If Republicans really wanted to send Obamacare into a death spiral, they had the perfect chance to do so yesterday. In order to understand the opportunity they let pass them by, we need to dive into the weeds a bit to understand a court case on a little known funding mechanism for making health insurance affordable on the Obamacare exchanges.
It was understood by the framers of health care reform that the exchanges might not initially draw enough business from mostly healthy young people to offset the costs of insuring those with more chronic medical conditions. In order to keep premiums down and make plans more affordable, the law included subsidies to health insurance providers for covering low income participants. The problem was that there was no funding mechanism for this provision included in Obamacare. So the administration applied other funds from the Treasury.
In 2014, House Republicans sued the Obama administration over this and a federal district judge ruled in their favor, but stayed the decision to allow the administration time to appeal the ruling. That appeal was still in the works when Trump was elected. Immediately following the election, Republicans asked the court to pause its proceedings until February 21st (yesterday), presumably to give the new administration the opportunity to weigh how to handle the lawsuit.
Once Trump was inaugurated, with Jeff Sessions confirmed as Attorney General, all the administration would have had to do is drop the appeal and the federal district judge’s ruling would stand, ending the subsidies. The result would have been chaos in the insurance market – leading to the very real possibility that companies would either significantly increase their premiums or pull out of the exchanges altogether.
Instead, yesterday a joint motion was filed by House Republicans and the Justice Department to extend the current stay indefinitely in order to “allow time for a resolution that would obviate the need for judicial determination of this appeal, including potential legislative action.”
What this signals is that both the Trump administration and the Republicans in Congress are very well aware of the fact that they would face significant blowback if they were to trigger problems with the coverage provided to millions of people via Obamacare. While that has become increasingly obvious since they actually had the power to repeal the law, it is interesting to note that when they didn’t have that power, they constantly made great shows of being willing to blow the whole thing up. They had the opportunity to actually do that yesterday, but chose not to.