When Senate Minority Leader Chuck Schumer (D-N.Y.) opted to force the October 1 shutdown of the federal government to protect Biden-era Affordable Care Act (ACA) tax subsidies, he doubtless saw himself as saving the government health care program informally bearing former President Barack Obama’s name.
Instead, when the longest federal shutdown in history wrought coast-to-coast commercial airline service chaos, left federal civil service unpaid for weeks, and jeopardized federal food benefits for legions of poor and lower-middle-class Americans, Schumer’s decision put an unprecedented national spotlight on the reality of Obamacare’s many failures.
Shortly after Senate Democrats defeated the 14th Republican effort in five weeks to end the shutdown, President Donald Trump issued a November 8 Truth Social post laying out his idea for ending the spiraling costs under Obamacare once the government re-opened, saying:
“I am recommending to Senate Republicans that the Hundreds of Billions of Dollars currently being sent to money — sucking Insurance Companies in order to save the bad Healthcare provided by ObamaCare, BE SENT DIRECTLY TO THE PEOPLE SO THAT THEY CAN PURCHASE THEIR OWN, MUCH BETTER, HEALTHCARE, and have money left over. In other words, take from the BIG, BAD Insurance Companies, give it to the people, and terminate, per Dollar spent, the worst Healthcare anywhere in the World, ObamaCare.”
In a stroke of pure MAGA populism, Trump’s post did two things: First, he framed the “Schumer Shutdown” as actually protecting the multi-billions of tax dollars the tax subsidies going annually to health care insurance corporations, and second, he framed the coming reform debate as a choice between either empowering Americans to decide for themselves their health care coverage, or protecting government bureaucrats and corporate insurance executives getting rich on tax dollars.
Trump is far from alone in wanting to put consumers in charge of their health care coverage as the key to reducing costs and improving medical services delivery. Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Bill Cassidy (R-La.), for example, recently told a New Orleans NBC media outlet that he favors moving to Health Savings Accounts (HASs) that are pre-funded at a certain level by the federal government. The Louisiana Republican is a physician and a key player in any Senate decision-making on health care issues.
And Rep. Josh Brecheen (R-Okla.) told The Washington Stand that “Americans hopefully now clearly see the facts proving that Obamacare was never affordable. It’s called the Unaffordable Care Act for a reason, as health care premiums have gone up substantially since Obamacare was fully implemented in 2014, going from around $16,000 for the annual average family of four to now standing around $27,000 for the same family.”
The solution, according to the Oklahoma Republican, is legislative action that “starts moving toward free market principles and away from government involvement.”
How Congress ultimately acts remains to be seen, but congressional and health care experts interviewed by TWS agree the debate and subsequent reforms are all but inevitable because of the Schumer Shutdown.
“Ironically, the Democrats have made a strong case that President Barack Obama’s signature legislation was a major policy failure. Obama said repeatedly that his bill would bend the health cost curve downward and even made the claim that the typical family would save $2,500 annually. Fifteen years later, these claims appear even more absurd than when Obama uttered them,” said Dr. Robert Moffit, senior research fellow for the Heritage Foundation’s Richard and Helen DeVos Center for Human Flourishing.
Moffit served as deputy assistant secretary for Legislation at the Department of Health and Human Services (HHS) under President Ronald Reagan, as well as Assistant Director for Congressional Relations at the U.S. Office of Personnel Management (OPM).
As a result, according to Moffit, “congressional Republicans have a golden opportunity to change the trajectory of the health care debate. They should adopt a policy of addition, not subtraction. Let those who like Obamacare plans keep their Obamacare plans. But provide innovative alternatives for those who want more affordable coverage with broader access to doctors, hospitals, and specialists than available under most Obamacare plans.”
Economic Policy Innovation Center (EPIC) Executive Vice-President Brittany Madni, who worked on the Hill for a decade as a senior legislative aide, declared that “the shutdown orchestrated by congressional Democrats in a bid to extract $1.5 trillion in radical demands paid for by taxpayers has exposed a key fault line: Obamacare’s ongoing unaffordability.”
The shutdown debate over the Obamacare tax subsidies exposed the fact that, according to Madni, “If Obamacare offered truly affordable or quality care, we wouldn’t even be talking about subsidies. But we are. Now, congressional Republicans are seeing this as an opportunity to consider broader reforms that would actually drive down costs, unlike throwing more money into a broken system. They would be wise to advance a pro-freedom health care policy agenda that actually puts patients and taxpayers first instead of big insurance companies.”
A congressional relations veteran who is working on health care issues and who asked not to be named told The Washington Stand that genuine health care reforms are a real possibility because there is even support for such progress among some Democratic lawmakers.
“There is some hope in addressing health care costs. Some rank-and-file Democrats have expressed an interest in addressing distortive federal policies that drive up system-wide health care costs and thus increase premiums, but their leadership has blocked them from truly engaging,” the congressional relations expert explained.
Even before the Schumer Shutdown, he said, Democrats presented a solid wall of opposition to any changes in Obamacare. But that attitude is fading.
“Since passage of the ACA, Democrats have not been open to any changes to the law, even as networks narrowed, consolidation accelerated, and premiums soared. The regulatory and tax credit structure of the ACA are inherently inflationary. Even when Republicans appropriated cost-sharing reduction subsidies in the reconciliation bill that would have reduced premiums by 10-20 percent, Democrats objected and got that provision removed in the Senate,” the expert continued.
“Real reforms to the ACA to increase competition and lower premiums, like the nice-sounding but poorly constructed Medical Loss Ratio (MLR) requirement, require 60 votes in the Senate, and Democrats have not once shown any interest in tackling these problems they created. So, Republicans have and should continue to push for people to have more affordable options,” the expert added.
The MLR is a provision requiring health care insurers to spend at least 80% of a coverage premium on medical care and health improvement. But the MLR is irrelevant in the millions of cases in which the policyholder doesn’t file a claim. In such cases, which account for nearly all Obamacare policyholders, the health care insurer keeps all of the Obamacare tax subsidies that may apply.
As for Schumer, a survey of Democratic voters highlighted by CNN shows the New York Democrat, who has been in Congress since former President Ronald Reagan was inaugurated for his first term, to be four points underwater. And prominent members of his party like Rep. Ro Khanna (D-Calif.) are openly calling for his resignation.
A spokesman for Rep. Alexandria Ocasio-Cortez (D-N.Y.), who is widely expected to challenge Schumer, if he seeks another Senate term, did not respond to TWS’s request for comment.
https://washingtonstand.com/article/why-schumers-shutdown-could-be-the-death-of-obamacare
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