Among Donald Trump’s more pernicious and oft-repeated lies is that the Affordable Care Act (ACA) is imploding. It isn’t. But to the extent that problems are mounting, they are largely his doing. In March, the nonpartisan Congressional Budget Office (CBO) concluded that “in most areas,” Obamacare’s exchanges were stabilizing, and that most enrollees who received subsidies wouldn’t see their premiums increase significantly. Six months later, the CBO issued another report that, according to CNN, named “several policies the White House is pushing” that will lead “to rising premiums and decreased enrollment in individual insurance markets over the next year.”
In August, two months before Trump announced that he was discontinuing payments to insurers that limit out-of-pocket costs for low-income enrollees, a study by the Kaiser Family Foundation estimated that “uncertainty” about the possible move alone—along with doubts that the Trump regime would enforce the individual mandate—was causing insurers to request premium hikes for of up to 20 percent for 2018.
Trump seems to think he knows what he’s up to. He has said on multiple occasions that, as premiums spike and enrollment falls, congressional Democrats will be forced to come to him with hats in hand to negotiate some sort of replacement for Obama’s signature law. That’s a bad misreading of public opinion, which tends to hold the party in the White House responsible for virtually everything. Indeed, a Kaiser poll conducted in August found that 60 percent of respondents think Trump and Republicans would be “responsible for any problems with the ACA going forward,” compared with just 28 percent who said the same of Obama and Democrats.
It may be a political problem for Trump’s party, but a significant amount of real-world damage has been done. In January of 2014, when the Affordable Care Act’s Medicaid expansion kicked in, almost 18 percent of the population was uninsured, and in the 34 months that followed, that number fell to 10.9 percent, an all-time low. But in the year since Trump won the Electoral College vote on a promise to “repeal and replace” the law, the rate of uninsured has ticked back up to 12.3 percent. That trend doesn’t show any signs of slowing.
How exactly has Trump been sabotaging the ACA? Most prominently, he’s refused to pay a subsidy to insurers for reducing the out-of-pocket costs of their poorest enrollees. But in an interview with The Nation, Sam Berger, a senior policy adviser at the Center for American Progress who has been tracking these issues, says that it goes much further than that.
It’s hard to pin exactly how many people are leaving the exchanges as a result of the administration’s different methods of sabotage. It’s the combination of constant threats to repeal the Affordable Care Act—which may have caused some folks to think it was in fact repealed—and more direct forms of sabotage that significantly increased premiums in the marketplace and left some folks figuring that that they can’t afford coverage.
It’s really a whole of government approach to undermining the Affordable Care Act.… It’s been clear that the political appointees in the Department of Health and Human Services and the folks in the White House are doing everything that they can to make sure that this law doesn’t work, big and small.
What’s clear is that there was a trajectory of greater coverage and fewer uninsured. And as soon as Donald Trump became president and started working to undermine this law, we saw those trends reverse.
And this isn’t just crazy or unusual in a political sense—having a president actively working to undermine a duly enacted law. This has real consequences for people. People are going to be paying more for their coverage, or in some cases, people won’t have coverage at all. God forbid they needed that coverage, it won’t be there for them. That has tremendous consequences in folks’ lives.
Berger goes into more depth in our 20-minute interview, which you can listen to in the player above. Or you can read a transcript of our conversation, edited for clarity, below.
Joshua Holland: About 3.5 million more Americans are uninsured today than when Donald Trump was sworn in 10 months ago. How much of that can we attribute to the actions of the White House, and Republicans more broadly?
Sam Berger: With these things it’s always hard to pin an exact number, but I think it’s fair to say that a substantial portion, if not all of that change, is a result of their actions.
JH: Trump constantly claims that the Affordable Care Act is unraveling. How stable was the law when Donald Trump was sworn in?
SB: It was quite strong. The Affordable Care Act has been fantastically successful in reducing the uninsured rate, reducing it to the lowest it’s ever been in this country. We did see in 2017 a premium increase that reflected insurers’ still getting used to a new market, and a couple of [other] changes that happened that year. What we’ve seen from the financial statements since then is that insurers were moving towards profitability. In some cases, they were getting significantly into the black, and the expectation was that we were going to see low premium increases this year, reflecting only the continual cost increase of medical care. Instead, we’re seeing very large increases. While the majority of Americans that buy their insurance through the marketplace will be protected because they receive tax credits that increase with the premiums, it’s really the middle class that will be hit the hardest. They’re the ones that aren’t eligible for those tax credits because of their income, and so they’ll bear the full brunt of these 15, 20, 25, 30 percent cost increases that are the result of Trump’s sabotage.
JH: Trump has taken some concrete steps to undermine the Affordable Care Act. But before we talk about those, how has the uncertainty around the law’s future affected it?
SB: There are three ways that has an impact. The first is on prices. When you’re an insurer, you try to figure out how much providing insurance is going to cost you for the upcoming year. If there’s a threat that there’s going to be a huge cost increase because the administration’s going to undermine the law, then you price that in. It causes premiums to increase. And actually that’s one of the reasons why, when Trump finally canceled the cost-sharing reductions, there were some premium increases, but most of those had already been baked in, so to speak—insurers had already taken that into account, and they’d already increased people’s costs.
The second effect is scaring insurers out of the market. Insurance is, in some cases, a low-margin business. Insurers want to have some level of certainty. If they think the market’s not going to be there in one year, two years, they might decide that it’s just not worth the confusion and the risk, and just pull out. And you’ve seen that. You’ve seen some of the big insurers continue to leave. You’ve seen smaller insurers pull out. You’ve seen folks say, “Look, I was willing to go into a market, or I’m willing to come back if you just get rid of this uncertainty, if you stop threatening to destroy the marketplace.”
The third thing that it does is it creates confusion for people. Some of us spend our every day and night following what’s going on, but most people don’t. They have a lot of things going on in their lives. They can’t keep track of every twist and turn. They keep hearing all of this talk about how the ACA’s failing. It’s going to be repealed. It has been repealed. It’s not there. And people think, “Oh, well maybe it’s not even worth taking a look because either it’s not there now, or it won’t be there in the near future.” We’ve seen an unfortunate number of people, a pretty sizable percent[age], that have that concern.
JH: I just want to briefly explain the cost-sharing payments that we’re talking about. The Affordable Care Act requires insurers to give low-income enrollees a break on out-of-pocket costs. The insurers have to offer those reductions. They have no choice. In order to make that policy work, Congress created these “cost-sharing reductions” payments, also known as CSRs, for the insurers. Because of some issues in the way the law was written, Republicans challenged the legality of the payments. But Obama, and then Trump, continued making the payments while the legal challenge worked its way through the courts—until he stopped making payments last month.
Obviously, that threatens to destabilize this market. If you’re an insurer, you could be making a fortune in another part of the market, but when you deal with this group of insured, you have to reduce their out-of-pocket costs, regardless of whether those subsidies are coming or not. So insurers have two choices: They can either raise premiums to cover the difference, or they can leave the exchanges.
Now, there’s an irony here. By cutting those payments, the government will actually have to pay out more money. According to the Kaiser Family Foundation, the government will have to shell out 23 percent more by not making those payments than it saves by cutting the payments. That amounts to $2.3 billion next year. How does that work? How can cutting payments cost the government more money?
SB: Well, first of all, I think this really shows that there’s no real policy rationale for doing this.
This is sabotage, pure and simple. The three effects of cutting these cost-sharing reductions are a 20 percent increase in premiums, about a million fewer people having coverage, and as you said, billions of dollars being spent unnecessarily. The reason that this happens is because basically, insurers only have two different ways to cover their costs. They get covered through the premiums that you pay, or your deductibles and co-pays. The law now, for certain eligible folks that receive these cost-sharing reductions, says you can’t change their deductibles and co-pays. That’s set. So the only choice they have is to increase the premiums. But those same people also receive premium tax credits. And those increase dollar for dollar when the premiums go up. But the premium tax credit covers a wider swath of people than the cost-sharing reductions. So when you increase the premium tax credits for low-income enrollees, you actually increase the total amount of money that’s being spent for everyone receiving a tax credit. So ultimately what you’re left with is that some folks will actually get a better deal. Again, it’s really the middle class that’s going to pay the price here. They’re the ones that don’t get premium tax credits, so they’re going to feel the full brunt of those 20 percent premium increases.
JH: We know that the ACA requires support from a wide swath of agencies, organizations, and both federal and state entities to make it work. Are they cooperating as well as they did in the Obama era?
SB: Running the ACA is complicated. There are a lot of different parts. And each state has a big role to play. Then there are outside groups that help enroll people or do other work to make the system function. They all depend on a lot of communication with HHS [the Department of Health and Human Services] to understand changes that are being made, how they can coordinate activities and how to avoid redundancies. Those groups have said, quietly, behind the scenes, that they haven’t been hearing anything [from HHS]. The normal amount of communication to ensure that we’re running the most efficient and effective program possible—that’s not happening.
In fact, in some cases, HHS employees are being told they can’t work with outside groups. And events have had to be canceled. It’s really a whole of government approach to undermining the Affordable Care Act. And to be clear, folks shouldn’t blame the career officials at HHS. They’re just following orders. But it’s been clear that the political appointees in HHS, the political folks in the White House, they’re doing everything that they can to make sure that this law doesn’t work.
JH: Sam Stein at The Daily Beast reported that Trump “spent taxpayer money meant to encourage enrollment in the Affordable Care Act on a public relations campaign aimed at methodically strangling it. The effort, which involves a multi-pronged social media push as well as video testimonials designed at damaging public opinion of President Obama’s health care law, is far more robust and sustained than has been publicly revealed or realized.” What other, less obvious mechanisms the administration has used to undermine the law?
SB: One of the big ones that hasn’t gotten quite as much attention has to do with the open enrollment period. Basically, they’re giving you less time and they’re trying to make it as hard as possible for people to know that’s happening. Instead of having 90 days where people can go to HealthCare.gov and shop around and look at plans, now it’s only 45 days. Then on top of that, they [HHS] are doing some unspecified “maintenance” on the site for 12 hours at a time on a number of Sundays, so it’s even fewer days than the original 45, when you count those periods in.
They’ve also drastically reduced marketing, cutting it by about 90 percent. That’s incredibly important, because a lot of folks don’t have it written down on their calendar that today is the day that open enrollment starts. Even if they did, all those dates have changed, so they’d have to know that the Trump administration secretly cut this in half.
It’s really important for folks who care about health care to make sure everyone knows that open enrollment this year, in most states, will run from November 1st to December 15th and that they go to HealthCare.gov and check out their options. Despite all these efforts at sabotage, for the vast majority of people, they’re going to be able to find plans between $50 and $100 a month.
JH: It’s often observed that red states and blue states are like two different countries when it comes to social services. Blue states provide far more generous benefits for health care, welfare, unemployment, and more. Because the Supreme Court ruled that the ACA Medicaid expansion was optional, the ACA has exacerbated those differences. For example, in the states that expanded Medicaid, those earning up to 138 percent of the poverty line are eligible for the program, but in states like Texas or Alabama, which did not, the cut-off for Medicaid is just 18 percent of the poverty line. And that’s only if you have kids. In 18 of the 19 states that didn’t expand their Medicaid programs, people without children are ineligible for Medicaid no matter how little they earn.
Are we seeing these same differences in terms of how states are responding to Trump’s moves to undermine the Affordable Care Act? Are blue states responding in a way that mitigates these threats?
SB: They certainly are, but it depends on the state, on the resources they have, and the extent to which they rely on the federal government for their enrollment. You see states like New York and California where they’re taking a wide range of steps to try and mitigate the damage, and maintain the levels of outreach that they’ve had in past years. Those are two states that basically run their own exchanges, rather than relying on the federal government. But even in states where they rely on the federal government to run their exchanges, there’s a lot that states can do in terms of getting the word out, and in terms of elected officials’ doing what they can, using their platform to make sure people are aware of what’s going on in their state.
Even some of the reddest places, we seen some recognition that these premium increases aren’t a good idea. But, unfortunately, when a state’s government doesn’t like the Affordable Care Act and isn’t willing to put in work to help people find out about their options, we’re going to see less effort to bring in insurers, which will mean higher premiums. And we’re going to see fewer people enrolled, which is also going to cause problems for the risk pool. You’ll have fewer healthier people in it, which will also cause costs to increase and have some real effects.
It’s sort of ironic that the end result of all this is that middle-class, working-class voters in very red states, who the Trump administration seems to think is its base, are the ones who are going to be hurt most by all these efforts to sabotage the law. They’re the ones that are going to see their costs go up, and in some cases, not be able to afford care, which can have disastrous consequences for families.