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Trump Administration Undermines Obamacare

With the Democrats in control of the House, nothing useful will come out of Congress in the next two years. That means that progress in domestic policy will have to come via regulation and executive action. Happily, the Trump administration is very strong on this front.

An underreported story is the administration’s regulatory reform of Obamacare. Here, the administration is implementing ideas that were developed in think tanks including Center of the American Experiment. In late October, the administration issued a guidance on Obamacare waivers and a proposed regulation that would expand insurance options available to employers and their employees. Together, these actions go a long way toward undercutting the one-size-fits-all regime that the Democrats imposed via the Affordable Care Act.

The administration’s initiatives haven’t been widely reported, but word is starting to get around. The Washington Post gets the point, and is not pleased: “New insurance guidelines would undermine rules of the Affordable Care Act.”

The Trump administration is urging states to tear down pillars of the Affordable Care Act, demolishing a basic rule that federal insurance subsidies can be used only by people buying health plans in marketplaces created under the law.

According to advice issued Thursday by federal health officials, states should be free to re­define the use of those subsidies, which began in 2014. …

States could allow the subsidies to be used for health plans the administration has been promoting outside the ACA marketplaces that are less expensive because they provide skimpier benefits and fewer consumer protections.

Obamacare made it illegal to buy cheap insurance by mandating a lavish suite of coverages, many of which are unnecessary for most consumers, and its proponents pretended to be surprised when insurance rates went up. Health insurance policies that “provide skimpier benefits and fewer consumer protections” at a lower cost are exactly what most consumers want.

In an even more dramatic change, states could let residents with ­employer-based coverage set up accounts in which they mingle the federal subsidies with health-care funds from their job or personal tax-deferred savings funds to use for premiums or other medical expenses.

If some states take up the administration’s offer, it would undermine the ACA’s central changes to the nation’s insurance system, including the establishment of nationwide standards for many kinds of health coverage sold in the United States.

Yes, that’s the idea.

The new advice, called “waiver concepts” because they are ideas for how states could get federal permission to deviate from the law’s basic rules, stray from those goals. Significantly, they would allow states to set different income limits for the subsidies — higher or lower than the federal one — and, if a state wanted, base the amount of help on a resident’s age, not income.

In a statement Thursday, HHS Secretary Alex Azar said: “The Trump administration is committed to empowering states to think creatively about how to secure quality, affordable healthcare choices for their citizens.”

It’s called federalism.

The concepts go beyond a variety of other steps Trump administration health officials have taken in the past year to weaken the ACA, which the president has opposed vociferously.

Until now, they have focused on bending the ACA’s rules for health plans. The administration has rewritten regulations to make it easier for Americans to buy two types of insurance that are relatively inexpensive because they do not contain all the benefits and consumer protections that the ACA typically requires.

The new steps go further by undercutting the basic ACA structure of the individual insurance marketplaces created for those who cannot get affordable health benefits through a job.

Congratulations, Mr. President! Well done.

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