Trump's latest Obamacare sabotage takes the fight to the states
Never mind the total drubbing Republicans got on November 6, and never mind that health care is largely what drove the biggest wave election in the House since Watergate. The Trump administration is taking further action to bring down the Affordable Care Act, action that will only harm more people in Republican states.
The ACA provides federal insurance subsidies for people to purchase policies on the marketplaces created in the law. That assures that people will be purchasing plans that comply with all of the protections set up under the law and that taxpayer dollars in the form of those subsidies are providing real insurance, not junk plans. Trump is now advising states that they can redefine the use of those subsidies, if they want to. That means they could allow the subsidies to go to the junk plans the administration has been promoting off the ACA exchange, the “short-term” catastrophic plans that they’ve ruled can now last as long as three years or the association health plans that don’t have to comply with the law’s requirements.
But even more drastic, the administration will allow states to let people with employer-based coverage set up accounts and receive the federal subsidies along with their employer subsidies, potentially throwing both the individual and employer-based group markets into chaos.
This undermines the national standards for health coverage that the law established. It would allow states to set their own income limits for the subsidies if they wanted to, at variance from the federal limits. The resulting confusion could drive some of the bigger, national insurance players totally out of the Obamacare markets. Trying to do business in numerous states all with different rules could be too onerous for some. This is precisely the pre-ACA environment that the law was trying to fix. It could lead to even great health disparities and access between Republican and Democratic states.
Whether the administration has the legal authority to do this a big question. An analysis for the Brookings Institute by Christen Linke Young, an HHS alumni from the Obama administration, says “there are serious questions” about whether these changes could even be allowed under the law and beyond that are “at the very least […] likely invalid” because this change has not gone through a formal rule-making process needed to change regulations.