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July 19, 2017

Trump says he will 'let ObamaCare fail.' Here are 3 ways he could do that.

Daily Briefing

Editor's note: This is a developing story.

While Senate Republicans' latest plan to repeal the Affordable Care Act (ACA) appears poised to fail, all eyes are turning to the Trump administration, which industry experts say has the ability to sink or save the health reform law.

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Trump's 3 key points of leverage

President Trump's comments following the collapse of the GOP reform effort suggest he is leaning toward allowing the ACA to falter.

Trump on Tuesday said, "I think we're probably in that position where we'll just let ObamaCare fail," adding, "We're not going to own it. I'm not going to own it. I can tell you that the Republicans are not going to own it. We'll let ObamaCare fail and then the Democrats are going to come to us."

Those comments appeared to accept the failure of the GOP's current repeal-and-replace effort. On Wednesday, the president appeared to have reversed course, tweeting that Republican senators "MUST keep their promise to America" to repeal the ACA. Trump invited all Republican senators to lunch at the White House on Wednesday to discuss a path forward on health care reform. Following the lunch, Trump said senators should not leave for a planned August recess until they take action on health care reform, the Associated Press reports.

Still, if Trump truly does want to allow the ACA to fail, industry experts say he has several major points of leverage.

The first will come this week, as the administration faces a Thursday deadline for making regular cost-sharing reduction (CSR) payments to insurers. The payments were authorized under the ACA, but some Republicans contend that Congress never actually funded the payments.

Insurers say the CSR payments are essential to stabilizing the ACA's exchange markets, but Trump thus far has been noncommittal about whether he will make them. According to Politico, a White House spokesperson on Monday said the administration still is "considering [its] options," adding, "Congress could resolve any uncertainty about the payments by passing legislation and reforming Obamacare's failed funding structure."

The Senate's Better Care Reconciliation Act would have guaranteed the CSR payments for 2018 and 2019, and on Tuesday Sen. Jeanne Shaheen (D-N.H.) proposed a separate measure to fund the payments. However, Senate Majority Whip John Cornyn (R-Texas) suggested such a move is unlikely, characterizing it as a "bailout of insurance companies without reform."

A second way the administration could undermine the ACA is by ending enforcement of the ACA's individual mandate, which requires most U.S. residents to purchase health insurance or pay a fine. The Congressional Budget Office has estimated that, if the mandate were fully repealed, up to 15 million fewer people would have health insurance, and individual market premiums would increase as healthier people opt out of purchasing insurance and leave the risk pool.

Finally, the administration also could choose not to advertise the ACA's open enrollment periods—as it briefly did earlier this year before reversing course. That could lead to fewer people signing up for insurance during open enrollment, experts say.

Policymakers consider approaches to shore up the ACA

Despite Trump's assertion that he will allow the ACA to fail, some lawmakers now are turning toward bipartisan action to reform health care.

Senate Minority Leader Chuck Schumer (D-N.Y.) said, "There's a fork in the road for our Republican colleagues," adding, "They can do what [Trump] said, which is sabotage the system out of anger and out of pique," or they can work with Democrats to improve the ACA.

It appears that some GOP lawmakers are open to collaboration.

McConnell on Tuesday said if GOP lawmakers fail to advance health reform legislation on their own, they "will have demonstrated that Republicans by themselves are not prepared at this particular point to do a replacement and that doesn't mean the problems all go away." He continued, "You'll have to look at our committee chair[s] and their ranking members," adding, "My suspicion is there will be hearings about the crisis that we have and we'll have to see what the way forward is."

Senate Health Education, Labor, & Pensions Committee Chair Lamar Alexander (R-Tenn.) announced that regardless of the outcome of the Senate's seemingly doomed vote to immediately repeal the ACA, he plans to hold hearings on ways to bolster the individual health insurance market.

In addition, Sens. Joe Manchin (D-W.Va.) and Mike Rounds (R-S.D.) on Tuesday said they were going to hold a meeting with senators who are former governors on bipartisan health reform efforts (Demko/Dawsey, Politico, 7/18; Carney, The Hill, 7/18; Werner/Fram, AP/Sacramento Bee, 7/19; Sanger-Katz, "The Upshot," New York Times, 7/18; Kaplan, New York Times, 7/18; McIntire, CQ News, 7/18 [subscription required]; Kelly/Shesgreen, USA Today, 7/18; Associated Press tweet, 7/19; Min Kim et al., Politico, 7/18).

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