Trump: I Can End Obamacare Health Insurer Subsidies ‘Anytime I Want’
Policy + Politics

Trump: I Can End Obamacare Health Insurer Subsidies ‘Anytime I Want’

Joshua Roberts

Last Thursday, just a day after House Republicans passed a bill to overhaul the U.S. health care system, President Trump sat down with reporters from The Economist for a wide-ranging interview on his economic policies. The recently released transcript contains numerous eyebrow-raising statements and claims from the president -- including his insistence that he personally invented an economic theory that has been around since before the Great Depression. But one element of it could very well roil the already turbulent market for individual health insurance plans.

Related: Why Time Is Running Out for the Republicans to Repeal Obamacare

Near the end of the interview, Trump was asked whether he would support a border adjustment tax, such as the one that has been proposed by House Republicans. Somehow, he wound up in a discursive monologue on the problems of the Affordable Care Act, which Republicans hope to replace with their American Health Care Plan.

A key element of the ACA is a system set up to compensate insurance companies for charging lower-income Americans below-market-rate premiums for health care and for offering coverage to sick people who would have been denied coverage in the past. Part of that system is the payment of cost-sharing reduction subsidies (CSRs).

Whether the White House would continue paying CSRs has been a huge question for insurers, who say that the elimination of other subsidies promised by the law has already made it difficult for them to profitably serve people in the individual health insurance market. Some, citing the uncertainty of the payments, have pulled out of the ACA’s health insurance exchanges altogether.

Related: What If the GOP Can’t Get a Health Law Passed?

In the Economist interview, though, Trump went further than he or anyone in his administration has before, suggesting that he might eliminate CSR payments on a whim, and then indicating that he plans to do so at some point.

Trump: You know when people say, “Oh, Obamacare is so wonderful,” there is no Obamacare, it’s dead. Plus we’re subsidising it and we don’t have to subsidise it. You know if I ever stop wanting to pay the subsidies, which I will.

The Economist: You’d pull the plug on that? If this bill doesn’t go through you’d stop those subsidies?

Trump: No, this bill only gives them one month. They don’t realize that, that’s another thing. Good point. This bill gives them one month, it gave, you know the subsidy …

The Economist: The continuation of the subsidy?

Trump: The subsidy to the insurance companies, yes. Anytime I want because actually …

The Economist: But my question is if the bill doesn’t pass …

Trump: In actuality Congress has to approve it.

Republicans have long held that the CSR payments are illegal on their face, because there is no specific language in the law appropriating money for them. An ongoing lawsuit filed by House Republicans seeks to have them blocked, and a judge ruled in their favor in May 2016. The Obama administration defended the CSR payments in court, and so far the Trump administration has not changed that policy. But there is nothing stopping Trump from ordering the Department of Justice not to defend the payments and unilaterally ending them.

Trump went on to say that if the bill doesn’t get through the Senate, he would continue to use the CSR payments as a bargaining chip in his negotiations with Democrats. But it was his suggestion that the continuation of payments is subject to his mood that is likely to echo loudest for insurers who are already backing away from the ACA exchanges in a hurry.

Related: 6 Ways the Republican Health Plan Could Affect Employer Insurance

At another point of the interview, Trump described how insurance is “supposed to work.”

“Insurance is, you’re 20 years old, you just graduated from college, and you start paying $15 a month for the rest of your life and by the time you’re 70, and you really need it, you’re still paying the same amount and that’s really insurance,” he said.

That goes directly against the substance of the bill that he has been celebrating, which specifically allows insurers to charge older people much more for their coverage -- five times as much -- than they charge younger people. It also completely contradicts House Republicans, who have railed against the supposed injustice of forcing young people to subsidize the coverage of older, sicker people.

Other elements of the interview were puzzling as well, but none were more cringe-inducing than when Trump began to discuss his views on economic stimulus. Trump was asked if it was acceptable for his administration’s plan for tax reform to increase the federal deficit.

Trump: It is OK, because it won’t increase it for long. You may have two years where you’ll … you understand the expression “prime the pump”?

The Economist: Yes.

Trump: We have to prime the pump.

The Economist: It’s very Keynesian.

Trump: We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?

The Economist: Priming the pump?

Trump: Yeah, have you heard it?

The Economist: Yes.

Trump: Have you heard that expression used before? Because I haven’t heard it. I mean, I just … I came up with it a couple of days ago and I thought it was good.

“Pump-priming” as a means of stimulating economic growth, as the interviewer plainly knew, is a concept that has been around for generations. It is associated with British economist John Maynard Keynes, who strongly advocated it, with mixed success, as a remedy for the Great Depression.

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