he will make them "scream death."
But how seriously should we take this threat? Very seriously, until we have proof that he doesn't really mean it, or until Republicans take active steps to defuse it, which they can do if they choose to.
Trump can indeed do a great deal of damage. He can "let Obamacare fail" by refusing to renew the so-called cost-sharing reductions (a full explanation of the CSRs is here), which are paid to insurers to subsidize out-of-pocket costs to millions of lower-income people. If he did this, insurers would probably have to hike premiums by enormous amounts, and many might exit the markets, further destabilizing them, potentially causing many millions to have no access to coverage. We know Trump sees this threat as working in his favor: Back in April, he explicitly threatened not to continue the payments for the express purpose of forcing Dems to negotiate with him. The administration didn't go through with it, and the payments have continued, but that doesn't mean they won't be ended this time.
An insurance industry official told me today that insurance companies have gotten no indications from the administration that these payments will not happen this month. This official also told me that the industry would probably have received an indication if they were going to cease. So that may well mean this threat turns out to be empty.
For now, anyway. The next big thing to watch is what happens in late August. That is when lawyers for the administration and the House of Representatives are due to reappear in court as part of the ongoing litigation around the CSRs. The House previously sued the Obama administration to block the payment of the subsidies, arguing that they are unconstitutional if they are not appropriated. President Barack Obama fought this, and the current administration now has to decide whether to continue to defend the CSRs against the House lawsuit. If it decides not to, and if it decides to stop the payments, the damage could be severe. We will know a lot more next month.
As it is, the uncertainty around the payments has already done a good deal of damage. The American Academy of Actuaries recently noted that this uncertainty has already led insurers to price in the possibility of them disappearing as they set their premiums, and some insurers have openly blamed the Trump administration for their own premium hikes. At the same time, administration officials have dishonestly and reprehensively cited the partial results of their own sabotage destabilized markets harming people to make the case for the GOP health bill. Trump's tweet today suggests he may continue with this, only with a different goal: Getting Democrats to "scream death."
As it happens, congressional Republicans, if they chose, could put a stop to any such strategy by appropriating the money to cover the CSRs themselves, as the insurance industry has urged. At this point, there is no serious argument against doing this: Some Republicans have said it must happen, perhaps in part because they are mindful that they would likely be blamed for any serious chaos in the marketplaces that would result. Even Senate Majority Leader Mitch McConnell, R-Ky., has said that if the GOP health-care bill failed, Republicans would have to negotiate with Democrats over ways to stabilize the markets. And as Jonathan Cohn explains, there actually is room for bipartisan talks around an array of reforms that could give Republicans, and even Trump himself, some of what they want, in both substantive and political terms:
"Polls also show the public strongly supports bipartisan action and if Trump were to sign a bill, flanked by Democratic and Republican lawmakers, he'd get the kind of signing ceremony he so obviously craves. He'd even look like he was governing."
But first Trump would have to give up on the idea that if he "lets Obamacare fail," he will be able to grind down Democrats to the point where they will "scream death" and give him everything he wants. It's an absurd idea to begin with polls have suggested the public will hold Trump and Republicans responsible for further Affordable Care Act problems on their watch, so Trump doesn't have the leverage he thinks he does. But the key point is that Trump believes it is within his power to do this.