How a Coalition of Small Government Conservatives Tried to “Break ObamaCare” and Won; And How Trump and Republicans are Still Trying to “Break ObamaCare”… and still “Winning”

Recent premium hikes and the lack of coverage under the ACA are partly a result of an ongoing Republican Strategy to “Break ObamaCare.” We explain.[1]

THE REPUBLICAN PLAN TO BREAK THE ACA: Put together all the other facts on this page, and it’ll become clear as day, the Republican party has a rather transparent and active strategy to break ObamaCare (the Affordable Care Act) that has been in the works since at least 2009. The idea being make the ACA look bad, to justify cutting spending, to justify tax cuts, to justify a full repeal of the ACA… the goal: “Small Government.” This strategy is the brainchild of groups like the Federalist Society and Heritage foundation (“clubs” of sorts that many GOP are a part of). To be clear, the idea is to obstruct the ACA at every turn (be it by getting less people to sign up, or by rejecting Medicaid expansion, or by killing the mandate, or by the 60+ repeal attempts). The intention isn’t to hurt people, but to “save America” from “big government.” With that said, this “strategy to break ObamaCare” is based on the idea that if America suffers enough under the ACA (or rather “Obama” care), it will result in people rejecting the Democratic Party platform on healthcare, thus allowing the GOP to pass a bill full of tax cuts like Graham-Cassidy instead of spending, taxes, and tax credits like the ACA. That may sound an overly harsh or partisan take on the matter, but before you judge our take on it, consider checking out the proofs we list below.

UPDATE FROM MARCH 2019: Trump’s DOJ just backed the lawsuit so it will continue through the appeals process. Honestly, the GOP is getting close to actually breaking ObamaCare. It took over 10 years, but it is very close to working.

UPDATE FROM Dec 2018: A Republican led lawsuit by 20 states that claimed the mandate was illegal ended in victory of the Republicans. Not only was the mandate declared illegal, but the whole ACA was declared unconstitutional. The reasoning: Without the mandate’s fee, the argument that the fee was constitutional due to having the power to tax fell apart, and that created an opening for the Texas judge to declare the ACA illegal. This will likely be appealed, but it is also a very clear story of how the Republicans are literally and out in the open trying to break the ACA using the judicial system. Remember “break” sounds harsh, but like, that is because it is. In words, it is real and happening, I’m not just hitting the panic button here. Read more about the Texas judge ruling.

UPDATE FROM JULY 2018: CMS blocked risk adjustment payments right around the time when insurers were pricing plans. This is likely to cause a large rate hike for 2019 (especially since the mandate is gone in 2019, short term plans are expanded, association health plans expanded, and repeal and replace is still on the table). UDPATE: CMS reversed the freeze and reinstated the payments after getting pushback from insurers.

UPDATE FROM 2018: Trump effectively repealed the individual mandate by executive order (the change was then made in a Trump era tax bill). Shortly after 20 states joined together in a court case that charges that without the mandate the Affordable Care Act is illegal. Trump and his administration then stepped aside and refused to defend the Affordable Care Act. If the states win their case it could undo the Affordable Care Act including key protections like preexisting conditions protections. In this way Trump’s administration would have repealed the ACA through the court system and executive branch without having to go through Congress or replace the Affordable Care Act. This is yet another example of how Republicans are still implementing their plan to break ObamaCare.

UPDATE FROM OCTOBER 2017 (TRUMP CUTS CSR PAYMENTS): Below we will tell you the story of how Trump threatening to cut Cost-Sharing Reduction (CSR) payments caused premium spike this year. For an update, as of October 12th, 2017, those payments have actually been cut. Learn more. TIP: See a study from HHS that shows that cutting CSR payments will send the healthcare economy into a death spiral and a study from the CBO on the effects of cutting Cost Sharing Reduction assistance.

UPDATE FROM OCTOBER 2017 (TRUMP SIGNS ORDER ON ASSOCIATION HEALTH PLANS, SHORT TERM COVERAGE, AND HRAS): Trump signed an order in October that expands low cost / low benefit health plans in a number of ways. The indirect result of this is that healthy customers will likely be drawn out of the existing individual and family market and business market and into lower-cost short term plans, association plans, and HRAs. There is a good chance this will cause premiums to rise in the marketplace, as those plans don’t have to offer the ACA’s benefits and thus outcompete marketplace plans with lower premiums for those without cost assistance. Meanwhile, the costs of this will likely then be absorbed by tax payers who are on the hook to subsidize the remaining marketplace plans. In order words, this order will likely draw healthy and higher income people off of “ObamaCare” and thus raise costs for those left. This one is a mixed bag, as premium relief really is needed for some classes…. but it none-the-less it fits the pattern of actions that hurt “ObamaCare” and those with lower-incomes, but help other classes. Learn more.

UPDATE FROM SEPTEMBER 2017 (OPEN ENROLLMENT HOURS LIMITED AND AD BUDGETS CUT): Trump’s HHS announced HealthCare.Gov will be close on Sunday morning and early afternoons this year, they also cut advertising and outreach budgets (with ad budgets cut by 90%), and they shortened enrollment period this year (giving people less time to enroll).

UPDATE FROM SEPTEMBER 2017 (REPUBLICANS FAIL TO FUND CHIP AND COMMUNITY HEALTH CENTERS): Congress failed to fund CHIP (the Children’s Health Insurance Program) and Community Health Centers on Sept. 30, 2017. Now 1,400 Community Health Centers and coverage 9 million children lack funding (and some states have already started filing waivers that would allow them to not have to offer CHIP). Every bill Republicans brought forth prior to the funding expiring was attached to provisions defunding public programs like Medicaid (for example, Orrin Hatch’s plan).

UPDATE FROM AUGUST 2017 (THREATS TO NOT FUND COST SHARING REDUCTION): In August, after the Republican repeal and replace plan didn’t pass, Trump began threatening to block cost sharing reduction subsidies. This is exactly the sort of obstruction this page is warning you about. That is, conscious and active attempts by Republicans to obstruct the ACA that result in costs going up and insurers dropping out of the market (and then their attempt to frame this as “Obama and Democrat’s plan bad, GOP plan good”). So below when we explain past court cases and the blocking of payments, and how the GOP uses tactics like this to “break ObamaCare,” you can know from recent example that we are trying to relay to you an ongoing strategy that uses obstruction for purely political reasons (at the expense of the American people in terms of coverage and costs). See: Trump’s Potential Obstruction of ObamaCare Explained. See also, The Effects of Ending the Affordable Care Act’s Cost-Sharing Reduction Payments. NOTE: HHS published a study in 2015 titled “POTENTIAL FISCAL CONSEQUENCES OF NOT PROVIDING CSR REIMBURSEMENTS (PDF)” that clearly shows how defunding Cost Sharing reduction will take down the Affordable Care Act. This wouldn’t lost on those who are attempting to break the Affordable Care Act, rather, one would assume their strategy targets Cost Sharing Reduction for exactly this reason.

TRUMP, REPUBLICANS, AND BREAKING OBAMACARE (TRUMP’S OWN WORDS): Trump recently said, “The Democrats are destroying health care in this country.” Then later Trump tweeted “2 million more people just dropped out of ObamaCare [that is misinformation btw]. It is in a death spiral [also misinformation]. Obstructionist Democrats gave up, have no answer [yes they do; they just don’t have enough seats in Congress to affect things; so… more misinformation] = resist!” Later Trump said, “Obamacare has been broken [it isn’t, it is working in many ways], and it’s been a broken promise. [this is rhetoric, but that aside it was Trump who promised a plan that would cover everybody; but the AHCA doesn’t and thus this is the broken promise]” In other words, Trump is using the tactic we are telling you the GOP uses. That is 1. break ObamaCare, 2. blame Democrats and offer the “GOP fix.” Below we explain the strategy behind the Republican plan to “break ObamaCare” and explain the strategy that Trump is using to “flip the script” and blame everything on Democrats using loaded and misleading terms like “death spiral.”[2]

The data shows the idea of an ObamaCare death spiral is essentially a myth. Analysis of premium and claims data from 2011 – 2016 found that insurer financial performance indeed worsened in 2014 and 2015 with the opening of the exchange markets, but showed signs of improving in 2016. Meanwhile, instability in the market from things like… the GOP blocking readjustments payments, has been contributing to a recent spike in premiums (one can assume that if the spike was just in underlying costs for insurers, and not a result of uncertainty, then claims data would also be rising… but it wasn’t, it was stabilizing under the ACA!)

Starving “the HealthCare Beast” (AKA, in this case, “ObamaCare”)

The Republicans have been actively trying to dismantle “big government” programs and “the liberal state” for decades. That is essentially their party platform, i.e. “small government.”

In the past decade, the Affordable Care Act has been a big target, but previous targets included just about every social program you can think of especially those of FDR and LBJ.

This isn’t a judgment call. We have seen a general and ongoing “starve the beast” strategy designed to roll back “big government” programs. The strategy to “break ObamaCare” and replace it with a Republican “repair plan” is just the latest iteration of the same general strategy.

The conservative coalition has been trying to take the government out of the business of helping people since at least the 1930’s. The small-government movement became very organized in the 1970’s and 1980’s with the theories of people like Rothbard, and under men like Roger Ailes, Roger Stone, Lee Atwater, and Grover Norquist. These people were the right-wing strategists of the conservative coalition.

You might think that strategy is justified or unjustified. You may say, “that aside, the ACA still isn’t working.” You could tell me that “big government progressivism” is just a clever ruse designed to ensure debt and government control. I cannot see how kicking 23 million people off their health insurance plans and giving tax breaks to the wealthy accomplishes anything good. I can see that abolishing estate tax and giving huge tax benefits to the very wealthy may well weaken our democracy and turn it into an oligarchy in which wealthy families have all the power.

Nevertheless, it has happened, and it is part of what caused the ACA marketplaces to become destabilized. It is, therefore, dishonest to whip out the “ObamaCare death spiral” talking point to justify the American Healthcare Act (TrumpCare).

SEEInsurance CEO: I’m raising Obamacare premiums because of Trump or see “the story of the 19% surcharge that resulted from Trump’s administration causing confusion over cost sharing reduction subsidies.”

TIP: In Iowa ObamaCar essentially broke, it won’t surprise you to hear that Republicans stepped in with a plan that looks a lot like the AHCA (TrumpCare).

A Summary of Things the GOP Did to Break ObamaCare

Below we explain some of the main points you need to understand in clear bullet points. See links for details.

The most straightforward approach to blocking the new law is for Members of Congress to stop funding of key provisions. For example, they could prohibit funding from going toward the Internal Revenue Service for enforcing the individual mandate. In addition, Members should also look at triggers or other mechanisms to stop or delay key provisions from going into effect. – The Heritage Foundation is describing the public version of the strategy to “break ObamaCare.”

  • The strategy to break ObamaCare is part of a consciously implemented strategy that can be traced back to entities like ALEC and the Heritage Foundation. See: Starve the Beast: The Republican Plan to De-Fund the Health Care Law (from Fox News) and The Case Against Obamacare A Health Care Policy Series for the 112th Congress (from 2010 by the Heritage Foundation). You can get a sense of the tactics they intended to use (and did).
  • Donald Trump claimed that “One-third of counties have only one insurer on Affordable Care Act exchanges.” This is true, but it is, in part, because most problems exist in rural Republican counties that tried to “break ObamaCare” by not supporting the program or expanding Medicaid. How could the ACA have succeeded in the states that did not support it? Medicaid expansionthe exchanges, and those who would qualify for assistance have all suffered under a GOP strategy to “starve the beast” and “break the Affordable Care Act.” Small government conservatives wanted their voters to suffer so that they could blame their problems on Obama and ObamaCare; it worked!
  • During the drafting of the Affordable Care Act, conservatives in both parties worked to ensure there was no public option in the bill. Ultimately conservative Democrats are to blame on that one, but part of the reason they struck the measure was to appeal to Republicans.
  • Speaking of Medicaid expansion specifically, the NFIB took the Affordable Care Act to the Supreme Court to attempt a repeal. It wasn’t repealed, but the Medicaid expansion requirement was overturned leaving millions without access to health insurance. This court case was brought by one of many right-wing law firms who follow the strategy of the GOP and entities like ALEC. This is a coordinated strategy to undo the liberal state and ensure “small government.”
  • Those same types of law firms were also behind the subsidy lawsuit and employer mandate lawsuits.
  • Remember, “red states” generally also rejected the health insurance exchanges, this didn’t exactly help (as it made understanding the ACA more confusing).
  • Marco Rubio blocked risk corridor payments (so insurers didn’t get reimbursed money allowed for by the ACA to entice them to enter the market). This caused insurers to raise rates and pull out of markets in 2015 and 2016.
  • These factors helped Republicans win in 2016, using the message that “ObamaCare is failing.” It also helped to justify their “ObamaCare repair” plan the Affordable Health Care Act.
  • Trump recently “took the teeth out” of the mandate via an executive order. Now, fewer people will be incentivized to enroll.
  • The Trump administration is causing uncertainty in the market which is causing insurers to “play scared.” HHS has been acting in the background to destabilize markets. One thing that was being considered was taking away out-of-pocket cost assistance reimbursements to insurers. If insurers and hospitals are uncertain of payment, it is bad for the market. See: Trump is Reportedly Considering Ending ObamaCare’s CSR Subsidies. This hasn’t happened yet, but the AHCA does get rid of cost sharing reduction subsidies.
  • FDR called out conservatives in the 1930’s for a tactic they use when they say “repair,” but really mean “dismantle.” See the video below. They tried to do that to FDR with his New Deal programs.
  • The AHCA does even more to “undo the liberal state” and “big government.” It freezes Medicaid for one thing. The Republicans also plan to privatize and block grant Medicaid, Medicare, and Social Security.
  • The idea that ObamaCare is in a “death spiral” is demonstrably false. See the Urban Institute Report that shows it works better in states that embraced the program and has slowed cost increases in those states. The Red states have brought down the national average.

The bottom line: The GOP tried to break the ACA by stopping the program in every way possible. They especially hurt their own constituents, all to set up this moment where they can claim the ACA is in a death spiral. They haven’t gotten away with it, as many liberals have called them out consistently… but they did sort of get away with it, after-all they won 2016, have badly damaged the ACA in 2017, and are poised to blame the mess they created on the Affordable Care Act and Democrats so they can get their tax cuts. The plan shows no sign of slowing down, in fact 2017 has seen many low-blows to healthcare. Just us calling them out isn’t good enough, please educate yourself on the above and help spread the word. Contact your Senator today and tell Congress to stop purposefully trying to break the Affordable Care Act and other related healthcare programs like Medicaid and CHIP in an effort to get tax breaks and score political points.

FDR: “Let me warn you…” (1936).

FACT: Four donors funded $8.5 million out of $10 million given to NFIB (National Federation of Independent Business) between 2010 and 2011. The NFIB funded the 2010 lawsuit against Obamacare (probably using that money.)

TIP: See legislative history of the ACA. Conservatives in the Democratic and Republican Party both picked apart the law. See also: Ideologies and Tactics Related to Defunding ObamaCare.

Citations

  1. Insurance CEO: I’m raising Obamacare premiums because of Trump
  2. Trump’s Attempts to Sabotage Obamacare Are Working

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