• Daniel Ethan Finneran

Obamacare Is Dead: And We Have Killed It

October 2017


Obamacare is dead. And we have killed it. Thus spoke President Trump. But so long as the legislation limps along, the post-mortem is premature. Like a nine-lived feline, who’s not yet spent all second chances, the Affordable Care Act somehow survives. It’s been maligned to the point of moribundity, lambasted to the verge of last rites, yet it remains the law of the land. The Affordable Care Act, so it seems, is itself equipped to contradict death’s decree.


The latest prognosis, however, could change things. President Trump, in a calculated coup de grâce to his predecessor’s ailing legacy, started in motion the process to unravel Obama’s eponymous healthcare law. On Thursday of last week, Trump denuded Obamacare of some of its most important assets. He did so in a few ways. Through an executive order, he made it possible for like-minded guilds and small businesses to band together in order to buy insurance plans through Association Health Plans, or AHPs. An Association Health Plan is intended to ease the onerous restrictions associated with buying policies across state lines and to rouse competition amongst insurance companies providing the plans. If implemented, AHPs would have fewer rules to abide by than those plans covered under the ACA. While this is liberating for some, it could just as readily portend less protection for others.


In addition to implementing the AHPs, President Trump sought also to lift restrictions on short-term insurance plans. This type of plan, whose name is its own explanation, allows beneficiaries to choose cheaper, transitory plans. It is intended for the younger, healthier individual who finds himself uninterested in an expensive and interminable insurance plan. Again, in the same manner as the AHPs, the short-term insurance plans promise to distance themselves from many an Obamacare regulation. The short-term plan suits itself well for the young person in transit from one career to the next, or for the employee unwed to his life’s station, but nonetheless convinced that health insurance is a worthy hedge against interim health crises. This, to me, seems a good deal. Any measure that expands rather than constricts choice is worth pursuing.


The most consequential shake-up came when President Trump announced that the government would cease funding its cost-sharing subsidies. Heretofore, these subsidies—or cost-sharing reductions (CSRs)—were given to insurance companies who provided coverage to indigent Americans. The insurance companies needed a promise and a process whereby they might recoup losses incurred by providing insurance to those who could least afford it. In what became a legally-contentious move, the Obama administration agreed to offer subventions to offset those loses. In effect, the federal government subsidized the insurance companies. Some have called this a “bailout”, but the goal always was to save the country’s penurious citizens from a wretched life without coverage.


By removing these subsidies, the plight of the poor would seem to be imperiled. Mercifully, this is not the case; the ACA’s fine print prevents insurance companies from altogether abandoning these people. Without the subsidy, however, there is less incentive beyond that of altruism to do so. And, for most businesses, altruism for its own sake is seldom affordable.

Because the insurance companies are beholden to covering the poor, the cost differential must be made up somewhere down the line. No longer funded by the government, the insurance companies must pass the poor’s price tag to Americans who are more economically advantaged. Such policy holders, who generally reside in the middle to upper-middle class, could see their premiums increase by as much as twenty percent. This hike will make up the difference, but in doing so, it will infuriate otherwise prosperous families who stand to bear the brunt.


In responding to the now abrogated CSRs, the White House put out this statement: “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system”.


As previously mentioned, this line follows what Republicans have long contended, which is that the CSRs are in both word and deed illegal. Because they aren’t specified in the government’s appropriations cost, they’ve been invalidly implemented. This is the plain and entirely legitimated line of reason. This contention was heard in federal court, and there the CSR’s illegality was determined. From that time until now, the case has been pending in the U.S. Court of Appeals. And presumably, in suspension it shall remain. I’d be surprised to find Attorney General Sessions hastening to the courts for an immediate reversal.


All of this comes just weeks before November’s enrollment period begins. Insurance companies, who were likely prepared for this scenario as a potentiality ever since President Trump took office, must now dust off contingency plans and decide how best to proceed. Stock and stakeholders will be re-assessing investments and deciding whether or not, in the face of so much foreboding uncertainty, the financial markets are sufficiently stable. Politicians will be called to answer for their constituents’ grievances with impending mid-terms nearing. Worst of all, beneficiaries again will be forced to weigh cost-benefit analyses, as many are sure to see premium costs rise.


Still, stubbornly, Obamacare lives. It plods more ponderously than ever, looking everyday more like a failing revenant than a legal covenant. But until the final blow, it has a pulse.

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Success, ‘tis said, yet more success begets– On the prosperous rains ever more profits. So reads the adage of the Gospel’s Jew: The iron law, the Effect of Matthew. “To him who has much, more will be