Ever since the GOP repeal-and-replace bill crashed, President Trump has confidently vowed that it’s only a matter of time until Democrats come groveling to him on their knees, begging for a deal that will save them from the collapse of the Affordable Care Act. In other words, Trump and Republicans needn’t take any steps to shore up the ACA’s exchanges, because they have all the leverage in the battle over its future — indeed, they have suggested, the ACA’s implosion is inevitable, ongoing, and already nearly complete.
But Trump just blinked. And in so doing, he inadvertently revealed that despite the bluster coming from him and Republicans, the politics of the battle over the ACA’s future tilt against them.
The Trump administration has now quietly announced that it will refrain from taking an important step that could have pushed the ACA’s individual markets toward collapse. Specifically, The Post and The New York Times report that the administration will keep on paying so-called “cost-sharing reductions” to insurance companies to cover their reimbursement of out-of-pocket costs for about 7 million lower-income customers.
If Trump stopped the payments on his own, it could cause insurers to flee the exchanges, which would melt them down, potentially leaving at least 10 million people without coverage. Trump could do this right now. Here’s how: House Republicans had sued the Obama administration to block the payments, and last year a federal judge ruled that they are invalid but kept them going, pending the former administration’s appeal. Trump could drop that appeal, which would cause the payments to stop. But the Trump administration has decided not to do this — at least for now — and to keep the payments going.
“The withdrawal of the cost-sharing reductions would essentially torch the exchanges in most states,” Nicholas Bagley, a law professor and health policy expert at the University of Michigan, told me. “The Trump administration must think that it would be blamed for that. They’re admitting the politics are against them, at least with respect to something that has the potential to devastate the exchanges in a hot minute.”
Instead, by keeping up the payments, the administration has sent a signal to insurers that they should not exit the exchanges, at least for now. The administration does deserve credit for doing the right thing and averting the human toll that pushing the exchanges into collapse would have unleashed. But in pure political terms, this amounts to a concession of weakness.