Trump’s Health-Care Threats Are Nothing but Spite and Fury

In the past few days, senior Senate Republicans have made it clear that
they want to move on from Obamacare repeal. “We’ve had our vote, and
we’re moving on to tax reform,” Senator John Thune, a close ally of
Mitch McConnell, the Senate Majority Leader, said on Monday. When
McConnell himself laid out his plans for the final two weeks of this
congressional session, he didn’t mention health care.

But one Republican leader—Donald Trump—is still refusing to accept
defeat. On Saturday, the President demanded that the Senate vote again
on health care, and on Monday he repeated his threat to sabotage the Obamacare insurance exchanges. With
right-wing pressure groups, including the Koch brothers’
political network, egging him on, Trump is mulling whether to withhold
the payments that the federal government makes to insurers in order to
reduce the out-of-pocket costs that low-income policyholders face.

If Trump stops the payments, which are known as
cost-sharing reductions, or C.S.R.s, it would be an incredibly petty and
spiteful move, with an enormous and serious human cost. By Washington
standards, the sums of money involved are small: seven billion dollars
this year, according to the Congressional Budget Office. But to those
households that benefit from the C.S.R.s, the impact of stopping them
would be dramatic.

As anyone who has purchased insurance on an Obamacare exchange knows,
the policies often come with sky-high deductibles. According to the
health-information Web site, the average deductible for a “silver”-level plan is now more than
thirty-five hundred dollars for individuals, and more than seven
thousand dollars for families.

The C.S.R.s are designed to reduce the burden of these costs for those
Americans least able to afford them. The payments enable insurers to
dramatically reduce deductibles and other out-of-pocket costs for policy
purchasers who earn less than two and a half times the poverty line.
(For individuals, the income eligibility threshold is about thirty
thousand dollars a year. For a family of four, it is about sixty
thousand dollars.) Instead of facing deductibles that can run into many
thousands of dollars, these purchasers end up paying very little because
the federal government bears the cost.

Trump and some other Republicans routinely describe the C.S.R.s as
a “bailout” for the insurers. But the actual beneficiaries are American
households of modest means. Should the payments be stopped, these people
would suffer the consequences—as would countless others who don’t
benefit from the C.S.R.s directly. That’s because some insurers would
choose to exit certain markets, and those that remained would raise
their prices. An analysis by the Kaiser Family Foundation concluded that monthly premiums would rise by nineteen per cent, on average, and that in some states—including
several that voted for Trump—they would rise even higher than that.
Premiums would go up twenty-three per cent in Alabama, twenty-five per
cent in Florida, and twenty-seven per cent in Mississippi.

It might seem unthinkable for a President to treat his citizens as
political pawns in this way, and some Republicans are urging Trump not
to do so. “Without payment of these cost-sharing reductions, Americans
will be hurt,” Senator Lamar Alexander, the chairman of the Senate
Committee on Health, Education, Labor, and Pensions, said on Tuesday. Alexander also confirmed that his committee would hold
public hearings in September on how to stabilize the individual
insurance markets. That would represent a return to the traditional way
of making policy on Capitol Hill: call in outside experts, involve the
other party, and try to reach a bipartisan agreement. But Trump, despite
the stinging setback he suffered last week, doesn’t seem interested in
going down this route.

If he decides to stop the C.S.R. payments, he can expect not just
another political storm but a new contentious legal fight. The issue
of whether the White House has the right to authorize these types of
payments has been the subject of a bitter court battle for years, and on
Tuesday a federal appeals court allowed a group of Democratic state attorneys general to intervene in the case
and defend the C.S.R.s. “If Donald Trump won’t defend these vital
subsidies for American families, then we will,” Xavier Becerra,
California’s attorney general, said in response to the ruling.

Other than sating his desire for vengeance, it’s hard to see what Trump
would get out of committing to this confrontation. Stopping the C.S.R.s
wouldn’t persuade Susan Collins, Lisa Murkowski, or John McCain—the three senators who blocked the Senate Republicans’ repeal effort last
week—to change their minds. And it would only further sour relations
with the Democrats, whose help the White House will need if it wants to
pursue other aspects of Trump’s agenda, such as introducing permanent
tax cuts and launching a big infrastructure program. Perhaps John Kelly, the new White House chief of staff, who over the weekend placed courtesy calls to the Democratic leaders Chuck Schumer and Nancy Pelosi,
will talk Trump out of it. We shall see.


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