What Trump Should Do About Health Insurance

The Republican health care legislation has failed spectacularly in the House of Representatives and has been withdrawn.

"We’re going to be living with Obamacare for the foreseeable future," said House speaker Paul Ryan.

Maybe that's for the good, opined President Trump, because Obamacare will implode (Trump actually said "explode") on its own, and Republicans (and especially Trump) can then say I told you so. Just give it a little more time.

Ryan's "living with" assessment notwithstanding, it is well within the capabilities and motivations of Trump and HHS secretary Tom Price to make Obamacare's failure a self-fulfilling prophecy, so any sensible cynic naturally expects that they will. The ACA requires benevolent supervision by the executive, along with certain inputs from the Congress, and they are all Republicans. A government that doesn't want the law to work has lots of ways to see to it that it won't. There are early signs we are headed in that direction.

Oh, how they hate Obamacare! That's the only explanation for the abysmal legislation that came out of the House. (Well, not the only explanation; we could talk about what Paul Ryan wants to do to Medicaid.) These past weeks it became increasingly and abundantly clear how downright horrible the Republican replacement was. The CBO projected the law would reduce the number of insured persons by 24 million over ten years, with 14 million losses occurring in the first year.

Horrible, yes, but Republicans countered that Obamacare is "failing," in a "death spiral," and anything is better than its inevitable collapse. So, really, they were doing us a favor by putting Obamacare out of its misery.

Except that's just not true. Not even kind of true.

Signups on the ACA exchanges declined slightly (by about 4%) this year, for the first time since the law took effect. The slowdown came after a very strong early start in the open enrollment period, and coincided with Trump taking office and cutting open enrollment advertising and outreach activities—an example of the countless ways the executive can affect the trajectory of the law, as I alluded above. Open enrollment messaging is important to successful signups for any insurance system. You have to get the word out.

Even so, 12.2 million people bought insurance on the exchanges, despite all the current political upheaval. If the ACA really were in a "death spiral" consumers would be fleeing the markets in droves; they're not. Add to that the many millions who obtained coverage through Medicaid expansion and the uninsured rate remains at historic lows.

Premiums have been up recently but that alone doesn't say much. For the first years of the ACA premiums came in well below initial projections, which actually puzzled insurance experts. (Companies might have been selling below cost to establish market share.) Now they are at approximately the level they'd been expected to be at this point in time, so the premium performance over the law's complete existence is basically on track with early projections.

In other words, the only reason the current big hikes seem like an "explosion" in premiums is that they're being compared with their unexpectedly low levels in the early going.

Some analysts think the ACA markets have completed a "correction" and that insurance companies who remain are now positioned to make money, or at least stop losing it. It seems it took some time for insurance companies to figure out the lay of the land in this new environment, and now they have. That shouldn't be a surprise.

Some that exited arguably had ulterior motives. For example, Aetna threatened it would leave if its merger with Humana was blocked. It was. It did.

The premium hikes were never such a big deal from the standpoint most consumers, because most (but not all) of the persons buying insurance on the exchanges get subsidies from the government, and those subsidies adjust to at least partially offset higher premiums.

More problematic is the issue of high deductibles. It seems downright bizarre to hear Republicans complain about that, however, because high deductibles and narrow provider networks have always been central to Republican insurance philosophy. What's ironic is that Obamacare is in so many ways a Republican plan through and through; it's just that Republicans abandoned their own principles wholesale once the Democrats enacted them into law and attached Obama's name to it. Anyway, the now-withdrawn Republican legislation would have increased deductibles, not lowered them. A recently published analysis by the Kaiser Family Foundation projected deductibles going up an average of $1,550 under the Republican plan.

Which is essentially a critique in microcosm of what Republicans were offering, an offering that consistently failed to address even the acknowledged problems with the ACA that its critics complain about and its supporters agree exist. Not only would the Republican plan not have helped; it would have made things worse pretty much across the board. (There would admittedly have been some winners, such as healthy young people with good incomes. And the very rich, who would have seen tax breaks in the hundreds of billions of dollars.)

The overarching problem with the status quo is that ACA was birthed into the most extreme partisan political cauldron, one in which scorched-earth Republican opposition negated any possibility of bipartisan cooperation. So none of the fixes, tweaks, and improvements that any law as large and complicated as the ACA would obviously need were possible in the years following its enactment. That itself is an anomaly: traditionally there's been bipartisan agreement that an enacted law be adjusted as needed to make it better, but Republicans have done nothing but promise complete repeal. It's frankly amazing how well the ACA has performed while under constant hostile attack from the right.

So what to do now, as along with Paul Ryan we contemplate "living with" Obamacare, warts and all?

This is of course fantastical to imagine, but Donald Trump could, conceivably, change everything for the better. Doing so would require a level of personal understanding and engagement that he is almost certainly incapable of, and he'd have to abandon a lot of his campaign rhetoric denigrating the ACA. On the other hand, he could keep other rhetoric while burnishing his populist bona fides.

What kind of rhetoric might we want him to keep? As recently as this January, Trump submitted to an on-the-record interview with the Washington Post's Robert Costa and Amy Goldstein in which he promised that the pending Obamacare replacement would offer insurance that was better, cheaper, and would cover everybody. That was so spit-out-your-coffee absurd that you had to wonder if Trump had any idea what he was talking about. But darn it, he actually said it. And were he to actually attempt to make those things happen, we could all applaud. I would.

But as I said, his interview was absurd. The only conclusion that makes sense is Trump was completely, utterly clueless; that he never had the slightest understanding of the issues surrounding healthcare. Trump seemed to have really believed, during the election campaign and after, that Obamacare was so poorly conceived and incompetently constructed that all that was needed to set things right was to bring to power a government that knew what it was doing; he and the Republican Congress were just that government. How else to explain his grandiose promises that were as improbable as a perpetual motion machine? The fix in Trump's mind would be easy, cheap, and comprehensive—just wait and see! And every child would get a pony. Paul Ryan, who had other ideas, cringed in horror.

But maybe, just maybe, Trump's cluelessness betrays the scantest germ of a nascent genuine affinity for at least the idea of making health insurance more comprehensive, more affordable, and more universal—a notion clearly at odds with prevailing Republican ideology as exemplified by the legislation the House tried to pass. I am trying to edge up to this strange possibility cautiously. Maybe Trump, given a chance, would actually prefer to think about healthcare differently than the Republicans with whom he has so far made common cause. It's admittedly a long shot.

How could that conceivably happen? The first thing Trump would have to do is to actually learn some things. I am not being flippant or merely demeaning by pointing out that this is asking a lot, perhaps far too much given what we have to work with.

Trump is clearly not a detail person. He also has some genuine issues with discerning reality. Trump's conspiracy-theory mentality impedes not just his judging the place of Obama's birth and the role of Ted Cruz's father in the Kennedy assassination (among so many other things), but also his grasp a vast array of basic empirical understandings that are necessary to actually govern. His mind might be appropriately wired for self-promotion, doing real estate deals, and generally cashing in on a variety of sub-ethical hucksterish ventures (Trump University, for example), but it seems to not be a comprehensive general-purpose dot-connecting issue-understanding disciplined mind capable maintaining the requisite attention needed to work through big, complex problems—especially problems that don't involve a payoff to Trump at the far end.

But suppose Trump resolved to make the effort. Determined to learn. Aspired to understand. How should he proceed? He would clearly need to get out of the Republican echo chamber and imbibe a lot of information he's not heretofore been exposed to. The first thing would be to bring in healthcare experts from the other side; preferably, even, the architects of Obamacare, and allow them to teach him some things. They could explain why Obamacare is the way it is—why it must be the way it is, or something very similar. What are the strengths and weaknesses of its model, and of alternative models. Why the personal mandate was selected as the best way to provide for community rating—the requirement that insurance companies cover everybody for the same price, regardless of preexisting conditions. Trump might marvel that there are reasons, and that they make sense. It might also come as news to him that Obamacare has in many ways performed quite well.

Trump could learn what Obamacare costs the government. What it costs taxpayers. Who pays the taxes. Its effect on the deficit.

He could learn about the tradeoffs between coverage and premiums. Of what drives out-of-pocket costs.

He could learn about how Obamacare's web of agreements and relationships with providers and interests of all sorts specifically sought to ensure the solvency of hospitals, and to extend the solvency of Medicare by years.

Trump could learn about why and how Obamacare reduced the uninsured population in the U.S. by 20 million, while for the first time requiring a comprehensive suite of benefits (including prescription drug coverage, hospitalization, preventative care, mental health coverage, maternity care, and more) where previously the private market was dominated by bare-bones stripped-down plans that could be canceled as soon as the insured got sick. (Republicans often say these are the kinds of plans people "want." No. People don't want junk. It's just that before the ACA they were the only kinds of plans people could afford. People often didn't realize how useless they were until they needed them.)

Trump could learn what are the difficulties with selling insurance "across state lines," and why it is not a panacea. He'd have to understand the complexities of managing provider networks, and avoiding "race to the bottom" situations.

After learning all these things, Trump would need to judge whether or not Obamacare's goals are reasonable, and whether its approach (notwithstanding whatever problems it may or may not be having) is fundamentally sound. If they are and it is, then the obvious way forward is to keep the good and address the problems. To identify and fix what isn't working while not throwing out the baby with the bathwater. To build upon an already solid framework, if indeed that is what we have—not dismantle it and start over.

The big problem, of course, is that by now the well has largely been poisoned. So many have been told for so long (by—don't forget—the same people who brought you the abysmal just-failed Republican replacement) that Obamacare is a disaster. That revealed wisdom is now something that millions (including, apparently, Trump himself) just know. The universe of possibilities has shrunken accordingly by years of dishonest or ignorant rhetoric so that discussants have a hard time even agreeing on reality. Admittedly a little bit of un-shrinking has recently been done as many have suddenly come to realize what they were about to lose, and have belatedly protested (in congressional town halls, for example) its threatened removal. Nevertheless, the problem of agreeing on what is and isn't real is immense, perhaps insurmountable. And as we have seen, Trump just might be the last person you'd depend upon to gauge reality.

But if we wanted to try—if Trump wanted to try—how would we fix "what isn't working"? Consider an example. It's been widely reported that some areas of the country have only one health insurance carrier offering coverage on the exchanges, even as there are other parts of the country that have active, robust markets. (For example, the California insurance marketplaces are thriving.) Data show that premiums are higher in areas with less competition. Data also show that regions with few insurers tend to be sparsely populated. That suggests it is harder for insurance companies to make a profit in rural areas (Wyoming, for example), which seems utterly unsurprising. If that is so, the question becomes one of figuring out how to serve sparsely populated regions of the country—a goal that ought not to be controversial even if it is judged to be difficult or expensive. Some changes to the law might need to be made to address this.

So maybe we need to go back to the drawing board and figure out what to do about rural counties.  Doesn't it make sense to approach this from within the framework of the ACA? Alternatively, how would scrapping Obamacare make the rural problem more tractable? Don't forget: The private insurance market was broken prior to the ACA; just going back isn't a solution.

As an aside, one possible approach to addressing the rural problem would be to revisit the "public option"—an idea that received favorable CBO scoring in 2009, and came very close to being part of the original ACA law except for a threatened filibuster by one Joe Lieberman. Another would be to allow premiums to rise (while providing offsetting subsidies) until there are adequate carriers in underserved markets.

There is of course no free lunch. Ensuring that rural areas have access to affordable healthcare has a cost, and somebody must pay it. But we are a rich country; we are also the only advanced country in the world that doesn't guarantee healthcare to all its citizens. We need to decide what we want.

Back to Trump. Suppose he learns about Obmacare, understands its motivations, and agrees with its approach. Suppose he decides that the best way forward is fix what isn't optimal and to improve what we already have. At that point some very interesting possibilities open up.

The biggest interesting possibility is that Democrats become interested in working with the president instead of opposing him. Almost unthinkable, I know. But what if Trump could demonstrate he really gets it, and really wants to do something good? How could Democrats resist? They would have to at least explore the possibilities.

Suppose, further, that an engaged Trump exercising real leadership (oh, how improbable!) brings along a sufficient number of the least ideological Republican moderates who are willing to adopt his approach: improve, not replace. Real bipartisanship breaks out.

Can you imagine? I know, it's hard. But the thing might build its own momentum. Trump really learns and understands. Trump convinces Democrats of his sincerity. Trump explains to the country that he's got religion, that this time he means it. Republican obstruction starts to crack, not least because they'd be obstructing their own president. But also because some Republican legislators have seen for themselves (through the current wave of town hall meetings, for example) what a lot of their constituents want, and what they don't want to lose.

The forces arrayed against this possibility are immense. Paul Ryan would have none of it. Ryan's core motivation, his reason for being, is the dismantling of the welfare state. (Hence the gutting of Medicaid in the just-failed Republican legislation.)

Tom Price, Trump's HHS secretary, has been a devout, committed opponent of the ACA, which is why he was selected in the first place. There's no way he'll go along with Trump's conversion, so he will have to go.

The House "Freedom Caucus"—the most extreme right wing of a right wing party—will have to be cut loose. No big loss: their extremity makes them useless as a governing partner pretty much across the board. Ditch those few dozen in exchange for a true bipartisan relationship with Democrats.

Perhaps just as problematic, Trump himself almost certainly doesn't have the temperament and skills to pull this off—even if he were to be convinced of its rightness. Ryan's recalcitrance would provoke a Trump counter-attack, with all the name-calling and vitriol we've come to expect. Anyway, Trump needs Ryan for the rest of his agenda. And that remaining agenda is more important to Trump than healthcare, which means my entire exercise in fantasy has been misbegotten from the get-go.

Given the sheer improbability of what I've been suggesting, it's easy to imagine a more probable alternative (given the possibilities at hand) is the Bernie Sanders / Michael Moore vision of civil war and national bloodletting that eventually leads to single-payer. As the Chinese curse puts it, may you live in interesting times.

Copyright (C) 2017 James Michael Brennan, All Rights Reserved

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