After the latest GOP Obamacare repeal bill went down in flames this week, US president Donald Trump latched onto a new scheme: Just let Obamacare collapse. “I’m not going to own it,” he said of Republicans’ efforts to repeal and replace the health-care law. “We’ll let Obamacare fail, and then the Democrats are going to come to us.”
If that’s his plan, he’ll be waiting a long time. Obamacare isn’t failing at all. The law will only run into serious trouble if Trump sabotages it.
Trump has mused about his let-it-fail backup plan for some time. In January, Trump tweeted that the GOP needed to “be careful” about repealing Obamacare, because Democrats would be to blame when the law “fall[s] under its own weight.” Then just days after taking office, he told congressional Republicans that he had thought about “doing nothing [on health care] for two years, and the Dems would come begging to do something” following “catastrophic price increases.” And when the House health-care bill ran into trouble in early March, Trump told conservative leaders that if the repeal and replace bill came up short, he would allow Obamacare to fail and let Democrats take the blame.
Yet while it’s a conservative article of faith that Obamacare is in the throes of a death spiral, all evidence suggests that the law’s individual insurance marketplaces are in good shape. The Congressional Budget Office in March rejected the notion that Obamacare is in a death spiral. Similarly, a recent study by the non-partisan Kaiser Family Foundation found that Obamacare’s markets are stable. Insurers are on track for profitability, and the markets’ risk pools appear sustainable. “Insurer financial results show no sign of a market collapse,” the study found.
All of which is to say that Obamacare won’t just come apart at the seams on its own. But if the president wants the law to fail, he and his fellow Republicans have plenty of opportunities to undercut it.
For example, Obamacare provides subsidies to insurers to help hold down premiums and deductibles for low-income people. Yet so far, the Trump administration has refused to commit to continue paying them. Meanwhile, House Republicans sued the Department of Health and Human Services to permanently stop these payments.
The uncertainty around the future of the cost-sharing subsidies—not to mention the prospect of repealing Obamacare entirely—has unnerved insurance companies, sending some to the exits and causing others to jack up premiums. For instance, Blue Cross Blue Shield told regulators in North Carolina that it would raise premiums by 23% next year instead of by just 9% because of the White House’s refusal to provide certainty on the subsidies.
The Trump administration has also played coy about whether it will continue to enforce the law’s individual mandate, which requires Americans to sign up for insurance or pay a penalty. Insurers consider the mandate crucial to the functioning of the law, since it ensures that inexpensive healthy people sign up for coverage and not just people with costly illnesses. But White House adviser Kellyanne Conway has suggested that the administration may refuse to enforce the mandate. And the Internal Revenue Service has decided to continue issuing tax refunds even to taxpayers who failed to provide proof that they complied with the law’s mandate to carry insurance. “We are still considering our options,” a White House spokesman said about enforcement of the mandate.
Reneging on Obamacare’s cost-sharing subsidies and loosening the individual mandate would go far toward crippling the law. Costs would skyrocket for Americans, and insurance risk pools would worsen, as only the people most in need of medical care will sign up at sky-high rates.
Trump could also sandbag Obamacare’s upcoming fall enrollment period by refusing to promote the law’s insurance offerings. It wouldn’t be the first time. Obamacare was on track for record enrollment at the end of last year. But when he took office, Trump pulled back on public outreach to encourage people to sign up, canceling a $5 million advertising blitz meant to promote the sign-up deadline. Weakened public outreach, coupled with relentless negative statements from the administration, could depress enrollment for next year—particularly among the relatively young and healthy Americans that insurers crave for stable markets.
None of this is to say that Obamacare could just coast on its own. There is a growing list of counties across the country that lack a single insurer willing to offer coverage. But where the Obama administration used to relentlessly cajole insurers to sell in so-called “bare counties,” the Trump administration hasn’t lifted a finger to solve the problem.
So Trump’s let-it-fail plan will only come to pass with the aid of the administration. And even if it did work, Trump has the political fallout all wrong. As Matthew Yglesias of Vox points out, voters will almost certainly blame the current occupant of the White House for any health-care deterioration that happens on his watch.
One can hope that “let it fail” is just a declaration that allows Republicans to cling to a semblance of dignity while retreating from the health-care fight—a way to save face while moving on to tax reform or other GOP territory. Yet if Trump is serious about executing Obamacare’s collapse, there are ways he can make it happen. But his fingerprints will be all over the rubble.