The Republican Party has become one giant scam PAC. When they are out of power they boldly declare Democrat policies to be illegal and unconstitutional, yet when they get into power they continue the same policies. We’ve already seen this with the Iran treaty and Obama’s executive amnesty, which are still being recognized and enforced by this administration. Now we are facing the same dilemma with the illegal cost-sharing subsidies for Obamacare. It’s one thing to phase out harmful policies over time, but when it comes to illegal executive actions how can they continue administering them for even one day?
Obamacare’s regulations are so crippling and actuarily insolvent that the individual mandate and the open-needed subsidies given to consumers have done nothing to fix the health care problem. In fact, they have only further distorted the market and increased prices. To that end, the Obama administration, in one of the most lawless decisions of a lawless presidency, decided to create an additional layer of subsidies outside of statute to be given directly to insurers. One of those subsidies — referred to as cost-sharing reductions — reimbursed insurers for discounting co-payments and deductibles for low-income enrollees (the premiums were subsidized by the main Obamacare payouts).
The problem with this program, aside from further inflating the cost for those who aren’t subsidized, is that it’s completely unconstitutional. The Obama administration paid insurers billions of dollars outside of an appropriation from Congress. CBO projects that under current policy, this illegal program will cost $130 billion over 10 years.
Last year, in House v. Burwell, the GOP-led House sued Obama for creating his own slush fund without Congress. In a rare victory and through the prism of a legitimate exercise of judicial power — interpreting instead of nullifying a statute — Judge Rosemary Collyer sided with House Republicans in asserting that the cost-sharing subsidies were appropriated without consent of Congress.
One would expect that the minute Tom Price took over HHS, the unconstitutional subsidies would vanish. One would also expect Trump’s lawyers to immediately drop the previous administration’s appeal to the U.S. Court of Appeals for the District of Columbia Circuit regarding the constitutionality of those subsidies, right?
Not so fast.
The administration has declined to drop the appeal of the district court’s ruling, and is in fact continuing to offer the subsidies. Thus, what Republican universally regarded as unconstitutional when they were out of power, they are now administering — much like they are illegally handing out work permits to illegal aliens amnestied under Obama.
Some might suggest that Trump is in a lose-lose situation because now that Obamacare is the law of the land, even more states will be without any insurers if he shuts off the subsidies. Trump himself recognized this predicament in an interview with the Wall Street Journal. The president said that on the one hand he’d love to see the law collapse, but he fears he would be blamed for the collapse instead of the supporters of Obamacare. Even though he didn’t shut off the spigot immediately, he is entertaining the idea of threatening to suspend the cost-sharing as a means of getting the Democrats to the table.
This is a false dichotomy. The president needs to realize that there is a third option: actually repealing Obamacare and demanding that Republicans support him! As leader of the party, rather than bully conservatives into supporting Obamacare 2.0 he should demand that liberal Republicans get with the program and fully repeal the law and actually solve the health care problem. At that point, there won’t be a need for the illegal subsidies, and in fact, they would only further distort the market. Democrats will never have an incentive at this point to buy into any GOP bill. There is only one option.
Donald Trump must harness his populist appeal against big government and the health care industry by immediately suspending the kickbacks for insurers. It is hard to anticipate the actions of the private sector. But by repealing the coverage mandates of Obamacare with a reasonable transition period, and concurrently making it clear that all subsidies and kickbacks are permanently terminated, insurance companies will have no wiggle room other than to utilize the de-regulation to offer a multitude of market-based plans, including catastrophic and limited benefit plans. They would be forced to compete for consumer demand rather than have a monopoly over the small trough of regulated and subsidized plans.
His message should be unambiguous: “we will not regulate you and we will not subsidize you, go out and compete for consumer demand.” Then he should travel the country and rail against a crony socialist health care system that looks like a grocery shelf in Venezuela instead of one in America. He must demand that the liberal Republicans get onboard with full repeal of Obamacare or he risks violating one of his core campaign promises.
Unfortunately, as we are seeing with an array of domestic and foreign policy issues, New York Democrats are pushing the president in the other direction. Noted health care expert, Ivanka Trump, as well as President Kushner and Gary Cohen, are reportedly pushing to keep the subsidies, while Steve Bannon is arguing that we follow the Constitution. Liberal congressional Republicans, such as Rep. Tom Cole, R-Okla., and Sen. Lamar Alexander, R-Tenn., are also pushing for a continuation of the subsidies.
Sensing blood in the water, Democrats are now demanding that the subsidies be codified by Congress in the budget bill. Now that Democrats successfully jettisoned all conservative riders from the budget, why not go on offense and demand their priorities? After all, we can’t have a government shutdown. Now, instead of the battle lines over the budget being drawn over defunding refugee resettlement, Planned Parenthood, and the border wall, we must play defense on the cost-sharing subsidies.
Caving on principle begets more capitulation. There is no way to get around not repealing Obamacare but somehow pretending we are repealing it. The path forward is and always was very simple: full repeal of Obamacare with reasonable transition to what GOP has promised in terms of free market health care — or permanent irrelevance and humiliating electoral defeat.