This tweet of President Trump’s yesterday illustrates what a clueless dick he is when it comes to healthcare policy:
As I have always said, let ObamaCare fail and then come together and do a great healthcare plan. Stay tuned!
— Donald J. Trump (@realDonaldTrump) July 18, 2017
Let me quote the key part:
…let ObamaCare fail and then come together and do a great healthcare plan.
People who talk like that — including some of the people who demand that Congress should “repeal Obamacare” — have no idea what Obamacare is or how it works. Obamacare is not just bolt-on legislation (like a subsidy or a tax) that can easily be removed. The Affordable Care Act was a complex, multi-phase restructuring of the healthcare insurance market that ran to 2000 pages. It created standards, regulatory bodies, organizational structures, mandates, taxes, waivers, funding channels, and a schedule for implementing all of it.
Obamacare is not something added to healthcare, it’s a transformation of healthcare. If you want to undo it, you can’t just remove it — not without throwing the healthcare market into chaos. You have to specify the transformation process that will produce the market structure you want. Consequently, the people who talk about “repealing Obamacare” are talking about a transformation of the healthcare insurance market that is every bit as fraught with risk as Obamacare itself.
I’m pretty sure that Trump has no idea what market structure he wants for healthcare. I doubt he’s thought about it much beyond a few aspirational slogans about how great it will be. And in the tweet I quoted, he isn’t even talking about something as vague as repealing Obamacare. He wants to let Obamacare fail.
In an insurance market, failure means that the insurance companies and their customers are unable to reach an agreement on price. It usually happens when premium prices start going up and policy holders who are least in need of insurance — those who have few claims — refuse to pay the higher prices and don’t buy insurance. That leaves behind only policy holders who have a lot of claims, so insurance companies have to raise premium prices to avoid losing money. That encourages even more policy holders to quit their insurance plans, and the cycle continues until the insurance companies give up and leaves the market, leaving everybody uninsured. This industry term for this is a “death spiral.”
It’s an open question whether ACA healthcare plans are in a death spiral. The ACA has features which are intended to prevent a death spiral, most prominently the individual mandate penalizing people for not buying insurance, which is supposed to keep policy holders from leaving when prices go up. However, there have been signs that a death spiral is in progress, such as rising prices and health insurance companies abandoning some markets. On the other hand, the market could just be shaking out — weaker players quitting because they can’t figure out how to operate profitably — which happens in a lot of new markets. It’s clear the Obamacare markets aren’t healthy, but it’s not clear if they’re actually failing.
Under the Obama administration, insurance companies had good reason to believe that the government would try to prevent a death spiral: This was Obama’s namesake legacy achievement, after all, and he would try to protect it. Since they were unable to get the cooperation of congressional Republicans, the administration was limited to making changes that were within the authority of the executive branch (although some argue they exceeded that authority). Nevertheless, the Obama administration kept a close eye on what was happening in the healthcare insurance market, and they kept tweaking the implementation of the ACA to keep things going.
Things are different now. With control of Congress and the White House, Republicans are in charge of healthcare policy and can do pretty much whatever they want. Yet so far, the various Republican healthcare plans haven’t addressed the “death spiral” issue at all. In fact, some of their proposals weaken the individual mandate without strengthening other aspects of the healthcare exchanges, which seems likely to increase the risk of a death spiral.
And as this tweet makes clear, Trump has no personal interest at all in keeping the exchanges going. But rather than dismantling them in an orderly fashion, Trump sees no problem with letting them fail. This is deeply callous. It’s the healthcare equivalent of owning a run-down apartment building and deciding that rather than repairing it, or even demolishing and rebuilding it, you’ll just let it collapse on its own before you try to rebuild.
Trump doesn’t seem to care that the failure of the Obamacare markets will have real harmful effects on people. It was a running joke that what Republicans didn’t like about “Obamacare” was the “Obama.” That struck me as unfair, but I think it’s accurate for Trump. Not in a racist way, as was implied by the joke, but in a personal way. Trump doesn’t care what happens to people who lose coverage if Obamacare fails because he sees this as a personal fight: He sees himself as the greatest President, a winner, and for that to be the case, all challengers must lose. He wants to see Obamacare fail because that will show the world he’s better than Obama.