Displaying deal-making skills that employ vulnerable citizens as bargaining chips, President Donald Trump threatened on Wednesday to cut off subsidies that help poor people afford health coverage in order to get Democrats to the negotiating table on repealing the Affordable Care Act (ACA).
"Trump's hostage and his ransom are the same thing: He's threatening to cut off health-insurance subsidies for poor people if Democrats don't vote for his healthcare plan, which significantly reduces health-insurance subsidies for poor people."
—Eric Levitz, New York magazine
In an interview with the Wall Street Journal published Wednesday, Trump said he remained focused on overhauling the healthcare law—and that he was considering using cost-sharing reduction payments (CSRs), which reduce deductibles and co-payments for lower-income people, as leverage in the fight.
As the Huffington Post explained:
The healthcare law calls on the federal government to pay insurers the CSRs but it does not actually appropriate money for that purpose. The Obama administration had disbursed the money anyway, and devised a legal argument to justify the move. House Republicans sued, claiming the spending was unconstitutional, and last year a U.S. district court judge agreed with them.
The judge stayed the decision, allowing the Obama administration to file an appeal, and in the interim the federal government has continued to disburse the CSRs. But with the Obama administration gone, it's up to the Trump administration and its allies to keep the money flowing.
"Obamacare is dead next month if it doesn't get that money," Trump told the WSJ. "I haven't made my viewpoint clear yet. I don't want people to get hurt... What I think should happen and will happen is the Democrats will start calling me and negotiating."
An anonymous senior administration official confirmed to Politico that the president "wants to use [the subsidies] as leverage" to bring Democrats to the table.
As Eric Levitz summarized the stance for New York magazine, "Shorter Trump: Nice affordable healthcare for the poor you got here, would be a real shame if something happened to it."
In a statement, Senate Minority Leader Chuck Schumer (D-N.Y.) blasted the "cynical strategy," saying: "President Trump is threatening to hold hostage healthcare for millions of Americans, many of whom voted for him, to achieve a political goal of repeal that would take healthcare away from millions more. This cynical strategy will fail."
Threatened non-payment of CSRs appears to be one prong in the administration's scheme to sabotage the ACA, or Obamacare, HuffPo senior national correspondent Jonathan Cohn wrote this week.
Referring to Trump's WSJ interview, Cohn argued, "merely by making statements like these, Trump is rattling insurers."
Trump, House Speaker Paul Ryan (R-Wis.) and other high-profile critics of Obamacare have been arguing for years that its private insurance markets are collapsing. The reality is that they've been working fine in some states and struggling in others, with signs of gradual improvement overall, as a recent report from S&P Global Market Intelligence showed.
But that had a lot to do with aggressive management under President Barack Obama. Now the Republicans are in charge. They can turn their predictions of collapse into a self-fulfilling prophecy, threatening insurance for a significant portion of the people who depend on the law for coverage.
Indeed, Sarah Kliff wrote for Vox, the lack of clarity from the administration "is damaging to the Affordable Care Act. The uncertainty around the future of this program is making insurers skittish about signing up for the Obamacare markets. When two Iowa insurers pulled out of Obamacare last week, both cited the law's uncertain future."
"Part of insurers' worry is about the CSR money itself—$7 billion is a lot!" she noted. "Premiums would rise an estimated 19 percent should those funds disappear."
"But CSRs matter in a bigger way, too, that is about more than money," Kliff wrote. "Insurance plans want to know whether the Trump administration plans to stabilize Obamacare—or, as the president has suggested, let it explode. The decision on CSRs will be a bellwether of which way the administration leans. Right now we just don't have a great indication of where this will land."
Of course, Levitz pointed out at New York, "[t]here are a couple obvious problems with this plan."
For one thing, he wrote, "Trump's hostage and his ransom are the same thing: He's threatening to cut off health-insurance subsidies for poor people if Democrats don't vote for his healthcare plan, which significantly reduces health-insurance subsidies for poor people."
And furthermore, he added: "It will be hard to convince the public to blame Democrats for Obamacare's destruction, after you publicly declared your intention to destroy Obamacare so that people would blame the Democrats for what you did."