Oct 13, 2017

​Trump takes a sledgehammer to the ACA

Trump’s order sends an important signal about what he wants health insurance to look like. Photo: Evan Vucci / AP

President Trump left little doubt yesterday that he intends to do as much damage as he can to the Affordable Care Act's insurance markets. And he can do a lot.

The bottom line: The executive order Trump signed yesterday aims to undercut some of the ACA's core ideas about how insurance markets should work. His decision to halt the law's cost-sharing subsidies will blow up those markets in the short term. And his administration has taken a slew of other steps to undermine enrollment. There's one constant here — to wound the ACA as badly as possible.

The impact: Here's what will happen once the insurer subsidies are cut off:

  • Insurers have already locked in their premiums for next year. Many them will try to find some way to go back and tack on a premium major increase or, if they can't do that, to pull out of some markets entirely.
  • This will create even more pressure on Congress to guarantee funding for the subsidies, as part of a newly urgent bipartisan ACA fix. Having a fresh health care crisis on the front burner can't be good for tax reform, and getting an agreement on the ACA won't be easy.
  • If Congress doesn't act quickly, there's a decent chance insurers will sue the administration. They're still legally obligated to reduce their customers' out-of-pocket spending, and the law says they're supposed to be compensated for that.
  • The Democratic attorneys general of California and New York are already threatening to sue, too.

The fix: Congress can solve this. University of Michigan law professor Nicholas Bagley, an expert on this issue, told me that if Congress appropriates the money for these subsidies, they would begin flowing again immediately. The problem is, Republicans aren't in the mood to do that without some big concessions from Democrats — and the Senate bipartisan talks aren't anywhere close to a deal.

The executive order: It's short. It's vague. It leaves critical questions unanswered. But it does tell us where this administration wants to take the health care system — what it wants insurance, and insurance markets, to look like. It tells us Trump will at least try to get there on his own. And that alone tell us a lot.

Be smart: Insurance can cover a lot and cost a lot, or cover less and cost less. The ACA said insurance should be reasonably comprehensive and accessible to people who need it, even if that meant healthier people had to pay more. That foundational view of insurance is what Trump's order would attempt to reverse.

The ACA sought to flatten out the disparate experiences of the healthy and the sick. Trump would begin to resegregate them.

How it works: Association health plans — letting small businesses pool together to buy insurance coverage as if they were one large business — got most of the attention in the lead-up to yesterday's announcement. But, depending on how all this is actually implemented, the order's other provisions might pose a greater threat to the ACA's core principles.

  • "AHPs, I do not believe are going to sell junk insurance," said Chris Condeluci, an attorney and policy consultant who worked on the Republican side of the Senate Finance Committee during the ACA debate.
  • Association health plans are regulated a lot like the health plans offered by larger employers. Some of the ACA's consumer protections still apply: the plans cannot impose annual or lifetime caps on benefits, for example. They also can't charge one person in the association a higher premium because of a pre-existing condition.
  • The bigger threat to the ACA's framework might come from expanded access to short-term insurance plans, which are subject to hardly any benefit mandates and provide few coverage guarantees.

Go deeper

U.S. coronavirus updates: Death toll nears 11,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Recorded deaths from the novel coronavirus surpassed 10,900 in the U.S. early Tuesday, per Johns Hopkins data. More than 1,000 people in the U.S. have died of coronavirus-related conditions each day since April 1.

Why it matters: U.S. Surgeon General Jerome Adams said on Sunday this week will be "the hardest and saddest week of most Americans' lives" — calling it our "our Pearl Harbor, our 9/11 moment."

Go deeperArrowUpdated 9 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 11:30 p.m. ET: 1,347,803 — Total deaths: 74,807 — Total recoveries: 277,402Map.
  2. U.S.: Total confirmed cases as of 11:30 p.m. ET: 368,196 — Total deaths: 10,986 — Total recoveries: 19,828Map.
  3. Trump administration latest: President Trump's economic adviser Peter Navarro warned White House colleagues in late January the coronavirus could take over half a million American lives and cost close to $6 trillion, memos obtained by Axios show.
  4. 2020 update: Wisconsin Supreme Court blocks governor's attempt to delay in-person primary voting delayed until June.
  5. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  6. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  7. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  8. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Docs: Navarro memos warning mass death circulated West Wing in January

Image from a memo to President Trump

In late January, President Trump's economic adviser Peter Navarro warned his White House colleagues the novel coronavirus could take more than half a million American lives and cost close to $6 trillion, according to memos obtained by Axios.

  • By late February, Navarro was even more alarmed, and he warned his colleagues, in another memo, that up to two million Americans could die of the virus.

Driving the news: Navarro's grim estimates are set out in two memos — one dated Jan. 29 and addressed to the National Security Council, the other dated Feb. 23 and addressed to the president. The NSC circulated both memos around the White House and multiple agencies.