President Trump didn’t sabotage Obamacare

Four U.S. cities just sued President Trump for failing to faithfully execute the Affordable Care Act.

The governments of Baltimore, Chicago, Cincinnati and Columbus accuse the Trump administration of “waging a relentless campaign to sabotage” Obamacare by cutting its advertising budget, shortening the open enrollment period and ending some legally dubious subsidies.

None of these actions constitutes sabotage. Some were legally required. The exchanges are imploding because of Obamacare’s own regulations – not presidential malfeasance.

It’s true that the Trump administration spent 90 percent less on advertising during last year’s open enrollment period than the Obama administration spent the prior open enrollment. And it’s true that enrollment declined slightly – 8.7 million people signed up for coverage through during President Trump’s first open enrollment season, compared to 9.2 million people during President Obama’s final season.

But it’s unlikely that a smaller advertising budget drove this decline. Consider that the Obama administration nearly doubled ad spending in 2016 – and enrollment still dropped by half a million relative to the previous year.

Enrollment has fallen not because people aren’t aware of exchange plans but because people cannot afford them and the quality of the coverage offered is poor. In the exchanges’ first four years, individual market premiums more than doubled. Deductibles are high, and many policies feature narrow health care provider networks that may not include a patient’s own doctor.

The Government Accountability Office has cited high premiums as a key reason why people go without coverage.

The Trump administration’s decision to shorten the open enrollment period from three months – its duration between 2013 and 2016 – to the six weeks between Nov. 1 and Dec. 15 both last year and this year may also seem like a blatant attempt to undermine Obamacare.

But the Trump administration actually borrowed this idea from Team Obama. At the behest of insurers, the Obama administration issued a rule in 2016 that would limit open enrollment to six weeks effective fall 2018. Insurers wanted a shorter enrollment period to prevent people from waiting until they got sick to sign up for coverage.

The Trump administration simply accelerated implementation of the rule by one year. If anything, this move should have strengthened the exchanges, by discouraging people from gaming the system.

Then there’s President Trump’s decision to cut off billions of dollars in “cost-sharing reduction” subsidy payments to insurers in October 2017. Obamacare requires insurers to reduce co-pays and deductibles for silver plan enrollees who make less than 250 percent of the poverty level, or $62,750 for a family of four. The CSR payments reimburse insurers for these expenses – and were worth about $7 billion in 2017.

Surely ending these payments, which were explicitly required by Obamacare, constitutes sabotage – right?

Not quite. Obamacare established the payments. But it didn’t say where the money to fund them would come from. Congress later declined to appropriate any public money for the program. But the Obama administration made the payments anyway.

The House of Representatives sued the administration for violating its power of the purse. In 2016, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia ruled in the House’s favor, deeming the CSR subsidies unconstitutional.

In several cases, the Trump administration has stood up for Obamacare. Earlier this year, it denied Idaho’s request to allow insurers to sell plans that blatantly violated Obamacare’s coverage mandates on its exchange. Obamacare “remains the law and we have a duty to enforce and uphold the law,” said Seema Verma, administrator of the Centers for Medicare and Medicaid Services, which oversees

Accusing President Trump of “sabotaging” Obamacare may be therapeutic for its supporters. A quick look at the evidence shows that the law has proven more than capable of imploding on its own.

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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