The law is unraveling on its own terms.
Why don’t the stories say: “President Trump Faithfully Executes Affordable Care Act”?
In report after sky-is-falling report, the journalism wing of the media-Democrat complex castigates the president over his decision to — as the New York Times put it — “scrap subsidies to health insurance companies that help pay out of pocket costs of low-income people.” These subsidy payments are “critical” to sustaining the “Affordable Care Act.” Without them, the Grey Lady frets, “President Barack Obama’s signature domestic achievement” could “unravel.” To add insult to injury, the paper implies that Trump’s “determination to dismantle [Obamacare] on his own” is a malign attack on the rule of law, coming only after Republicans reneged on their vow to repeal it by legislation.
It’s ironic. Notwithstanding the many outrageous, mendacious things the president says and tweets, the press is aghast that his “fake news” tropes against mainstream-media stalwarts resonate with much of the country. Well, if you want to know why, this latest Obamacare coverage is why. What Trump has actually done is end the illegal payoffs without which insurance companies have no rational choice but to jack up premiums or flee the Obamacare exchanges. The culprits here are the charlatans who gave us Obamacare. To portray Trump as the bad guy is not merely fake news. It’s an out-and-out lie.
Which is to say: It’s about as honest as the Democrats’ labeling of Obamacare as the Affordable Care Act.
The subsidy payments to insurance companies may be “critical” to sustaining the ACA, but they are not provided for in the ACA. The Obamacare law did not appropriate them. No legislation appropriates them. They are and have always been illegal. In essence, we are back to the question we asked a couple of weeks ago in connection with Trump’s then-anticipated decertification of Obama’s Iran Nuclear Deal: It is not whether the president should take this action; it is why he failed to take it before now.
Under the Constitution, no funds may be paid out of the treasury unless they have been appropriated by Congress. It is not enough for lawmakers to authorize a government program or action. The House and Senate must follow through with a statute that directs payment for the program or action. Standing alone, authorization is just aspiration; it does not imply appropriation. Congress authorizes a lot of things, but only the things for which Congress approves the disbursal of public money are permitted to happen.
The Affordable Care Act, so-called, was passed by the then-Democrat-controlled Congress and signed into law by President Obama in 2010. It established health-insurance markets known as the Obamacare “exchanges.” In the exchanges, people whose household income falls between 100 and 400 percent of the poverty level qualify for two kinds of financial assistance.
The first is a tax credit to reduce insurance premiums, authorized under ACA Section 1401. The ACA supports these premium reductions with a permanent appropriation — i.e., the appropriation is built into the law; Congress need neither appropriate funds in a separate statute nor renew the funds annually.
The second form of financial assistance on the exchanges is reduction in “cost-sharing,” under ACA Section 1402. “Cost-sharing” is made up of “deductibles, coinsurance, copayments, or similar charges.” Unlike the premium reductions, the cost-sharing reductions are not accomplished by tax credits. Instead, insurance companies are required to reduce what they would otherwise charge.
Why would insurance companies do that? Largely because they are supposed to get paid back. Section 1402 authorizes the secretary of health and human services to reimburse the insurance companies the amount of these reductions — i.e., it sets up an arrangement whereby the companies can be made whole by shifting the cost to taxpayers. But there is no appropriation for this arrangement. If Congress wants to permit reimbursement, it must appropriate funds in a separate statute — such as an annual appropriations act.
ACA enthusiasts insist that these two provisions are obviously intended to go hand-in-hand: Were the insurance companies not reimbursed, their cost-sharing losses would so outstrip what they reap from Obamacare (which forces people to buy their product) that they would abandon the exchanges — which could rupture the ACA structure.
It is very possible that such doomsday predictions are overstated, as our Robert VerBruggen explained in a Corner post on Friday. For present purposes, though, the point is: The ACA structure does not include symmetry between the premium tax credits and the cost-sharing subsidies. As written, the ACA unambiguously provides an appropriation for the former, but not the latter. If Congress does not enact an appropriation for the cost-sharing subsidies, the insurance companies may not lawfully be reimbursed.
Everyone has known this from the beginning. It was not an oversight — lawmakers did not mind being seen as generous with tax credits for low-income Americans, but they did not want to be seen as money funnels for corporate insurance titans. That is why the Obama administration quietly made annual appropriation requests to Congress when Obamacare was first implemented. And it is why Congress has refused to appropriate the funds.
President Obama understood that without reimbursement, the insurance companies would flee the exchanges or raise prices prohibitively. His signature legacy monument would be threatened. To prevent that, he violated the law. In 2014, his administration unilaterally began making non-appropriated cost-sharing payments to insurance companies. Those payments have continued, even through the first nine months of the Trump administration.
These payments are blatantly illegal. The federal district court in Washington so ruled last year. For what it’s worth, I believe Judge Rosemary Collyer was wrong to grant the House of Representatives standing to sue the Obama administration. The Constitution gives Congress its own powerful tools to confront presidential lawlessness; the Article I branch does not need the Article III branch to do its heavy lifting. That said, Judge Collyer’s decision on the merits is unassailable.
The media-Democrat narrative that President Trump is imperiously flouting the rule of law has it backwards. In cutting off the insurance-company subsidies, Trump is enforcing the ACA as written, consistent with his constitutional duty to execute the laws faithfully. It was President Obama who usurped Congress’s power of the purse by directing the payment of taxpayer funds that lawmakers had not appropriated.
Finally, the claim that Trump is “unraveling” the ACA would be laughable were it not so cynical. You can’t unravel something by honoring its terms. Obamacare is unraveling because it was designed to unravel. This is not a bug, it’s a feature.
Democrats want single-payer, socialized medicine, with all the central planning and rationing that implies. The public does not want that. Oh, it is fair enough to say the public doesn’t know what exactly it wants. It insists, for example, on mandatory coverage of pre-existing conditions (which is the opposite of insurance) but objects to a mandate (or other form of tax) needed to pay for it. Still, the public has a strong sense that it does not want government-run health care.
The Democrats grasp this. They know they can accomplish The Grand Plan only by inuring the public to it incrementally. That is what Obamacare is built to do. It is intended to unravel, only gradually and with the right villains taking the blame, while the government — having actually caused the problems — emerges as the savior.
Each juncture of the ACA’s inevitable collapse is orchestrated to highlight greedy insurance companies who opt out, or ruthless Republicans — and now, of course, the monstrous Trump — who cut off desperately needed funds. The idea is that when the system finally implodes, the public will be so contemptuous of the insurers and the GOP, they will see the government — the Democrats’ panacea of “free” universal health care — as the only viable option.
It can never be acknowledged that Congress did not actually provide for all the funding Obamacare needs to function.
This is why the role played by the Democrats’ media allies is so vital. The story can never be that, because of the way the ACA is structured, the insurance companies have no choice but to opt out if they are to survive. It can never be acknowledged that Congress did not actually provide for all the funding Obamacare needs to function because, if Democrats had been straight with the country about costs and objectives, the ACA would never have been enacted.
Republicans are afraid to deep-six Obamacare because they have never explained how bad it is. They do not want to be seen as shafting the people who benefit from it, even though it is at the expense of others who are badly harmed. Meanwhile, the public does not comprehend that Obamacare is unsustainable because the GOP, fearful of being framed for its failure, is actively complicit in (or at least passively resigned to) the shenanigans by which it is propped up.
The best way to make the case for repealing an atrocious law is to execute it faithfully. That appears to be President Trump’s new approach. If so, it has a lot more promise than empty GOP campaign prattle about “repeal and replace.”