Trump Is Wrecking the Healthcare System and Hurting the GOP

On Thursday, Donald Trump did what healthcare advocates, insurance companies, and working people across America have been long dreading by pulling the plug on government funds that help keep the country's health insurance markets stable.

The administration announced plans to end cost-sharing reduction subsidies (CSRs), payments mandated by the Affordable Care Act that essentially reimburse insurance companies for offering reduced copayments and fees to low-income people. Obviously part of a broader plan to undermine the ACA because Republican efforts to repeal it failed in July and again in September, this is both a terrible idea on the policy merits and a looming disaster for the GOP. At a stroke, Trump is set to increase the deficit, destabilize health insurance markets, and hand his Republican allies a political hand grenade heading into the 2018 midterms.

Republicans have long opposed CSRs on the grounds that since Congress didn't specifically appropriate money for the payments as part of the regular budget process, they were illegal. In 2014, the GOP-dominated House sued to stop them in a case that's still winding its way through the courts. When Trump came into office, he acquired the power to end the subsidies any time he wanted, but faced the same political problem he did when it came to rolling back the ACA in Congress: Though Republicans had been campaigning against the law, a.k.a. "Obamacare," for years, their replacement plan was incredibly unpopular because it promised to jack up premiums and leave millions more people without insurance.

Cutting the CSRs will have its own uniquely pernicious effects. Since insurers still have to offer those reduced fees to poor customers by law, they'll have to compensate for the sudden loss of income by either leaving the ACA marketplaces or raising premiums on the people who buy insurance as individuals rather than getting it via their employers (as most Americans do) or directly from the government.

If insurers exit those markets, consumers will have fewer choices and potentially no choice at all in certain locales. But if they raise premiums, another ACA provision means that tax credits provided to individuals will also rise. That's why, according to an estimate from the nonpartisan Congressional Budget Office (CBO), the federal deficit will actually go up because of this move. As an odd side note, thanks to those increased tax credits, the CBO also says that the number of uninsured people will drop starting in 2020, though it warns that all these estimates are "uncertain and would depend on how the policy was implemented."

This latest assault comes an tandem with other Trump attacks on the law he hates more than any other. On Thursday, he signed an executive order that would allow more people to get health plans that cover fewer conditions, which could lead to premiums going up for some sick people. And in late August, he reportedly personally blocked an effort by Iowa to reform its state marketplace along conservative lines.

If Trump taking a bat to America's health insurance market looks like a crazy idea, Republicans seem to be aware they have a problem on their hands, particularly when it comes to CSRs. For months, members of the GOP leadership have been publicly calling on Trump not to stop the subsidies without some kind of alternative in place. Though some conservatives oppose CSRs on the grounds that the payments should be approved by Congress, the reality is that the payments are a necessary part of the current insurance regime—and disproportionately benefit red Southern states. "Without payment of those cost-sharing reductions, Americans will be hurt," Lamar Alexander, the Tennessee Republican who chairs the Senate health committee, said in August. You can't get more straightforward than that.

Alexander was part of a bipartisan effort in Congress to do the obvious thing and simply approve the CSRs in a new bill, which would defuse the conservative objections that focus on process and secure a measure of stability in the ACA marketplaces. But that push basically evaporated when Republicans launched a fresh repeal bill in September—one that, like all the others this year, they ended up scrapping.

A few Republicans have spoken out against Trump's move to end CSRs, with Florida congresswoman Ileana Ros-Lehtinen tweeting, "Cutting health care subsidies will mean more uninsured in my district." But Paul Ryan, the House speaker and a devoted Trump lackey, praised Trump for the move—meaning this is yet another issue dividing Congressional Republicans. It's easy to imagine more moderate Republicans, backed by GOP governors, pushing a CSR bill while the pro-Trump faction demands concessions from Democrats, which are not likely to come.

The grim reality is that the president of the United States is openly playing politics with the healthcare system. "Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!" Trump tweeted early Friday morning. But given that many Republicans want to keep the CSRs, and given that ending them will likely both expand the deficit and hurt consumers who rely on the marketplaces, Democrats have little incentive to cooperate. In fact, the party's leadership for months has been telling members that they, not the GOP, has leverage here. That was underscored this week by a new poll showing that 71 percent of Americans want the healthcare system set up by the ACA fixed, not destroyed.

In a statement, top Democrats Chuck Schumer and Nancy Pelosi called Trump's move Thursday "a spiteful act of vast, pointless sabotage… Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it."

They don't sound ready to call him. More likely: Republicans will beg Trump to call them.

After all, GOP politicians are increasingly trapped by Trump on this issue, like so many others. Either they take the blame for whatever instability results from the CSRs, or they work with Democrats to fix the problem Trump just handed them, likely inspiring some hate from their no-compromise right-wing base. This is one more shit sandwich for a party that's already facing the prospect of a fight over federal funding and a border wall that could end with a government shutdown—and the specter of primary challenges from candidates backed by far-right agitator Steve Bannon and his kooky billionaire backers in the Mercer family.

Beyond appeasing a small faction of fringe ideologues, it's hard to see what good Trump's attack on the American insurance market will do. It will likely cost the government money while making life harder and more expensive for consumers and giving people one more things to be mad at Republicans about.

But sacking the ACA market is at least sending DC and the press into another chaotic scramble as they struggle to deal with the fallout from another unilateral decision. If we know anything about Trump, it's that he loves to be at the center of manufactured chaos.

Follow Harry Cheadle on Twitter.