Trump Personally Tried to Sabotage Obamacare in Iowa

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No deal. Photo: Mandel Ngan/AFP/Getty Images

Iowa has a plan to stabilize its Obamacare marketplaces by transferring insurance subsidies away from low-income people and toward the middle class, while also setting up a reinsurance program to limit insurers’ losses.

Progressives hate the proposal. But the conservative Republicans who wrote it think it’s grand — and, critically, so does the state’s largest insurer, Wellmark Blue Cross and Blue Shield, which has promised to reverse its plan to leave the state’s individual insurance market if the reforms are put into effect.

In its broad outlines, Iowa’s proposal would do much of what every version of Trumpcare has aspired to: bring down premiums for middle-class people aggrieved by their lack of access to Obamacare subsidies; screw over the poor; and please insurers.

And yet, when President Trump got wind of the plan in late August, he ordered his Health department to kill it. As the Washington Post reports:

For months, officials in Republican-controlled Iowa had sought federal permission to revitalize their ailing health-insurance marketplace. Then President Trump read about the request in a newspaper story and called the federal director weighing the application.


Trump’s message was clear, according to individuals who spoke on the condition of anonymity to discuss private conversations: Tell Iowa no.


… It was a Wall Street Journal article about Iowa’s request that provoked Trump’s ire in late August, according to an individual briefed on the exchange. The story detailed how officials had just submitted the application for a Section 1332 waiver — a provision that allows states to adjust how they are implementing the ACA as long as they can prove it would not translate into lost or less-affordable coverage.


Iowa’s aim was to foster more competition and better prices. The story said other states hoping to stabilize their situations were watching closely.


Trump first tried to reach Price, the individual recounted, but the secretary was traveling in Asia and unavailable. The president then called Seema Verma, administrator of the Centers for Medicare and Medicaid Services, the agency charged with authorizing or rejecting Section 1332 applications. CMS had been working closely with Iowa as it fine-tuned its submission.

Now, there’s a strong case that Iowa’s waiver request should be denied — its proposed reforms are so right-wing, they may actually be illegal. “The courts won’t stand for this,” health-care law expert Nicholas Bagley wrote last month. “The [Affordable Care Act’s] guardrails are really restrictive …they suggest that a state’s waiver can be approved if and only if it doesn’t make a substantial number of people worse off than they were under the ACA. Iowa’s waiver flunks that test.”

But it’s highly unlikely that Trump tried to block the waiver out of deference to the letter of Barack Obama’s law. While the Journal did mention opposition from the National Alliance on Mental Illness and the American Cancer Society toward the bottom of its story, the article’s main thrust was that Iowa’s plan would keep its largest insurer in all of its counties, reduce premiums for the middle class, and serve as a potential model to other Republican-controlled states looking to strengthen their exchanges.

Given that the Trump administration is now openly sabotaging the Affordable Care Act, it’s safe to assume that the president tried to kill Iowa’s request for the very worst of reasons. In recent weeks, Health and Human Services has spread doubt about whether it will enforce the tax penalty for refusing to sign up for insurance; cut funding for the law’s outreach groups; slashed Obamacare’s advertising budget by 90 percent; spent a portion of the remaining ad budget on propaganda calling for the law’s repeal; cut the open-enrollment period by 45 days; announced that it would be taking healthcare.gov (where people can enroll in Obamacare online) offline for nearly every Sunday during that time period, for “maintenance” purposes; instructed its ten regional directors not to participate in state-based events promoting ACA enrollment; and, when asked about their rationale for pulling out of those events, released a statement saying, “The American people know a bad deal when they see one and many won’t be convinced to sign up for ‘Washington-knows-best’ health coverage that they can’t afford.”

And the president’s most ambitious act of sabotage may still be to come. Under Obamacare, participating insurers are required to keep deductibles and co-payments affordable for low-income people. In practice, this means that insurers must underprice the risk of covering such individuals, and, thus, accept a financial loss. To make that proposition more appealing to these for-profit companies, Obamacare provides them with “cost-sharing reductions” — subsidies that defray the insurers’ losses.
But for complicated reasons relating to a lawsuit that House Republicans brought against the Obama administration, Donald Trump can cancel those subsidies at will. And he has threatened to do just that, over and over again, for months. These threats, alone, have led many insurers to either pull out of the exchanges, or else jack up premiums high enough to offset the costs of covering low-income enrollees without Uncle Sam’s help.

But, according to the Post, the number of insurers participating in Obamacare is still too high — and the premiums on its plans still too low — for the Trump administration’s taste: A White House aide told the paper Thursday that “officials are considering action to end the payments in November.”

It’s still possible that Iowa’s waiver will be approved — the White House has yet to formally reject it. Regardless, the fact that Trump intervened directly to block it has two significant implications. First, it establishes that the administration’s sabotage campaign won’t end with Tom Price’s tenure at HHS (this thing goes all the way to the top). Second, it confirms that Trump’s approach to Obamacare is not ideological, but wholly egotistical.
Iowa wanted to subvert the ACA for the sake of advancing a version of Trump’s own ostensible health-care agenda. The president scrambled to block it because he has zero interest in promoting any particular health-care policy — last week, Trump said at a high-dollar fundraiser that he was thinking “I might very well end up making a deal with the Democrats,” because Republicans hadn’t been able to put a health-care bill on his desk.

Which is to say: Our president isn’t deliberately increasing the number of Americans who will go without insurance next year so as to advance an ideological project, but solely out of a (likely misguided belief) that doing so will increase his chances of one day writing his name on a fancy-looking document — and declaring Barack Obama’s signature achievement officially dead.

Say what you want about the tenets of movement conservatism, at least it’s an ethos.

Trump Personally Tried to Sabotage Obamacare in Iowa