To: Detroit/Seattle Workers' Voice mailing list
October 30, 2017
RE: Trump's many-sided war vs health care
Republicans have been trying to repeal and replace Obamacare since Trump took office, but they have failed miserably. Mass resistance exploded last summer as it finally became clear to everyone that the Republicans' proposed legislation would decimate health care for tens of millions. Republican congressmen had to face angry voters at their townhall meetings, and congressional hearings on health care were jammed with similar outraged constituents. During the hearings on the Graham-Cassidy bill, the Republicans' last attempt, police were employed to drag away disabled people -- people who were in danger of losing the health care they needed to stay alive. This mass resistance had an effect, as moderate Republicans like Susan Collins (R-ME) decided not to support Republican bills. At the same time, the extreme budget hawks of the Republicans' Freedom Caucus declined to support the bills because in their view the bills did not go far enough in slashing health care spending. With the Republican Party splitting right, left and center, they could not get enough votes to pass any repeal-and-replace legislation.
After the collapse of congressional Republicans' latest plan, the Graham-Cassidy bill, Trump took matters into his own hands and issued two executive orders on October 16th that dealt serious blows to Obamacare. First, he issued orders to his cabinet to rewrite the rules on insurance "associations" to make it easier for small and medium companies to get around Obamacare regulations. Second, Trump cut off the so-called CSR (Cost-Sharing Reduction) payments to insurance companies. These payments allowed insurers to keep premium prices lower for some consumers, and without them premiums are certain to go up for millions of people. The combined effect of Trump's orders is producing chaos in the health care markets; some companies are simply dropping out of the exchanges, while others are moving to charge higher premiums to insure themselves against loss. Trump promised "great health care", but what he's bringing about instead is giant costs and many people losing their insurance.
The aim of Trump's first executive order is to make it easier for small and medium companies to form "associations" that can buy special types of health care plans. "Associations" are set up by small and medium sized companies for the purpose of getting rates comparable to those of large corporations. These insurance associations have existed under Obamacare; but they were subject to much the same regulation as that of the large corporations. So for example they were required to handle insurance policies that provided all-round coverage and whose policies had to keep premium costs equal for males and females, healthy and those with pre-existing conditions, etc. New rules for the associations have not yet been written, but the aim of Trump's directive is to loosen regulations and make cheaper insurance available to companies, thereby forcing employees into buying shoddy insurance.
Employers would be exempt from the requirement that they offer employees Obamacare-type plans, so employees would be forced into accepting cheap plans with scanty coverage. For example, such plans might not offer pregnancy coverage, abortion or contraception coverage, or pre-existing conditions. But this is exactly what made Obamacare regulations necessary in the first place: shoddy insurance plans that screwed over people at the worst possible time in their lives. Health care reform was a widespread demand back in 2009, when Obamacare became law, and though its deficiencies were glaring from the beginning, it did bring about some positive changes such as adding 20 million people to the insurance rolls. But Trump doesn't care; he aims to undermine and kill Obamacare even if it means the bankruptcy, illness and death of many people.
Trump's second executive order halted the payment of CSR money to health insurance companies immediately. Under Obamacare, CSR subsidies were provided to consumers who purchased a silver plan (the cheapest and most common plan) on one of the Obamacare exchanges. These subsidies were for consumers with an income above the federal poverty line (FPL) but less than two-and-a-half times the FPL. Silver plans have lower premiums than the gold or platinum plans, but they also cover less and require consumers to pay higher out-of-pocket costs for deductibles, copays, etc. The CSR subsidies allowed people with these plans to recoup a large share of their out-of-pocket expenses. The amount of the subsidy depends on the income of the recipient; the subsidy is higher for those with lower incomes, up to 94% of out-of-pocket costs. Even those with relatively higher incomes -- up to 250% of FPL -- still receive a subsidy of 73%. With federal money for CSRs cut off, insurance companies will still be required to provide the subsidy for their silver plan subscribers with incomes less than 250% of FPL. But insurers will be allowed to finance the payment of these subsidies by increasing premiums for consumers whose income is over 400% of FPL. These are people who do not qualify for any subsidy. But this amounts to several million people who can expect to face much higher insurance premiums very soon. This will be a major cause of the increase in health care premiums in 2018, and it is solely due to Trump's action.
In issuing this order Trump combined it with a lot of demagogy about the high profits of the insurance companies, which is all true; but you don't see Trump proposing an excess-profits tax on them or regulating the prices they charge. No, what he proposes instead is screwing insurance consumers who now will find it impossible to find an affordable policy. Those companies that stay in the exchanges are expected to raise their premiums by an average 23% as a result. Speaking to the press, Trump could hardly contain his glee at the prospect of sabotaging Obamacare; the fact that he'll do it by destroying people's lives doesn't matter to him.
Trump issued his executive orders after Republicans failed in their latest attempt to pass repeal-and-replace legislation in the Senate. This was the Graham-Cassidy bill, the basic idea of which was to convert federal spending on Medicaid and the Obamacare exchanges -- spending which was due to rise quickly as more and more people qualified for these programs -- into block grants to the states. These grants would be strictly limited in increase to the rate of inflation. Then it would be up to each state to devise its own health insurance program and to divide up the federal block grant as it saw fit.
Conservatives in Congress are horrified at the rising costs of Obamacare as more and more people sign up for Medicaid and for insurance offered on the exchanges. They think it's terrible that more and more poor people are getting insurance and getting medical care for the first time in their lives. Their rich donors are complaining loudly about the taxes they pay to support Obamacare, which came with new taxes on the incomes of wealthy people as well as some new taxes on medical equipment. Graham-Cassidy would have completely stopped the open-ended commitment of the federal government to pay a share of people's medical bills and would have closed the Obamacare exchanges. Ending Obamacare would also mean wiping out federal regulation of insurance companies. They would no longer be required to offer basic coverage of things like pre-existing conditions; that would be up to each state. This would probably mean a return to the old days of shady companies offering shoddy policies. Employers would be freed from penalties for not offering insurance to their employees.
To get their repeal-and-replace legislation passed in the Senate under budget reconciliation rules, Republicans had to get it passed by September 30th. But the Republicans are in disarray, and Graham-Cassidy was under fire from both right-wing and moderate Republicans. Senate leaders were not able to cobble together 50 Senators to vote for the bill, so they cancelled the vote. But Graham-Cassidy remains the blueprint for Republican plans. The bill had the support of major Republican leaders like Mitch McConnell and Paul Ryan, and Trump has also endorsed the idea of a conversion to capped block grants to the states. Once they finish their present plans to "reform" taxes, perhaps as early as December, Republicans will return to their health care schemes, and something like Graham-Cassidy will be in the forefront.
Republicans can't expect to gain popular support for something like Graham-Cassidy. Scrapping Medicaid the way that bill did would be a disaster for health care, since Medicaid currently pays for 49% of all births and 64% of all nursing home residents' bills. Pretty much the entire medical sector -- groups representing doctors, nurses, hospitals, and insurance companies -- denounced the bill. Some Republican Senators themselves called it a bad bill while at the same time promising to vote for it. Why? Republicans' rich donors call the tune, and they are demanding that Republicans in Congress live up to their pledge to repeal Obamacare.
Meanwhile Trump is doing what he can by executive order to undermine and destroy Obamacare. Another of his recent executive orders will allow employers to avoid paying for insurance coverage of treatments and procedures to which they have "moral" objections. Obamacare already provided for employers to make "religious" objections to procedures such as abortion, but Trump's new regulation allows employers to expand this loophole.
Trump is also cutting the budget for Obamacare advertising and assistance to people who want to learn about the exchanges and how to sign up for insurance. This activity actually played a big role in expanding Medicaid and providing people with insurance, but now Trump is sabotaging it.
Republicans in Congress are also doing what they can to sabotage federally funded health care, even if they can't pass repeal-and-replace. The CHIP program is currently up for refunding by Congress, and Congressional leaders are dragging their feet on it. CHIP (Children's Health Insurance Program) provides health insurance to children whose families have an income too high for them to qualify for Medicaid but who don't have insurance otherwise. Together with the expansion of Medicaid, CHIP has been phenomenally successful in reducing the number of uninsured children -- from 15% of children 20 years ago to 5% today. Nearly 9 million children are now insured by CHIP, but its current funding runs out at the end of 2017, and already some states are nearing the end of their money for the program. Congress was supposed to act on renewing it (about $14 billion per year) by September 30th, but it wasn't even scheduled for a vote. Republican leaders are now too busy with tax "reform" to bother their heads about children's health care, so the program may languish for lack of money next year.
Trump's actions are already having some of his desired effects: some insurers have begun pulling out of the Obamacare exchanges, leaving consumers with little or no choices for insurance. The Congressional Budget Office predicts that the number of insured will drop by about 15 million in the next couple years due to Trump's executive actions. If something like Graham-Cassidy passes, that number is expected to reach 30 million fewer insured by 2025.
Although the minority party, Democrats in Congress have been defending Obamacare by refusing to consider any repeal-and-replace legislation. At the same time they've maintained that they're open to improving Obamacare, but they've steadfastly refused to get into specifics about Obamacare's defects -- its high premiums, co-pays and deductibles which continue to rise; the fact that 29 million people still remain uninsured and millions more are under-insured; and its coddling of insurance companies, health providers and Big Pharma. Some left-wing Democrats such as Bernie Sanders and Elizabeth Warren have proposed moving on from Obamacare to a single-payer system that would attack these defects, but Democratic leaders in Congress have refused to consider single-payer, just as Obama always did.
Aware of their party's disunity on health care, some Republicans have proposed reaching out to Democrats to try and craft health-care legislation that some Democrats could vote for. This has received a favorable response from some Democrats such as Senator Amy Klobuchar (D-MN). Senator Lamar Alexander (R-TN) even put together a bill for a temporary fix for CSR payments and got some Democrats such as Sen. Patty Murray (D-WA) to support it. The bill is getting nowhere, however, as Republican leaders McConnell and Ryan won't even schedule debate on it. So even though some Republicans in Congress have made attempts to appear reasonable and bipartisan, in the main their party remains committed to a hardcore repeal-and-replace position, even though they can't agree on the details.
Meanwhile Trump continues his hammer-and-tongs method of negotiation. Trump openly announced that by sabotaging Obamacare he intended to force Democrats to come around and beg for a bipartisan solution. They would then be forced to accept Graham-Cassidy or something like it. Trump also deep-sixed the Murray-Alexander bill, making it plain in his daily tweets he would not accept it.
When it comes to health care, there isn't going to be anything like a fix to the present mess until a comprehensive national health care system is worked out, a system with a single national health insurance plan. This won't be a socialist system, as Republicans cry hysterically, but it will involve a restructuring of health care and the practical elimination of private health insurers. By eliminating layers of bureaucracy the cost of health care could be made to come down substantially. By taking in everyone in the U.S. in one big insurance pool, the costs of insurance could be reduced, and all the present arguments about who to include, whether to cover pre-existing conditions, etc. would be made moot. There would be no uninsured or under-insured, and no discrimination between classes (though some discrepancies, like in rural health care, would still have to be dealt with).
Trump's reactionary moves -- his executive actions, his tweets, etc. -- are attempts to distract people from paying attention to these basic truths and keeping them off balance so they don't push ahead with progressive reforms, going beyond Obamacare instead of going backward. Working people need to pursue their own progressive agenda while at the same time blocking Trump and the Republicans' reactionary program. The people who showed up at townhalls and Congressional hearings gave good examples of how to stand up to the reactionaries and block their attempts to dismantle health care. We support these mass actions and call on people to continue them, while at the same time calling on the working people to organize in support of a single-payer system.
Fight Trump's attacks on health care!
Health care for all!
by Pete Brown, Detroit Workers'
Back to main
how to order CV,
Posted on November 4,