The Trump administration tried to intimidate insurers into supporting Obamacare repeal.

The Trump Administration Reportedly Tried to Intimidate Insurers Into Supporting Its Turd of a Health Care Bill

The Trump Administration Reportedly Tried to Intimidate Insurers Into Supporting Its Turd of a Health Care Bill

Moneybox
A blog about business and economics.
May 18 2017 6:57 PM

The Trump Administration Reportedly Tried to Intimidate Insurers Into Supporting Its Turd of a Health Care Bill

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Donald Trump shaking hands with Seema Verna, who apparently shares his affection for two-bit mafioso tactics.

Photo by JIM WATSON/AFP/Getty Images

From time-to-time during his presidency, Donald Trump has casually threatened to bring Obamacare's health coverage markets crashing down by cutting off a crucial set of subsidies the government currently pays to insurers. This is usually mentioned as part of a possible effort to win some kind of concession from Democrats. Early last month, he told reporters he might halt the cost-sharing reduction payments, as they're known, if Chuck Schumer and Nancy Pelosi refused to negotiate a new health care bill. After that went nowhere, the administration briefly tried to bargain the CSRs in return for money to build Trump's beloved wall along the Mexican border. That idea flopped as well.

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate’s senior business and economics correspondent.

It turns out that team Trump has also pulled this amateur hostage-taking schtick with representatives of the private sector. Deep in a piece about how the administration's erratic and unpredictable behavior is wreaking havoc on the insurance markets—and probably causing premiums to rise—the Los Angeles Times reports that a top Department of Health and Human services official apparently told a group of insurance industry executives that Trump would keep making the CSR payments if they would publicly support the House Republican's Obamacare repeal bill. To wit:

At one recent meeting, Seema Verma, whom Trump picked to oversee the federal Medicare and Medicaid programs, stunned insurance industry officials by suggesting a bargain: The administration would fund the CSRs if insurers supported the House Republican bill to repeal the Affordable Care Act.
“It made no sense,” said one official at the meeting.
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If one wanted to be generous, they could say this two-bit mafioso impression is just a colorful example of backroom interest group politics. Insurers want to keep these subsidies. The White House desperately would like insurers to back its claims that Trumpcare will lower premiums. You scratch our back, we'll scratch yours.

But no, this is not just regular favor trading or negotiating. This is a government official threatening to topple over the individual insurance market unless carriers play ball with a political agenda. This is not normal, as they say. And it makes an excuse of the Trump administration's excuse for stopping the CSR's, which is that they might not be legal. A trial court judge ruled that Congress never properly appropriated money for the subsidies, which compensate insurers for lowering their poorer customers' out-of-pocket expenses, and the White House must decide whether to continue appealing the ruling. But by repeatedly offering these subsidies as bargaining chips in negotiations, the administration is making it crystal clear that this issue really has anything to do with the law. That was sort of obvious to begin with, but they're not even trying to hide it.

This also speaks to just how repellant anybody who knows anything about health care finds this turd of a bill that the House GOP crafted. The administration was apparently having so much trouble getting insurers to back the legislation that it tried to make a whole table of executives an offer they couldn't refuse—and yet they did.

Update, May 18, 7:19 PM: After my story went up, a spokeswoman for the Centers for Medicare and Medicaid Services sent an email claiming the LA Times' reporting was fake news. She passed along this statement from CMS communications director Jane Norris, who purportedly attended the meeting with Verma. “The statement about Administrator Verma suggesting that the administration would fund CSRs is absolutely false. What she said at the AHIP meeting in April was that no decisions had been made about CSR’s.”