My column for the Washington County Daily News is online. Here you go:
President Trump, frustrated with Congress’ failure to repeal Obamacare, has begun to take unilateral action to reintroduce market forces into the health insurance market and pick at the pillars of Obamacare. His actions are a great first step.
Before getting into the specifics of Trump’s actions, we must note that the continued concentration of power in the presidency is abhorrent and an existential threat to liberty. That concentration has been progressing for decades, but greatly accelerated during the President Obama’s terms. Whereby Obama bragged about governing with a “phone and a pen,” Trump is exercising that same arbitrary authority. And while Trump’s most recent orders are good policy, the same power can and will be used for bad policy and worse. The fact remains that so much arbitrary power — the power over the lives of hundreds of millions of Americans and trillions of dollars — should never be concentrated in the pen of one person.
Obama used that arbitrary authority to implement Obamacare and make changes to our health care insurance market — sometimes in ways not legal. Trump is using that same arbitrary authority to make different changes to our health care insurance market.
Trump’s first executive order was a series of directives to various cabinet agencies and tweaks to find ways to allow more health insurance options and more flexibility in the health insurance market. The first directive was to the Labor Department to find ways to allow small businesses and individuals to collectively buy insurance through association health plans.
Allowing small businesses and individuals to group together — particularly if they are allowed to do so across state lines — would allow them to gain more purchasing power, better rates and in some circumstances, alleviate them of many of Obamacare’s regulations by shifting their plans under federal regulation instead of state regulations.
The second thing Trump’s order did was to allow people to buy more kinds of short-term health insurance plans. Obama limited these plans to 90 days, but allowing people to by plans for up to a year provides much more flexibility to people between jobs or open enrollment periods.
The third thing Trump’s order did was allow employers more ways to give employees tax-free money to pay for health care expenses elsewhere. In the past, some employers that did not provide health insurance could instead give their employees money to buy insurance on the individual market through a Health Reimbursement Arrangement (HRA). Obamacare forbade this accommodation and Trump’s order allows it again.
These series of changes are all positive and allow for more flexibility and competition in the health insurance market. It was Trump’s second action, however, that really undercut Obamacare. When the Obamacare law was written, the lawmakers knew that it would dramatically increase the cost of health care insurance. It sought to address that by shifting costs to the taxpayers in two primary ways. The first way was to give subsidies to people buying Obamacare policies if they couldn’t afford it through a tax credit.
The second way was to mandate that the insurance companies providing Obamacare policies cut what they charge health care providers — even if those cuts results in a loss to the insurance company. This was done with the understanding that the taxpayers would pick up the losses of the health insurance companies, but the Obamacare law never appropriated any money for such subsidies. Lawmakers at the time were justifiably fearful of being accused of subsidizing the profits of big health insurance companies, so they did not appropriate the money. President Obama picked up the ball and began illegally giving the health insurance companies subsidies to prop up their profits beginning in 2014.
Trump is ending this illegal practice. Ironically, all Trump is doing is following the law as written. The result is that the insurance companies are still required by law to keep their billings lower — sometimes below costs — but they will not get a check from the taxpayers to cover those losses. They will be forced to either pass those costs on to policy holders through massive premium increases, or exit the Obamacare exchanges. The structural flaws of Obamacare will no longer be covered up with billions of taxpayer dollars illegally funneled to insurance companies.
Obamacare has already failed America. Trump is just trying to mitigate and hopefully reverse some of the damage.