NO DICE

Donald Trump wants to scrap Obamacare but keep its most popular provisions. Too bad that’s impossible

The mainstream media is eager to normalize the presidency of Donald Trump. Among the latest evidence journalists have cited as reason for hope is Trump’s apparent willingness to save some parts of Obamacare. But don’t be fooled. Trump and congressional Republicans are still ready and willing to tear health insurance away from millions of Americans.

In an interview with 60 Minutes Sunday (Nov. 13), Trump said he plans on retaining Obamacare’s ban on insurers refusing to cover individuals with preexisting conditions, calling it “one of the [law’s] strongest assets.” He also said the law’s provision allowing young adults to remain on their parents’ insurance until turning 26 is something that “we’re going to very much try to keep[.]”

Let’s be clear about what this means. Trump’s position is now identical to that of Paul Ryan and the House Republican repealniks who have already tried to scrap Obamacare more than 60 times and are ready to try again. The House GOP spent 2016 teeing up its post-election legislative agenda in a series of policy papers called “A Better Way.” In the health care chapter, congressional Republicans vow to repeal Obamacare, but want to keep its ban on preexisting condition exclusions and its health benefits for young adults. So Trump, Ryan, and the rest of the GOP are on exactly the same page when it comes to repeal.

 Trump and the GOP want to keep the parts of Obamacare that benefit the middle-class and wealthy, while plundering the parts that mostly help the poor. Republicans are willing to let these pieces of Obamacare survive because they are popular. But the GOP is ready to shred every other word of the law. The Medicaid expansion would be rolled back, and the entire program kicked down to the states. Subsidies for individuals to purchase insurance would be yanked away and replaced with a tax break. The health exchanges would be dissolved. Government cost-sharing benefits to help people pay for premiums and deductibles would vanish. Most of the 20 million people who have gained insurance under Obamacare would face coverage disruptions or worse.

The upshot is that Trump and the GOP want to keep the parts of Obamacare that benefit the middle-class and wealthy, while plundering the means-tested benefits that mostly help the poor. Under the Republicans’ vision for health reform, a 25-year-old trust fund kid gets to stay on his parents’ insurance. But a single woman on Medicaid earning just above the poverty line would find her coverage in serious jeopardy.

But there’s a more fundamental problem with Trump’s stance on Obamacare: it wouldn’t work. To guarantee that people with preexisting conditions can actually get covered, you also need to keep the law’s community-rating requirement, which prevents insurers from charging higher prices to people with illnesses. Without this requirement, an insurance company could “offer” those with preexisting conditions coverage at exorbitant, unaffordable premiums—technically complying with the ban on discriminating against the ill, but making it practically impossible for them to actually purchase insurance. Without community rating, Trump’s supposed coverage guarantee is entirely hollow.

 Without community rating, Trump’s supposed coverage guarantee is entirely hollow.  And that’s not all. To make covering the ill at community rates a viable business for insurers, there must also be a lot of healthy people purchasing insurance to compensate for the costs incurred by the highest-risk patients. But if you’re a relatively healthy person, and you know you can wait until you get sick to purchase insurance, you might take your chances and go uninsured. That’s why Obamacare has an individual mandate to pull these people into the market, and subsidies to keep insurance affordable for them.

Suddenly it’s looking pretty hard to divorce Obamacare’s popular provisions from the rest of its structure. Critics argue that Obamacare’s structure is flawed, pointing to rising premiums and instability on its marketplaces. But this could be fixed by tightening the individual mandate and making the law’s coverage options more affordable and more appealing.

 Keeping Obamacare’s coverage guarantee is nothing more than an empty promise without the support of the rest of the law.  Yet the GOP plan would do the exact opposite, repealing the individual mandate and replacing it with a much weaker set of incentives to carry coverage. This would make it easier for healthy people to go without insurance, causing premiums to rise for everyone else. As insurance grows more expensive, the healthiest customers drop out of the market, leaving behind only the sick. This increases premiums even more for those remaining—undermining Trump’s guarantee of coverage for those with preexisting conditions and leaving them trapped in expensive markets teetering toward death spirals.

Keeping Obamacare’s coverage guarantee is nothing more than an empty promise without the support of the rest of the law. Obamacare’s coverage expansion is carefully calibrated to navigate the complexities of the health insurance market. It’s a three-legged stool, coupling guaranteed coverage for the sick with subsidies and an individual mandate, to ensure that markets remain sustainable and accessible to all. By getting rid of the law’s mandates and subsidies, Trump and Ryan would kick out two of these legs. This irreparably weakens the third leg that they want to keep—the ban on preexisting condition discrimination.

If Trump is serious about making sure that the sick can get coverage and treatment, he’s going to have to keep the overarching structure of Obamacare, too. Short of that, Trump’s promise to protect those with pre-existing conditions is one big hoodwink.

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