Rumors about this have been swirling for months but the moment of truth is nearly here. Tomorrow’s the deadline for the White House to decide if it wants to continue to fight the lawsuit filed by the House of Representatives against the Obama administration over O-Care’s cost-sharing subsidies. The House claims that it never appropriated money for the subsidies; Obama chose to spend the money anyway. (The subsidies reimburse insurers for reducing the deductibles and out-of-pocket expenses for some lower-income ObamaCare consumers.) If Trump sides with the House and opts to cancel the subsidies, the lawsuit will be moot and insurers will suddenly be on the hook for billions in extra costs this year that they didn’t anticipate. That means chaos on the ObamaCare exchanges — some insurers will jack premiums way, way up to cover the shortfall from the missing subsidies, others will drop out of the exchanges altogether. Trump is betting that as chaos ensues and O-Care goes belly up, panicky Democrats will come running to the White House to make a deal with Republicans on a new health-insurance system.
But what if he loses that bet?
President Donald Trump has told advisers he wants to end payments of key Obamacare subsidies, a move that could send the health law’s insurance markets into a tailspin, according to several sources familiar with the conversations.
Many advisers oppose the move because they worry it would backfire politically if people lose their insurance or see huge premium spikes and blame the White House, the sources said. Trump has said that the bold move could force Congressional Democrats to the table to negotiate an Obamacare replacement…
Trump told aides in a Tuesday Oval Office meeting that he wants to end the payments to insurers because he doesn’t gain anything by continuing them, according to a senior White House adviser. “Why the hell would we?” he asked about continuing the payments, according to the adviser. Trump added that if Congress wants the subsidies, lawmakers would find a way to pay for them, the adviser said.
If he pulls the plug on subsidies and Democrats don’t come running, it would be the third major miscalculation he’s made about their intentions in the last few weeks. Reportedly he thought Democrats would back him up on firing Comey due to liberal rage over the letter Comey sent about Emailgate just before the election. Wrong. Shortlisting Joe Lieberman as Comey’s replacement also appears to be aimed at finding bipartisan consensus, on the theory that Democrats will be likely to support a fellow Democrat for the position. Wrong. Now he thinks that Schumer will blink and rush to compromise with the White House if Trump gives a hard shove to the already teetering O-Care exchanges. Wrong: The left would go berserk if Schumer rewarded Trump for delivering a death blow to ObamaCare by agreeing under pressure to help craft a replacement system. Senate Democrats will compromise only if there’s good reason to believe, as Trump apparently does, that their party rather than the GOP will get most of the blame for ObamaCare’s failure. A Kaiser poll from April suggested the opposite, though:
If anything, canceling the subsidies now would be a PR godsend for Schumer. So long as O-Care is completely intact, its failures are a wholly Democratic problem. The best Schumer and Pelosi can do to counter them is to argue that because Republicans control the government, it’s ultimately their fault for not doing more to prevent the law’s collapse. Once Trump starts pulling pieces out of the swaying Jenga tower, though, the Democratic case becomes easier — the law wouldn’t have collapsed if Trump hadn’t sabotaged it, they’ll claim. And the subsidies wouldn’t be the first Jenga piece that’s been pulled. By having HHS loosen enforcement of the individual mandate before a replacement system is in place, the White House is threatening insurers’ revenue in a second way. That move is comparatively simple for Republicans to defend, as the mandate is broadly unpopular and has been a target of small-government conservatives for nearly a decade. Cutting the subsidies isn’t as easy to explain away, especially for a populist president who’s supposed to be looking out for lower-income Americans. According to a Kaiser study published late last month, premiums on average would rise 19 percent if the subsidies go poof.
Plus, why would Democrats race to compromise with a president whose job approval has now slipped below 40 percent after 10 days of Russia/Comey/Flynn bombshells going off? Trump can’t seriously believe tanking the subsidies would bring them to the table under those circumstances. Which makes me think maybe the story quoted above is just a bluff — aimed not at Democrats but at Republicans. Congress could solve this problem for him, after all, by passing a bill that appropriates $7 billion to keep the subsidies going. Ryan and McConnell are nervous about doing that, though, since they don’t enjoy the same fervent loyalty among the base that Trump does. If they cave and give Trump the money, populists and conservatives will howl that they’re big-government sellouts who are propping up ObamaCare. If instead Trump continues to fight the House lawsuit and funds the subsidies himself, there’ll be some grumbling on the right for a day and then everyone will move on. It may be that Trump, by threatening to cancel the subsidies, is really just trying to frighten Ryan and McConnell into taking the hit on this instead of him, especially knowing that the party is already worried about political damage from the Russiagate stuff and doesn’t want to sustain more on health care. We’ll find out tomorrow.