It's been up for debate whether Obamacare is failing, as President Trump and Republicans frequently claim. But a failing Obamacare could soon become an undisputed reality thanks to two major actions Trump took this week to undermine the law.

On Thursday, he signed an executive order that aimed to open up to more people short-term and less-regulated health plans that offer fewer benefits.

President Trump's health-care actions could have ripple effects throughout the Affordable Care Act's marketplaces. (Jenny Starrs/The Washington Post)

Most mainstream health-care analysts said that would peel off healthy people from the individual health insurance markets that Obamacare set up, which could leave a higher volume of sick people on the markets, which could cause premiums to go up for people still in the markets, which could lead more people to bail out of the system.

It was his most damaging hit to Obamacare yet. Until late Thursday, when Trump's White House announced he's basically pulling the nuclear option on Obamacare. He'll immediately stop issuing $7 billion in federal government payments to insurance companies. Insurers rely on these payments to make up for low-income people, who don't have to pay as much as the rest of the market for out-of-pocket expenses under Obamacare.

This is about as forceful a blow as the president can deliver to Obamacare. And it will likely fulfill his own prophecy that Obamacare is, indeed, failing.

Most health-policy experts agree that if these subsidies are taken away without a change in how much lower-income people pay for their health insurance, insurance markets would implode, forcing insurance companies to leave Obamacare exchanges, causing Obamacare itself to implode.

“It's an order of magnitude a larger assault on the integrity of the individual health insurance market,” said Paul Ginsburg, a health-policy expert and director of the USC Brookings-Schaeffer Initiative.

Now, insurers can back out of the exchanges. If the individual insurance market collapses, millions of Americans could lose their insurance and many others will see their premiums rise or even double.


(CBO estimates of the House version of a health-care bill. Undoing Obamacare entirely could produce similar numbers.)

 

Experts also warn that the unpredictability is bad for all health-insurance markets — individual or group markets — because insurers don't know how much the government will be helping them out.

Suddenly ending these federal subsidies is such a disastrous move for the entire health-insurance market that some Republicans in Congress were trying to keep these Obamacare payments going even as they tried to find a way to replace the entire law.

Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the top lawmakers on a key health committee in the Senate, were working to give Congress the power to issue these subsidies rather than the president, whose unpredictability was wreaking havoc on the individual market.

But twice in one day, Trump cut holes so big in the law that it could soon barely be readable. His intention appears to be to force Obamacare to fail in a way that forces Congress to fully repeal the law.

But that's a big gamble, given how intransigent various factions in Congress have been on health care. And Trump's latest actions could so clearly destroy the law that whatever happens next to Americans’ health insurance could fall squarely on him. Health-policy experts warn the fallout from what Trump did Thursday to the law won't be pretty.