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Donald Trump may have lost on Obamacare yet still controls its fate

LiveMint logoLiveMint 25-03-2017 Zachary Tracer

New York: The White House has long said there’s no second option after Friday’s failure to vote to repeal and replace Obamacare.

Yet President Donald Trump has previously mused about taking a different path: letting the health law collapse on its own and forcing Democrats to the table. And he returned to those remarks on Friday, saying, “We’ll end up with a truly great health care bill in the future after this mess known as Obamacare explodes.”

“It’s imploding and soon will explode and it’s not going to be pretty,” Trump said. “The Democrats don’t want to see that. So, they’re going to reach out when they’re ready.”

GOP leaders pulled their bill to repeal and replace Obamacare after it became clear they didn’t have the votes to pass it. There are several things the administration and Tom Price, Trump’s Health and Human Services secretary, can do to help the law or undermine it at a critical juncture:

Matt Lloyd, an HHS spokesman, didn’t respond to a request for comment on Friday about how the agency will approach the health law going forward. Sylvia Burwell, the department’s secretary under Obama, said there are “important steps that the administration can take to promote competition and affordability in the marketplace as well as maintain the quality improvements that millions of Americans have experienced.”

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It’s not clear House Republicans will be in any mood to help out the health law or its customers, either. House Speaker Paul Ryan said Friday that the health law was collapsing, and Republicans were doing its crafter a favour by working to repeal it.

In some states, Obamacare’s individual markets are chugging along, with several insurers offering coverage. In others, insurers have pulled out, leaving consumers with just one choice, or potentially none at all, as in some parts of Tennessee. Oklahoma’s insurance regulator warned on Friday that his state’s lone carrier was threatening to pull out. And premiums also vary significantly by market.

‘Fits and starts’

“A market can be going in fits and starts, and not be in a death spiral,” said Craig Garthwaite, a professor at Northwestern University’s Kellogg School of Management. “What I fear is we’re going to see more attempts to actively sabotage the market.”

Health insurers have asked for a few steps to stabilize the market ahead of 2018.

“For the past 18 months we had been looking at a few key items that had been necessary for stabilizing the individual market for 2018 and those things remain our priorities,” said Kristine Grow, a spokeswoman for America’s Health Insurance Plans, the industry’s main lobbying group.

Some of the changes include continuing the cost-sharing subsidies, eliminating the ACA’s tax on health insurers, and providing some supplemental funding to stabilize the ACA’s risk pools.

Robert Laszewski, an insurance industry consultant, said he’d advise insurers to approach the market cautiously, given the administration’s statements. “I would be as conservative as possible,” he wrote in an email. “My advice is that with the party in power betting on a collapse, no insurer should be bet their surplus account on untrustworthy and inept politicians. Simple as that. Batten down the hatches.”

Although Friday’s repeal attempt failed, Republicans are still in control of the law’s fate, said Seth Chandler, a visiting scholar at George Mason University’s Mercatus Center. “I don’t know that Obamacare will collapse everywhere if left to its own devices, but I do think it’s fair to say it’s in serious trouble,” Chandler said. “The Trump administration is going to have to choose where on the spectrum it wants to fall in terms of keeping the Affordable Care Act afloat.” Bloomberg-

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