By Upholding The Constitution, Trump Can Breathe New Life Into “Repeal and Replace”

Republicans are still smarting from the failure of the American Health Care Act just 10 days ago. Speaker Ryan acknowledged reality when he said in the aftermath of the bills collapse, “Obamacare is the law of the land . . . for the foreseeable future.”

“Foreseeable future” need not mean “forever.” Republicans can renew their effort to unwind Obamacare right now — by doing nothing more than standing down in a court case the House filed last year, in the twilight of the Obama administration.

At issue are Obamacare’s cost-sharing reduction subsidies, which compensate insurers for reducing the deductibles, copayments, and co-insurance for exchange enrollees earning between 100 percent and 250 percent of the federal poverty level.This year, insurers are poised to claim some $9 billion in cost-sharing reduction subsidies from federal taxpayers.

There’s a slight problem, though. These subsidies could well be unconstitutional.

The Affordable Care Act ordered insurers to help low-income exchange enrollees afford their deductibles, copayments, and co-insurance — and established the cost-sharing reduction subsidy program to reimburse them for doing so.

But Congress never appropriated the money to fund it. That didn’t stop the Obama administration from making the subsidy payments. Without them, insurers would’ve fled the exchanges.

Last year, the Republican-controlled House sued the Obama administration to try to block distribution of the subsidies. After all, the Constitution is clear: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”

Judge Rosemary Collyer of the U.S. District Court for the District of Columbia sided with the House but allowed the executive branch to continue distributing the subsidies pending an appeal to the U.S. Supreme Court.

In effect, the Obama administration ignored the Constitution in order to funnel billions of taxpayer dollars to insurers to keep its dysfunctional health law afloat.

The Obama administration is no longer around to defend its “creative” interpretation of the Constitution’s text. And the Trump administration is not bound to do so on its predecessor’s behalf.

Ending these unlawful payments by dropping the appeal would notch a win for the Constitution, hasten the collapse of the exchanges, and inject the drive to repeal and replace Obamacare with a new sense of urgency.

Even billions in unlawful subsidies have been insufficient to keep insurers in the marketplaces. UnitedHealth and Aetna, for instance, left all but a handful of exchange markets this year. Humana plans to get out of the exchange business entirely in 2018.

The exodus is creating health insurance monopolies around the country. In 2017, almost one-third of counties had only one insurance provider.Things may only get worse. Just last week, Anthem signaled its intentions to quit many of the 144 regions where it currently offers exchange coverage.

If Anthem exited the exchanges entirely, more than a quarter-million Americans in four states would have no exchange insurers to choose from next year, according to an analysis by the Robert Wood Johnson Foundation. Another 560,000 people in eight states would have just one insurer available to them on the exchange.

House Speaker Paul Ryan has indicated that he’s inclined to let the appeal of Judge Collyer’s ruling run its course — instead of asking the administration to drop it right now. Other Republicans in Congress, meanwhile, have vowed to appropriate $7 billion to fund the subsidies.

Neither would further the GOP’s stated goal of repealing and replacing Obamacare. In fact, ending the cost-sharing reduction subsides now — and hastening the demise of the exchanges — would force Congress and the administration to get back to work on healthcare reform.

Obamacare’s exchanges are going to collapse — if not this year, then in the “foreseeable future.” It’s time for Republicans to pull the plug on these unlawful subsidies — and restore momentum to their years’ long drive to repeal and replace Obamacare.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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