Correction: Correction: This op-ed originally stated incorrectly that Affordable Care Act subsidies meant to defray out-of-pocket costs for lower-income people had been frozen as part of a court challenge brought by House Republicans. The subsidies remain in place as the case undergoes appeal.
Steven Brill is the author of “America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System.” He has received consulting fees from New York-based Oscar Health Insurance to help it explore a consumer information and ombudsman program.
“Enforce 1402! Enforce 1402!”
That’s what those who want to head off President Trump’s sore-loser vow to let the Affordable Care Act “explode” should be chanting — perhaps at rallies in front of the Department of Health and Human Services.
True, it’s not much of a battle cry, not nearly as catchy as “repeal and replace.” But that’s the point. The battle has shifted from catchy slogans and the drama of last week’s fight in Congress. It’s now about the mechanics of a 955-page law.
Two independent groups have recently opined that Obamacare is not in the death spiral that the president and House Speaker Paul D. Ryan (R-Wis.) claim to foresee. But the Trump administration and Congress have the power to make that prediction come true. They simply have to initiate — or, in the case of Section 1402, continue — a series of below-the-radar steps that could cripple Obamacare.
Section 1402, which appears on Page 119 of the ACA, is aimed at easing a problem that Trump himself has focused on: the onerous deductibles and other out-of-pocket expenses that often come with insurance plans on the ACA exchanges. The provision lays out a set of formulas that, in essence, requires insurance companies to waive some of the deductibles and other co-payments for lower-income families. Under 1402, the government is required to reimburse insurers for the cost of these waivers. About 7 million Americans benefit.
However, in 2014, Republicans in the House of Representatives sued the Obama administration, claiming that because Congress had not specifically appropriated this reimbursement money, the government could not dispense it. In May 2016, U.S. District Judge Rosemary Collyer (a George W. Bush appointee) enjoined Health and Human Services from continuing the payments.
The Obama administration, of course, appealed the ruling. But the case is on hold pending a decision by the Trump administration on whether to proceed with the appeal.
With the insurers now on the hook for the payments, and with the fate of any continued reimbursement so unclear, is it any wonder that many have fled or might soon flee the marketplace?
If the president and speaker were truly worried about unaffordable insurance, let alone the absence of a competitive insurance marketplace — how they have defined the “explosion” of Obamacare — they could simply agree to implement Section 1402. Congress could drop the suit, or the Trump administration could continue to fight it. Congress could even simply appropriate the money for the reimbursements.
Similar uncertainty surrounds another section of the law. Section 1342 promised to reimburse insurers that experienced extraordinary losses in the early years of the exchanges, when predictions about costs and revenue had to be made with no history to draw on. This program, called “risk corridors,” was derailed by a provision that Sen. Marco Rubio (R-Fla.) slipped into a broader spending bill in 2015. That, too, has caused insurers to flee.
Again, simply reverting to what the law clearly stipulates would help to stabilize the markets.
Am I carrying water for the insurance companies? It took me a while, but after four years of writing about the ins and outs of Obamacare and the health-care economy in general, I came to what should have been an obvious realization: When it comes to health care, the insurers — however lousy their customer service and opaque or worse their practices — are the only industry players on the consumers’ side of the equation. Like us, they pay medical bills. Everyone else dispenses them.
Which brings us to a third way Trump could enhance, rather than undermine, the opportunity for his constituents to get affordable health care. He simply has to keep his promise to bring prescription drug prices down to where they are in every other developed country, which is at least 40 percent below what we pay, based on my research. He could do it by using Medicare’s negotiating power, through a legislated set of price controls, or both.
The 40 percent cut could translate into a drop of 6 to 8 percent in premiums that the president has said are far too high. And it could reduce Medicare spending by $350 billion to $500 billion over 10 years, far more than the rejected Trump-Ryan bill was projected to save.
Beyond that, there are other choices before Trump as head of the executive branch. He could maintain the annual enrollment period at three months, or he could shorten it to end at the height of the holiday season, when people are likely to be preoccupied. He could make planned maintenance and upgrades to the exchange website, or he could let the site fall into disrepair. He could restore the marketing budget meant to encourage enrollment, or he could continue the starvation diet he put it on following the inauguration.
Rather than gloat or make vague offers to work with the president, Democratic leaders should immediately bring forward these and other specific, apolitical agenda items. Similarly, their supporters should highlight them rather than sloganize over unrealistic wish-list items such as single-payer.
And the press should keep tabs. Issues such as these rarely make headlines, but how the administration and Congress decide them deserves at least some of the breathless attention we just gave the seesaw battle over repeal and replace.
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