Trump’s Reported Obamacare Expansion Is Bad Policy And Politics

Talk about snatching defeat from the jaws of victory. After having faced down a Democrat-imposed government shutdown, the White House is reportedly preparing to give Democrats just about everything they wanted from the shutdown in the first place.

The details from the press reports are spotty, and the White House claimed that “any reporting about the administration’s health care positions is mere speculation.” Regardless, if this trial balloon comes to fruition, conservatives will live to regret it — as will Donald Trump.

Bad Policy

The stories on Sunday, first reported by MSNBC and followed up by subsequent articles, suggest that the administration will support a two-year extension of the enhanced Obamacare subsidies, first enacted under the Biden administration and scheduled to expire on Dec. 31. (If the enhanced subsidies lapse, the original Obamacare premium subsidies enacted in 2010 will remain.)

The plan will reportedly include some concessions to the significant concerns over fraud caused by the enhanced subsidies. It will propose capping subsidy eligibility at 700 percent of the poverty line and requiring some (unspecified) minimum premium amount, to address concerns that “free” premiums are prompting fraudulent enrollment.

But even here, the concessions are less than meets the eye. Capping eligibility at seven times the poverty level means that subsidy eligibility won’t fully phase out until just above $225,000 for a family of four — a highly affluent income in many areas of the country.

An extension of subsidies to insurers also contradicts what Trump himself said as recently as Tuesday, when he noted in an all-caps social media post that “the only health care I will support or approve is sending the money directly back to the people, with nothing going to the big, fat, rich insurance companies.” Now, reports suggest that this requirement has been watered down to “an option for enrollees to receive part of their [subsidy] in a tax-advantaged savings account if they move down to a lower-premium health plan.”

The press reports did not indicate whether the proposal will include protections to ensure that taxpayer dollars do not cover plans that fund abortion or cover transgender procedures — both of which Obamacare currently does. But Democrats will almost certainly insist that any subsidy extension must continue to send taxpayer dollars to plans that fund abortion and trans procedures for an extension to receive their votes.

Worse Politics

That leads into the politics of the reported proposal, which go from bad to worse. As it stands, this policy would 1) enhance, extend, and entrench Obamacare, 2) likely contain new taxpayer funding for plans that cover abortion, and 3) likely contain funding for plans covering trans procedures.

To say these highly prominent U-turns will demoralize conservatives — who Trump admitted did not turn out in this month’s elections — in next year’s midterms is putting it mildly. If President Trump turns tail and runs on all three of these hallmarks of conservative policy, what exactly is the point of voting for Republicans over Democrats? Will the president now release a new commercial doing a 180 on the famous ad from his reelection campaign: “Kamala Harris is for they/them — and so am I?”

The timing of this proposal only compounds the political damage. For starters, as noted above, congressional Republicans — to say nothing of the nation as a whole — endured a six-week government shutdown during which Democrats demanded a subsidy extension. Now, not two weeks after said shutdown ended without Republicans making a substantive concession, Trump is… giving Democrats practically everything they want. 

Won’t Benefit Trump

And Trump is giving Democrats practically everything they want at the last minute — i.e., the worst possible moment. If he were going to beat a retreat on the issue, at minimum he should have done so before months of scaremongering headlines from the media and Democrats (but I repeat myself). 

The president, given the electorate’s focus on affordability issues earlier this month, perhaps thinks that surrendering on the Obamacare subsidies will help Republicans in the midterms next year. Given the way this debate has played out, that thinking seems somewhere between optimistic and delusional. Democrats will brag that only their shutdown convinced Trump to change his mind, and conservatives will question why they should support a party that abandoned their principles on protecting life and opposing Obamacare. Donald Trump may think this flip-flop will help keep Republicans in control of the House of Representatives, but in reality, it’s much more likely to hurt than help.

In recent weeks, congressional Republicans and the conservative movement put enough pressure on the White House to force the president to switch his position on legislation requiring the release of files surrounding Jeffrey Epstein. Here’s hoping the outrage from conservatives over this proposal will prompt yet another U-turn from the administration, whereby Trump again decides to oppose anything that would enrich insurance companies and entrench Obamacare.