Rampell: Sneaky backdoor repeal of Obamacare is working
By Catherine Rampell
Published: March 1, 2018, 6:01am
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Last year, much of the country watched with growing fury as Republicans tried to undo President Barack Obama’s signature achievement, the Affordable Care Act.
Americans stormed town halls. They jammed congressional phone lines. Some got hauled off to jail for acts of civil disobedience. Bill after bill attempting to dismantle Obamacare imploded. By October, it looked like Republicans had given up at last.
How wrong that was.
In the months since the last Obamacare vote, the Trump administration and Republicans on Capitol Hill have engaged in a sneakier, backdoor repeal.
In fact, next year there will be about 9 million fewer Americans with real health insurance coverage than would have been the case had pre-Trump policies stayed in place, according to a report released Monday by the Urban Institute.
By “real health insurance,” I mean plans that actually cover things — as opposed to plans that just take your money and then, legally, pay few if any claims. (These are sometimes nicknamed “buffalo plans,” because they pay out pretty much only if you get run over by a herd of buffalo.)
A handful of relatively low-profile, boring-sounding actions are to blame for the drop-off in the insured. They include repealing the individual mandate (which encouraged young, healthy people to buy insurance, holding down premium costs for the overall pool), shortening the open-enrollment period, reducing outreach and advertising, and killing subsidies designed to help pay for low-income people’s out-of-pocket spending.
Then last week, with little fanfare, the Trump administration released an even-more-damaging new policy: an expansion of “short-term” insurance plans.
Short-term insurance is supposed to provide just that — short-term coverage. Maybe you need a stopgap plan before school starts, for instance. These niche plans are exempted from Obamacare’s basic consumer protections.
They don’t, for example, have to be issued to people with pre-existing conditions. There also are no federal requirements for what kinds of care they have to cover, or how much of it. If these plans want to take your premium money and then never pay out a dime on prescription drugs or cancer treatments, under federal law, they don’t have to.
These lightly regulated short-term plans are typically much cheaper than Obamacare-compliant ones. But the reason they’re so cheap — the fact that they cover so little — is not always apparent when they’re being sold. Predictably, many consumers have gotten scammed.
The Obama health law restricted short-term plans to no more than three months. But under the Trump administration’s new rule, they would be allowed to expand up to 364 days.
Major consequences
This will have a few major consequences.
First, it will become even harder for consumers to tell the difference between plans that actually pay for things and those that don’t.
Second, for all the Trump administration’s rhetoric about improving mental-health care, fewer people will have access to it. Unlike ACA-compliant plans, short-term plans don’t have to cover mental illness.
Third and most important, it will further destabilize the individual insurance markets.
These not-so-short-term short-term plans will siphon off more young and healthy people from the exchanges, causing prices to rise. Hence the predicted decline in the number of nonelderly Americans with real, non-buffalo insurance.
Meanwhile, even as all these various backdoor repeal policies reduce the number of people with insurance, federal health spending on non-elderly Americans will go up. In fact, it will be $33 billion higher than would have been the case under previous law, according to the Urban Institute. That’s because as premiums rise, subsidies rise automatically, too.
What, you thought gutting Obamacare would at least save the government some money? Well, consider yourself buffaloed.
