March 27, 2017

Trump says he'll let ACA 'explode'—then work with Democrats

Daily Briefing

    President Trump on Friday said Republicans should allow the Affordable Care Act (ACA) to "explode" due to rising health insurance premiums, arguing that U.S. residents affected by the increases will blame Democrats who supported the law.

    Trump made the comments shortly after House GOP leaders pulled their bill, called the American Health Care Act (AHCA), to repeal and replace the ACA.

    Trump blames AHCA's failure on Democrats, conservative Republicans

    In an interview with the New York Times, Trump called out Democrats for the AHCA's failure and predicted that Democratic lawmakers would seek to make a deal within a year, after—he said—the ACA fails because of increasing premiums. In an interview with the Washington Post, Trump said allowing the ACA to fail would be "the best thing" Republicans can do "politically." He said, “The beauty is that [Democratic lawmakers] own Obamacare. So when it explodes, they come to us, and we make one beautiful deal for the people.”

    Trump also pinned blame on the House Freedom Caucus, which opposed the AHCA for not going far enough to repeal the ACA. However, Freedom Caucus Chair Mark Meadows (R-N.C.) on Sunday said Republican lawmakers over the past few days have continued to discuss how they could "come together ... and try to get this over the finish line," adding, "We are in the negotiation process."

    Observers contest Trump's comments on ACA's future

    Some observers criticized Trump's suggestion that Republicans should allow the ACA to fail. Former acting CMS Administrator Andy Slavitt said allowing the ACA to fail would be "like inheriting an overseas war, and deciding you let your own soldiers get killed because you didn't elect to enter that war."

    David Cutler, an economics professor at Harvard University who advised former President Barack Obama on health care, challenged Trump's assertion that Democrats would be at fault if the ACA fails. Cutler said Trump now "owns" the ACA "because he could take many steps to stabilize things."

    Hospital stocks shoot up after GOP health reform bill fails—but what's next?

    In addition, some insurers said the Trump administration's actions could influence their decisions on whether to participate in the ACA's exchanges. Molina Healthcare CEO Mario Molina said, "The ball's sort of in their court. The choices they make are going to determine what happens to the marketplace."

    Analyses: ACA will not 'explode' on its own, but GOP could hamper the law

    Meanwhile, some analyses have countered Trump's claims that the ACA will collapse. For instance, the Congressional Budget Office has predicted that the ACA will stabilize over the long term, the Times reports. Aviva Aron-Dine, who served as senior counselor to the HHS secretary until January 2017, said, "My conclusion from the data we have is that the [exchange market] was poised for greater success."

    Further, the Times reports that Trump's claims about rising premiums were exaggerated. According to the Times, Arizona was the only state in which premiums increased by more than 100 percent this year. Premiums for benchmark plans sold through the federal exchange increased by an average of 22 percent from 2016 to 2016, according to HHS data. And those increases affected about 3 percent of the population.

    However, some experts say Republican policymakers could implement changes that likely would cause the ACA's exchange markets to fail, Reuters reports.

    For instance, Republicans could implement a federal budget that defunds the ACA's cost-sharing subsidies, though doing so could be politically unpopular, Reuters reports. In addition, the administration could take steps to deter enrollment in exchange plans for the 2018 coverage year, such as choosing to stop enforcing the ACA's individual mandate and not to promote the ACA's next open enrollment period.

    Molina said if Republicans "fail to act" or "don't act in an appropriate way, that will further destabilize the" health insurance market (Goldstein/Eilperin, Washington Post, 3/24; Pear et al., New York Times, 3/24; Sullivan et al. "PowerPost," Washington Post, 3/26; Hughes, Wall Street Journal, 3/26; Bender/Hughes, Wall Street Journal, 3/26; Humer/Abutaleb, Reuters, 3/25; Qiu, New York Times, 3/24; Diamond, Politico, 3/23).

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