The collapse of legislation proposed by senators Lindsay Graham (R-SC) and Bill Cassidy (R-LA), coupled with the near-simultaneous resignation of Health and Human Services Secretary Tom Price, presents a turning point in this year’s health-care debate. Given the dual disappointments, policymakers and voters looking for long-delayed progress may wonder whether, and what, conservatives can do to restore patient freedom to health-care markets.
Congress still retains procedural options to continue legislatively dismantling Obamacare. In the interim, the executive can seize important regulatory opportunities to lower premiums for millions of Americans—and it appears President Trump is finally doing just that. Press reports over the weekend suggest the administration is preparing to revoke Obama administration regulations sharply limiting the sale of short-term health insurance plans.
What Is Short-Term Health Insurance?
Short-term health insurance plans generally do not comply with Obamacare’s myriad new insurance mandates—the same mandates that have more than doubled average individual market premiums since Obamacare’s major provisions took effect. Previously, insurers sold short-term health insurance for durations of up to 364 days. However, when liberals noticed how some individuals started using short-term plans as a lifeboat to save themselves from Obamacare’s crushing premiums, Obama’s HHS crushed short-term plans.
The short-term plan regulations, finalized by the Obama administration one week before last year’s election, demonstrate how liberals hope “consumer protections” protect individuals from becoming consumers. Administration officials expressed “concern” that the policies have “significant limitations”—for instance, Obamacare’s essential health benefits requirements do not apply to short-term coverage—and “may not provide meaningful health coverage.” As a result, bureaucrats prohibited short-term plans from exceeding 90 days in duration, and banned carriers from automatically renewing such coverage.
Jimmy Kimmel forgot to mention it, but prohibiting coverage renewals harms individuals with pre-existing conditions, because it forbids customers who develop a pre-existing condition while on short-term plans from continuing their coverage. In discouraging these short-term plans, the Obama administration preferred individuals going without coverage entirely over seeing anyone purchase a policy lacking the full panoply of “government-approved” benefits. The Trump administration can and should rescind this coercive rule and its perverse consequences immediately.
What Else the Trump Administration Can Do
Upon completing regulatory action to return to the status quo ante on short-term plans, the administration can take action it should have taken months ago: Restoring constitutional order by stopping the unilateral payment of cost-sharing reduction subsidies to insurers. Congress could also repeal the individual mandate penalty, allowing those who wish to purchase non-compliant short-term plans rather than taxing them for not buying costly Obamacare coverage.
Heretofore, administration officials had declined to act on short-term plans—the same reluctance that has prevented the administration from ending the unilateral payments to insurers. Perhaps federal bureaucrats fear de-stabilizing rickety insurance exchanges. But because this series of administrative actions would open new insurance options, failing to act perpetuates Obamacare, consigns millions of families to perpetually higher premiums, and in the case of the unilateral insurer payments, undermines the rule of law—all higher priorities than the “stability” of insurers whose profits nearly doubled during the Obama administration.
Obamacare advocates may complain that this series of actions would bifurcate insurance markets—a reasonable assumption. The exchanges would likely morph into something approaching a high-risk pool, with federal subsidies available to cover the cost of more expensive insurance for individuals with pre-existing conditions. Meanwhile, other individuals would have more, and more affordable, options.
That said, executive action should not prompt Congress to walk away from attempts to reform health care (or vice versa, for that matter). Whether through reconciliation instructions in the fiscal year 2018 budget this fall, the fiscal year 2019 budget next year, or other means, Congress should keep searching for opportunities to return patient-centered forces to health care, and provide needed relief from skyrocketing premiums.
When they next face voters, both President Trump and Republicans in Congress should prepare to tell them they did everything they could to fulfill their eight-year promise to repeal and replace Obamacare. They have much work yet to do to make such a claim credibly. Following the setback on Graham-Cassidy, they should roll up their sleeves and do just that.