The ObamaCare ‘Sabotage’ Meme

The solution for illegal health subsidies is a bipartisan trade.

 
 

Sens. Patty Murray and Lamar Alexander in Washington, Jan. 18.
Sens. Patty Murray and Lamar Alexander in Washington, Jan. 18. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
 

By our deadline Friday the world had continued to spin without interruption—planes taking off and landing; men and women commuting home after another week at work—and if you’re reading this then you survived the ObamaCare subsidy apocalypse of 2017. We’re referring to the political meltdown over the Trump Administration’s decision to end extralegal payments to insurers.

The White House leaked Thursday night that the government will stop making “cost-sharing” payments, which are ObamaCare subsidies for insurers that defray the cost of deductibles or co-pays for some folks below 250% of the poverty line. President Trump unloaded on Friday in one of his predawn tweets that “The Democrats ObamaCare is imploding” and “subsidy payments to their pet insurance companies has stopped.” Why he chose to swamp his Thursday health-care executive order with this fresh controversy is a mystery.

In any event, first order of business: The payments are illegal. The Affordable Care Act leaves the subsidies contingent on an annual appropriation, but since 2014 Congress has declined to dedicate the funding. The Obama Administration wrote the checks anyway, and the House of Representatives sued. Federal Judge Rosemary Collyer last year ruled that the Obama Administration had violated the Constitution, and an appeal is pending. 

Mr. Trump continued the payments on the hope that Republican health-care reform would repeal ObamaCare and moot the subsidy dispute. That did not happen. Now the Administration has decided to follow the Constitution, and fidelity to the law should trump the policy merits or political risks.

The left is accusing Mr. Trump of—this is a partial list—sabotaging the Affordable Care Act; conspiring to harm the poor; sending a wrecking ball into the American health-care system; killing people. One frequent citation is a Congressional Budget Office report from August that predicted premiums would increase if the subsidies ended, which is true.

Yet CBO also noted that the added expense would be covered by subsidies for individuals that increase with premiums. The market would continue to be stable by CBO’s report, and the change won’t invite the ObamaCare death spiral that Democrats would love to pin on Republicans. More generous individual subsidies mean the insurers now predicting Armageddon will still get paid.

But more uncertainty and turmoil could still drive some users from the exchanges, and the solution is straightforward: Congress can appropriate the money in a legal fashion. Republicans have an incentive to compromise, lest they have to take responsibility for rising premiums. Democrats could in exchange agree to liberalize the insurance markets—e.g., by repealing the individual or employer mandates, or allowing more flexibility on state waivers.

Republican Senator Lamar Alexander has tried to work a deal with Democratic Senator Patty Murray, but Democrats have refused to allow states any running room to experiment, aside from de minimis paperwork exemptions. Chuck Schumer has said for months that he’d negotiate once repeal was off the table, and now we’ll find out. If Democrats really care about the poor—and fixing a problem they helped create by violating the separation of powers—then they’ll compromise.

Meantime, the insurers will uphold the great American tradition of litigation and try to force the government to fork over the money. Mr. Trump deserves credit for upholding the Constitution, but this messy episode is one more consequence of the GOP’s failure in Congress to replace the Affordable Care Act.

Appeared in the October 14, 2017, print edition.

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