The Breakdown<\/strong>\u00a0know well!\u2014is the expiration of a temporary boost in the program\u2019s\u00a0subsidies, which Democrats have been pushing to renew.<\/p>\nRepublicans have refused to go along, because most see any expansion of health care as sacrilege, especially if it\u2019s connected to \u201cObamacare.\u201d GOP leaders refused to consider the subsidy expansion even when Democrats shut down the government over it, and then declared victory when a December Senate vote on extension failed.<\/p>\n
But things haven\u2019t gone so well for the Republicans since.\u00a0All\u00a0over\u00a0the\u00a0country, GOP lawmakers are hearing from constituents whose\u00a0premiums\u00a0have\u00a0gone up\u2014sometimes by hundreds or thousands of dollars a year, and in\u00a0extreme cases\u00a0by many thousands. These people are sucking up the increase, switching into cheaper plans that stick them with higher copays and deductibles, or they are dropping coverage altogether.<\/p>\n
That pressure was enough to get legislation extending the subsidies out of the House, where seventeen Republicans broke ranks and voted with the Democrats. And while the Senate last week rejected that proposal, a bipartisan group has been hard at work, trying to find\u00a0some kind of compromise that can pass\u00a0(and then go back to the House for passage there).<\/p>\n
Negotiations have since\u00a0stalled, making Thursday\u2019s plan the latest in a series of chances for Trump to weigh in strongly on what he wants. And at first blush it looked like Trump might do just that, finally, because he endorsed two key ideas that Republicans have been discussing in the debate over extending the subsidies.<\/p>\n
One\u2014which has gotten a fair amount of attention\u2014would take at least some of the money from those extra subsidies and put them instead in\u00a0tax-favored spending accounts\u00a0that people can use on health care. Republicans like this because, they argue, it gives more people control over their spending, unleashing competition that will bring down prices. Trump in his endorsement even picked up on their\u00a0rallying cry, which is that (in Trump\u2019s words) it will \u201csend the money directly to the American people\u201d rather to big insurance companies.<\/p>\n
The other idea Trump endorsed is a call to provide funding for something called \u201ccost-sharing reductions,\u201d which are part of a particularly convoluted mechanism within the Affordable Care Act that reduces out-of-pocket costs for lower-income buyers. Trump\u2019s fact sheet promotes this step as both lowering premiums for the standard Affordable Care Act plan while saving the federal government $36 billion.<\/p>\n
Making health care cheaper for people while also saving people money might sound too good to be true. In this case, it is. Because of the law\u2019s complex formula for calculating assistance, \u201cfunding\u201d this feature designed to lower costs would\u2014paradoxically\u2014make insurance\u00a0more expensive\u00a0for millions. In fact, the Congressional Budget Office\u00a0predicts\u00a0the feature would lead several hundred thousand people to drop coverage altogether.<\/p>\n
The effects of diverting subsidy money into health savings accounts would depend on exactly how it\u2019s done. But the version that excites most Republicans\u2014the one being pushed by Bill Cassidy, the senator from Louisiana\u2014would come with a really important condition. The only way to get the extra money would be to enroll in a plan with ultra-high copays and deductibles. The math would\u00a0work\u00a0out\u00a0poorly\u00a0for lots of people, especially those with serious medical needs because the extra money they\u2019d get would not be enough to offset the higher out-of-pocket costs.<\/p>\n
The idea is toxic with Democrats. So is funding the cost-sharing reductions. A serious push to include them in legislation would diminish whatever slim chances exist for a compromise.<\/p>\n
But\u2014and this arguably was the weirdest part of Trump\u2019s announcement\u2014the endorsement of these ideas was conspicuously half-hearted. During a briefing call with reporters on Thursday, a White House official speaking anonymously on behalf of the administration said Trump\u2019s proposal \u201cdoes not specifically address those bipartisan congressional negotiations that are going on.\u201d<\/p>\n
It\u2019s possible Trump and his advisers were making a conscious, strategic choice not to slam the door on anything that might come out of the bipartisan talks on Capitol Hill. But staying out of the process isn\u2019t going to get a deal done, either, because getting to sixty votes in the Senate would almost certainly require pressure on Republicans hesitant to support any extension of the subsidies\u2014if not because of the extra government spending, then because of a demand from some conservatives (a demand unacceptable to most Democrats) that legislation\u00a0roll back abortion coverage.<\/p>\n
And Trump, who earlier in January made\u00a0comments\u00a0suggesting he was ready to push Republicans on that front, has said nothing since.<\/p>\n
THE AMBIVALENCE ABOUT what happens to the Affordable Care Act subsidies is, according to the White House, a deliberate attempt to move the conversation beyond the debate over the law itself.<\/p>\n
In fact, when\u00a0Washington Post<\/em>\u00a0White House correspondent (and longtime,\u00a0award-winning\u00a0health care writer) Dan Diamond\u00a0tweeted\u00a0that Trump\u2019s plan was a \u201cgrab bag\u201d of familiar proposals that \u201cfeel far short\u201d of the Affordable Care Act replacement he\u2019s long promised, a White House spokesperson\u00a0responded\u00a0that Trump\u2019s plan was much broader\u2014that it was designed to lower costs for all Americans, not just the 7 percent who get coverage through the Affordable Care Act.<\/p>\n\u201cThis is comprehensive, commonsense reform that some Fake News clowns are struggling to comprehend,\u201d wrote White House Deputy Press Secretary Kush Desai.<\/p>\n
Ambition was also a big theme of the White House briefing call, which was led by Mehmet Oz\u2014a.k.a., Dr. Oz, the celebrity physician and failed Senate candidate who is now serving in the Trump administration. \u201cThe real question,\u201d said Oz, who now oversees Medicare, Medicaid and the Affordable Care Act, \u201cis how do we get past lazy lawmaking and actually start to address the underlying problems\u2014not just throw more taxpayer money at issues, but get to the root causes of why the system right now is not really great.\u201d<\/p>\n
He\u2019s not wrong about the importance of addressing those root causes. The United States\u00a0spends more\u00a0than any other peer country on health care, and in just the last year or two there have been signs it\u2019s starting to rise more quickly than usual. This isn\u2019t because of the Affordable Care Act, as Trump and Republicans frequently suggest. It\u2019s because of a combination of underlying factors, including everything from the power of hospital monopolies to the high cost of some new, breakthrough drugs.<\/p>\n
One way to approach that would be to get more serious about using government power to force down\u00a0drug prices, which is an issue that Trump has talked about pretty consistently since getting into politics\u2014and an area where he could find willing partners with Democrats. Trump\u2019s preferred method is to link U.S. prices to the lower prices other countries get when they negotiate directly with manufacturers, a concept known in policy circles as \u201cinternational reference pricing.\u201d<\/p>\n
Trump calls it giving the United States \u201cMost Favored Nation\u201d status on drug prices\u2014which, credit where due, is pretty good marketing. And Trump has personally negotiated a series of agreements with drug manufacturers that, he says, will bring down prices. But it\u2019s hard to know whether those deals will actually produce real\u00a0savings, or what he\u00a0promised\u00a0them in return. And whatever the agreements\u2019 short-term impact, they are purely voluntary. The only way to have a significant, long-term effect on drug prices would be to pass a law putting such a mechanism in place.<\/p>\n
Here again the obstacle to such a law is congressional Republicans, who say government interference would distort markets and stifle innovation\u2014and who are generally close with the pharmaceutical industry.