Fact-Checking the President: Has He Saved or Sabotaged Obamacare?

WASHINGTON — Even as President Donald Trump boasts that he has “eliminated the core of Obamacare,” his health secretary is taking credit for making the law work better than ever.

What gives?

Alex Azar, secretary of health and human services, says the president’s actions tell the real story. Trump took decisive steps “to stabilize insurance markets and expand choices for American consumers,” Azar said in a recent speech in Nashville, Tennessee. “The president who was supposedly trying to sabotage the Affordable Care Act has proven better at managing it than the president who wrote the law.”

The administration is making these claims as polls show that Democratic candidates for Congress are having some success in attacking Republicans’ record on health care. Open enrollment under the Affordable Care Act starts on Nov. 1. Voters go to the polls five days later.

A review of the administration’s assertions suggests that some are valid while others are sheer hooey.

— Stabilizing Insurance Premiums

“This year alone we have successfully lowered your health insurance premiums in the state of Tennessee by 26 percent,” Trump said at a rally in Johnson City, Tennessee, this past week.

“For the very first time under the Affordable Care Act, the premium for a benchmark federal exchange plan is projected to actually drop,” said Azar, who is in charge of the federal insurance marketplace.

Insurance markets stabilized after Trump tried to upend them. That does not necessarily mean that they are more stable because of his policies.

Insurers in some states, including Maryland, Minnesota, New Hampshire, New Jersey, Tennessee and Texas, have said they intend to charge lower rates in 2019. Price increases this year were exceptionally large because insurers developed the rates in the spring of 2017 in a sea of uncertainty: Republicans in Congress were determined to repeal the Affordable Care Act, and no one could be sure what might replace it. Trump cut off a crucial source of income for insurers — “cost-sharing” subsidy payments — in October 2017, just as state officials were approving final rates for 2018.

Trump does not sound like a man trying to stabilize the Affordable Care Act marketplace. He boasted Thursday that he had “mostly obliterated Obamacare.” He said in June that he had “essentially gutted” the law. In July last year, he said his strategy was to “let Obamacare implode.” In October last year, he declared: “Obamacare is finished. It’s dead. It’s gone.”

A major reason for the moderation in prices is that “insurers overshot with their premium increases in the last couple of years,” said Larry Levitt, a senior vice president of the Kaiser Family Foundation. In other words, insurers, who underestimated their costs and often lost money in the first years under the Affordable Care Act, made corrections — and, in some cases, may have overcorrected — in the last year or two.

“Revenues caught up with the underlying risk of the population,” said Kurt J. Wrobel, chief actuary of the Geisinger Health Plan in Pennsylvania. “With more experience, we can better estimate the expected cost of health claims.”

Charles Gaba, a health care analyst who meticulously tracks rate changes, said unsubsidized premiums would rise about 3 percent on average next year, compared with increases averaging about 27 percent this year. Actions by the administration, he said, were responsible for at least half the increase this year.

Insurers built a cushion into this year’s rates to allow for political, legislative and regulatory uncertainty. But “the uncertainty has decreased,” said Julie Mix McPeak, Tennessee insurance commissioner, who is president of the National Association of Insurance Commissioners.

The outlook for 2019 is clearer. Consumers will no longer be penalized for going without insurance. But tax credits will still be available to reduce premiums for those with low or moderate incomes.

— Sabotage?

“Working families are paying the price for Republicans’ relentless effort to sabotage their health care and drive up insurance premiums,” House Democratic leader Nancy Pelosi said on Friday.

Rep. Gene Green, D-Texas, said Republicans had “taken every action possible to undermine and sabotage the Affordable Care Act.” And Sen. Robert Menendez, D-N.J., said, “Every act of sabotage has contributed to soaring health care premiums, fewer choices for consumers, and millions of Americans losing their coverage under this president’s watch.”

The administration has sent mixed signals. The White House, the Department of Health and Human Services and the Justice Department appear to have their own priorities.

“This administration is not monolithic,” said Stan Dorn, a senior fellow at Families USA, a liberal-leaning research and advocacy group. “Different people have different perspectives and goals.”

As an example of sabotage, critics cite the administration’s refusal to defend crucial provisions of the Affordable Care Act that protect consumers with pre-existing medical conditions. The administration told a federal court in June that these provisions should be invalidated because they were part of an unconstitutional scheme that required most Americans to carry health insurance.

In August, a coalition of four cities — Columbus, Ohio; Baltimore; Cincinnati; and Chicago — filed a lawsuit accusing the president of violating his duty under the Constitution to “take care that the laws be faithfully executed.”

They noted the administration had slashed funds for groups that help people sign up for insurance; worked with Congress to repeal the individual mandate; and issued new rules to encourage the sale of health plans that do not provide the consumer protections and benefits required by the 2010 health law.

But the Affordable Care Act is proving to be resilient. Trump’s actions have not led to the collapse of the law, which his critics feared and he hoped for. Insurance exchanges have not imploded.

And federal officials have occasionally defended the law. The administration rejected Idaho’s plan to allow the sale of stripped-down, low-cost health insurance that violates the Affordable Care Act. And the administration has given its blessing to a rate-setting technique that protects consumers with low or moderate incomes from steep increases in premiums, at least through 2019.

— Reinsurance

“President Trump has approved a number of state reinsurance plans, an efficient solution that helps states pay for the sickest patients, allowing insurers to keep premiums lower,” Azar said.

The Trump administration has granted waivers to at least seven states allowing them to set up programs that help pay the largest claims with a combination of state and federal funds. These programs are known as reinsurance — insurance for insurers — and officials in Alaska and Minnesota say they have been highly effective.

In Maryland, insurers initially requested rate increases averaging 30 percent for 2019. They amended their requests to reflect the impact of a state reinsurance program approved in August by the Trump administration. As a result, rates will fall next year by an average of 13 percent.

“For the first time since the Affordable Care Act went into effect, individual insurance rates in Maryland will go down instead of up,” said Gov. Larry Hogan, a Republican.

— Risk Adjustment

“When a court struck down an Obama administration regulation regarding another type of payment to insurers,” Azar said, “it was President Trump who issued an emergency regulation to fill the void.”

Azar was referring to the risk adjustment program, which aims to stabilize insurance markets by redistributing money from health plans with healthier customers to those that enroll sicker people.

In February, a federal judge in New Mexico struck down an Obama administration rule after finding that the formula used to calculate the payments was flawed. The Trump administration announced July 7 that it would stop making the risk adjustment payments.

Insurers, consumer groups and members of Congress from both parties protested, saying the action would drive up premiums and cause chaos in insurance markets.

The Trump administration backtracked and issued a new regulation to resume the payments using the same formula.

“The new rule is virtually the same as the old rule,” said Dr. Martin E. Hickey, founder of New Mexico Health Connections, a nonprofit insurer that successfully challenged the first rule and has filed a lawsuit challenging the new rule.

So it is a stretch for Azar to boast that the Trump administration is filling the void.

— Pre-existing Condition Protections

“I will always fight for and always protect patients with pre-existing conditions,” Trump said at a rally in West Virginia on Sept. 29. “On pre-existing conditions,” he said two days later in Tennessee, “a lot of people think it’s not a very Republican thing. It is now, and it has been for me. I want to take care of people with pre-existing conditions.”

And a crowd in Mississippi applauded Tuesday when the president declared, “Pre-existing conditions will always be taken care of by us.”

Trump spent much of last year trying to persuade Congress to repeal the Affordable Care Act, the main source of protections for people with pre-existing conditions. He supported numerous Republican proposals that would have rolled back or weakened the protections.

He celebrated when the House passed a bill allowing states to obtain waivers from federal insurance standards. Under such waivers, the Congressional Budget Office said, people with pre-existing conditions could have faced “extremely high premiums.”

In June, the administration joined an attack on the Affordable Care Act by 20 states and urged a federal court in Texas to throw out popular provisions of the law that protect sick people from being denied insurance or charged higher rates. Attorney General Jeff Sessions said the Justice Department was taking this position “with the approval of the president.”

With a new rule issued in August, Trump has also opened the door to the sale of many more short-term insurance plans that explicitly exclude coverage of pre-existing conditions. “A pregnancy existing on the effective date of coverage will also be considered a pre-existing condition,” say brochures for short-term plans offered by UnitedHealth and other companies.