Most Americans (50%) get health insurance through their work, and another 34 percent rely on the government through Medicare or Medicaid. Because of the ACA, only 9 percent are uninsured. The rest — those who are too young to qualify for Medicare and too rich to qualify for Medicaid but want to buy insurance — deal with insurers that sell plans to individuals.
The Obamacare exchanges created to help some 13 million Americans buy quality and affordable insurance outside of the employer-based market. And the overwhelming majority of these people happen to live in rural parts of the country — the very same places that voted for Donald Trump.
Will Trump undermine these marketplaces or try to make them work by messing with or weakening provisions like the individual mandate or the subsidies?
If Trump wants to reduce the whole structure of the ACA into unworkable rubble so that Democrats will have to agree to replace it, the administration will have to sabotage it. Unfortunately, there’s a pretty easy path for them to do it.
First, the administration could eliminate enforcement of the individual mandate, which requires Americans to buy health insurance or pay a tax penalty.
Second, the administration could cut outreach about open enrollment.
Third, if Trump wants to throw Obamacare’s exchanges into chaos, he could choose to stop defending a lawsuit filed by the House of Representatives that attempted to halt the government from making what are known as “cost-sharing reduction” payments to insurers. Under the Affordable Care Act, carriers are required to limit how much low-income customers pay out of pocket for things like deductibles and co-pays. In return, the companies are supposed to get direct subsidy payments from Washington to cover the expense. Those checks are worth billions to the industry, since more than half of marketplace enrollees benefit from cost-sharing reductions, and are absolutely essential to making the marketplaces work.
Republicans in the House of Representatives sued the Obama administration a few years ago to stop the payments, arguing that because Congress had never technically allocated the money to fund them, the government was disbursing the cash illegally. If Trump drops the appeal, it could have profoundly damaging consequences for the insurance market. Insurers would still be required to keep offering low-income customers their discounts but wouldn’t be compensated for it. The result would be financially disastrous. Ending the cost-sharing reduction payments would require an active decision on the Trump administration’s part.