Trump May Have to Choose Between Openly Blowing Up Obamacare or Shutting Down the Government

Trump and his health-care advisers probably cannot avoid a decision over abandoning or continuing a challenge to a House GOP lawsuit that could make Obamacare unsustainable. Photo: Mark Wilson/Getty Images

After the House vote on the doomed American Health Care Act was canceled last week, both President Trump and House Speaker Paul Ryan predicted disaster for the Obamacare program that had escaped an outright repeal. The GOP line was that as Obamacare struggled Democrats would eventually come, hat in hand, with an offer to cooperate in enacting repeal-and-replace legislation, thus liberating Republicans from bondage to the House Freedom Caucus and the strictures of the budget process that made it difficult, if not impossible, to entirely repeal the Affordable Care Act.

The big question surrounding post-Trumpcare Obamacare was whether the administration and the GOP congressional leadership would wait for Obamacare to “die” of natural causes, or would give it a good firm push into the hereafter.

There are a variety of small administrative actions the Department of Health and Human Services can take — or refuse to take — that could stabilize insurance markets or make Obamacare coverage more attractive both to consumers and providers. And there is one big action the administration has threatened to pursue that would in the long run prove disastrous to basic functioning of the program: a loud refusal to enforce the tax penalties underlying the individual mandate, thus encouraging younger and healthier people to stay out of the system — making it more and more expensive for the people (increasingly old and sick) who remain.

The administration won’t have much time to think about it either —that’s because its hand will be forced by a case currently in federal court.

Last May, a federal district court judge struck down payments the Obama administration was making to insurers to help them cushion the impact of out-of-pocket costs for lower-income customers. Under the ruling, in order for the subsidy payments to be constitutional, Congress would be required to pass annual appropriations to cover the subsidies’ cost.

The ruling was placed on hold pending an appeal by the Obama administration. Now the Trump administration must decide whether to abandon that appeal, which would have the effect of killing an estimated $10 billion in subsidies insurers were counting on, just as they are deciding whether to participate in the purchasing exchanges in 2018. If the administration decides to side with the House GOP lawsuit, it will then have to decide whether to ask that same House GOP to appropriate the money for the lost subsidies to avoid a market meltdown. And the only opportunity to do so will be in the current-year omnibus appropriations bill due up next month, which is already loaded with political problems. Here’s how Caitlin Owens of Axios sums up the dilemma:

[T]heir next chance is the short-term spending bill due at the end of April — which is already almost certain to be mired in a fight over Planned Parenthood funding and money to build a wall along the southern border. The subsidies could get added to that spending bill, but “only if insurers agree not to abandon the market in the next couple weeks,” a senior GOP aide told me. And the payments could lead to a fight among Republicans, in addition to their likely battles over Planned Parenthood and the wall.

Indeed, appropriating $10 billion to keep an Obama promise to insurance companies as part of a broader effort to keep his legacy program alive sounds not only like a tall order for Republicans but certified grade-A demagogue bait for conservatives. It could very easily revive the “defund Obamacare” battle cry that led to the last actual government shutdown in 2013. But the alternative path isn’t easy, either, as Owens notes:

If Republicans want to make sure the Obamacare markets “explode,” as President Trump has predicted they will, their best course of action would be to leave the payments unfunded. But this is politically risky: People have a tendency to blame their problems on those in charge, and many people would surely lose coverage or see massive premium increases if the GOP goes this route.

So there’s Team Trump’s choice: risk a health-care bloodbath in hopes that Americans will blame it on a powerless minority party, or increase the already high risk of a government shutdown as members of Trump’s own party refuse to “bail out” Obamacare and Democrats refuse to let it (along with Planned Parenthood) die.

Speedy and shrewdly strategic decision-making has not been a signature characteristic of the Trump administration so far. But they may not be able to dodge this decision, and its many consequences.

Trump Has Power to Immediately Sabotage Obamacare. Will He?