Politico’s story on Trump sabotaging Obamacare is a mess
posted at 1:21 pm on March 15, 2017 by John Sexton
Yesterday Politico Magazine published a story titled “Is Trump sabotaging Obamacare?” The gist of the piece is that Trump has repeatedly said, and may really believe, that it would be better politically if Obamacare collapsed under its own weight. The author also argues Trump is now in a position to have a direct impact on how the law is doing. All of that seems reasonable, but at some point, the author tries to argue Obamacare really hasn’t been doing so bad until now…or something. It’s hard to tell what the author is arguing because things get very confused:
To understand what’s going on, it’s important to understand that only a small slice of what Trump calls “the very, very failed and failing Obamacare law” looks like it might break. Overall, the law has extended coverage to 20 million uninsured Americans, offered new protections for insured Americans and reined in the growth of health care costs. The vast majority of Americans are still insured through their employers, Medicare or Medicaid and most of them say they’re satisfied with their coverage. Obamacare’s high-profile problems—most notably fleeing insurers and rising premiums—are mostly problems for the 6 percent of Americans who buy insurance in the open market, especially the small fraction (equivalent to Idaho’s population) who buy it on Obamacare exchanges without Obamacare subsidies.
This paragraph opens by saying only “a small slice” of Obamacare might break. Which slice of Obamacare are we talking about? The author never answers that question. Instead, he shifts to a discussion of Medicare, Medicaid, and people who get insurance through their employer. Obamacare, we’re told, only represents about 6% of Americans.
What the author has done is demonstrate (correctly) that Obamacare is a small slice of the overall insurance market. That’s fair enough but it’s not the same as saying a “small slice” of Obamacare might fail. And it’s not much of an argument to claim that Obamacare hasn’t failed the people who aren’t using it.
That’s not the only problem with this paragraph. At the end, the author says Obamacare’s problems only impact 6% of Americans, “especially the small fraction (equivalent to Idaho’s population) who buy it on Obamacare exchanges without Obamacare subsidies.” The claim being made here, that big premium hikes only impact a small percentage of Obamacare customers, is the same misleading claim Obamacare supporters have been making for months if not years.
It’s true that 85% of people buying Obamacare plans on the exchanges get subsidies, but as I’ve pointed out many times that overlooks the millions of people who buy their Obamacare plans off the exchange and who get no subsidies. The NY Times just published a graphic this week showing that about half the people buying Obamacare plans, or 3% of all Americans, don’t get subsidies. So big premium hikes are a problem not for “a small fraction” of Obamacare customers but for about half of them.
There are more problems in this article which make me question whether it was written to be intentionally misleading. For instance:
The most damaging threat to Obamacare right now is the severe uncertainty about whether it will survive and in what form. This is an ironic problem, since “job-killing uncertainty” was a leading Republican argument against the original passage of the Affordable Care Act. But it’s a real problem. It’s hard for a profit-minded insurer to commit to a market that might not exist in the long run or even next year. Insurers have raked in cash in the employer-sponsored market, but while Florida Blue, Molina Healthcare and a few other plans have made money on Obamacare’s exchanges, they’re a higher-risk, lower-reward business, especially now that the president of the United States keeps promising to get rid of them.
The author is citing Molina Healthcare as an Obamacare exchange success story and suggesting that, in the future, their success will be threatened by President Trump badmouthing the law. There’s just one problem. Last month Molina healthcare announced a $110 million loss for 2016. Here’s how it was reported at Politico:
Molina — which had expected a $60 million profit on the exchanges for 2016 — reported a $110 million loss on Wednesday, and will assess ongoing participation at a later date. “There are simply too many unknowns with the marketplace program to commit to our participation beyond 2017,” said CEO Mario Molina.
Molina is no longer an Obamacare success story which really undercuts the author’s premise that the market has been fine for some insurers. Also, the company’s losses extend to all of 2016, meaning most of them happened well before Trump was elected in November.
Finally, it’s worth noting that the article mentions the possibility of a “death spiral” a couple of times but only to deny Obamacare has entered one. There is no mention of Aetna CEO Mark Bertolini’s comment last month that the law is already in a “death spiral.” If you want to say the jury is out on that claim, fair enough. But why would you omit a statement like this by one of the country’s leading insurance CEOs unless you are trying to make the picture look rosier than it is?
The bottom line here, as the final enrollment numbers released today demonstrate, is that Obamacare is in trouble. Trump could certainly hasten its decline but it’s a decline that was already happening well before he won the election.