Trump’s—and the GOP’s—Hat Trick of Falsehoods About Pre-Existing Conditions

Posted in: Health Law

Last week, USA Today published an op-ed by Donald Trump in which the president attacked Democratic proposals to create a system of Medicare for All. Despite using complete sentences and correct spelling, the essay was recognizably Trumpian: it stoked fears in his disproportionately elderly supporters through tendentious assumptions and outright lies. As Glenn Kessler observed in the Washington Post, “almost every sentence contained a misleading statement or a falsehood.”

One of the biggest whoppers was Trump’s claim that he has kept his campaign promise to “protect coverage for patients with pre-existing conditions.” That claim was triply dishonest. First, the administration is backing a lawsuit that would eliminate the current prohibition on insurers’ screening out people with pre-existing conditions. Second, the Republicans’ alternative would not provide real protection. Third and most telling, by accepting the logic of protecting patients with pre-existing conditions, Trump and the GOP give the lie to their red-baiting on Medicare for All.

The Affordable Care Act and its Discontents

The Affordable Care Act (ACA) has grown more popular over time, but its provision barring insurance companies from denying or charging extra for coverage of people with pre-existing medical conditions was popular from the start. Meanwhile, the ACA’s least popular provision—the so-called individual mandate that most people without another form of health insurance purchase a policy—was always closely tied to the pre-existing conditions provision.

How so? Based on the experience of various states before 2010, Congress had good reason to fear an adverse selection problem. If the ACA did not contain a mandate but did bar insurance companies from rejecting customers based on pre-existing conditions, then many young healthy people would choose to go without health insurance, knowing that they could always buy a policy later if they got sick. That, in turn, would starve insurance companies of premiums sufficient to pay for care. Combined with government subsidies, the mandate solved this problem by putting enough people in the health insurance pool to provide a viable market.

The ACA survived two Supreme Court challenges by 5-4 votes, first in a constitutional case in 2012 and again in 2015 in a statutory case. However, late last year, Congress seriously undermined the ACA by reducing to “$0” the tax that people who fail to obtain health insurance under the mandate must pay. That provision will become effective next year, and whether it will send the individual insurance market into a death spiral remains to be seen.

Meanwhile, the Trump administration is not taking any chances. It has slashed funding for efforts to promote the ACA; with the backing of all but one Senate Republican, it has expanded the availability of insurance plans that provide minimal coverage, thereby undermining the pool for fully ACA-compliant plans; and in direct contradiction of the president’s claim to care about insurance for people with pre-existing conditions, it has lent its support to a lawsuit that, if successful, would invalidate much or all of the ACA, including guaranteed coverage for such conditions.

The Latest Challenge to the ACA

Texas and nineteen other states brought the suit. They argue that the scheduled elimination of the tax penalty for failure to obtain health insurance means that the rationale of the 2012 Supreme Court ruling—which upheld the ACA’s mandate based on congressional power to tax—no longer applies. And because five justices indicated in 2012 that the mandate could not be sustained under any other power, without the tax the mandate is unconstitutional.

Well, so what? Who cares whether a nominal obligation to purchase health insurance backed by no penalty for noncompliance is constitutional? After all, even if it is valid, starting next year the mandate will have no effective force.

Aha!, say Texas and the other plaintiff states: the mandate is crucial to the operation of the rest of the ACA, so that if it is unconstitutional, then the rest of the Act—including the prohibition on insurance companies screening for pre-existing conditions—must also be struck down. In legal jargon, Texas and the other plaintiff states argue that the rest of the ACA is not severable from the now-invalid mandate.

That is a terrible argument. Severability, the courts have long held, is basically a matter of statutory construction. A court faced with a law with an invalid part asks the counterfactual question whether the legislature would have enacted the rest of the law without the problematic piece. That can be a tricky inquiry, but in this latest ACA challenge it is child’s play: we don’t have to guess whether Congress would have preserved the rest of the ACA without the mandate, because Congress, with the enthusiastic support of the president, did just that last December, when it reduced the tax penalty to zero but left the rest of the law intact.

Nevertheless, a hearing last month showed once again that no argument attacking the ACA is too far-fetched for some Republican appointees to the bench. Federal District Judge Reed O’Connor suggested that instead of looking at what the most recent Congress actually did, he was inclined to speculate about what the Congress that enacted the original version of the ACA in 2010 would have done with the rest of the law if no mandate were included.

For now, however, the key point is not whether Texas and the other plaintiff states will or should prevail. Instead, the key is that the Trump administration has joined the plaintiffs in urging the court to invalidate the prohibition on denying coverage to people with pre-existing conditions.

The GOP Alternative

How can Trump square his support of the Texas lawsuit with his supposed commitment to protecting Americans with pre-existing conditions? He might point to a bill recently proposed by some Republican senators. It would create a law with the seemingly reassuring title “Ensuring Coverage for Patients with Pre-Existing Conditions Act.”

Yet the GOP senators’ bill is, as one health reporter bluntly described it, “a fraud,” because while nominally requiring insurers to issue policies to people with pre-existing conditions, it does not require that such policies actually cover those conditions. For example, the Republican bill would allow an insurer to sell someone who has or had cancer a policy that does not cover treatment for cancer.

Indeed, one need not even examine the fine details of the GOP bill to see that it is entirely for show. There is another glaring shortcoming in the bill. The Trump administration itself argues in its brief in support of the Texas challenge to the ACA that a purchase mandate backed by a penalty is essential to the operation of a prohibition on insurers screening out individuals with pre-existing conditions. That, after all, is the chief basis for the claim that the mandate and the guaranteed coverage provision are non-severable. Thus, even on the administration’s own logic, a serious effort to protect Americans with pre-existing conditions would include an individual mandate. Yet the Republican Congress and Trump gleefully undid the mandate last year when they zeroed out the tax penalty. Needless to say, the GOP “alternative” fails to include a mandate, much less one backed by a penalty.

Trump Red-Baits Himself

The third lie about pre-existing conditions in Trump’s op-ed is perhaps the most galling. Reflecting the “ravenous anti-Communist grandstanding” of his late mentor Roy Cohn, Trump writes: “If Democrats win control of Congress this November, we will come dangerously closer to socialism in America.” Medicare for All would have the US join every other advanced democracy in providing universal health care. Yet the red-baiter-in-chief asserts that Democratic support for it shows that “Democrats are radical socialists who want to model America’s economy after Venezuela.”

The charge is risible on its face. But it is more. It contradicts Trump’s ostensible support for protecting Americans with pre-existing conditions.

Consider how insurance markets generally work. People purchase insurance policies as a hedge against large risks. Insurance companies, in turn, price those policies in a way that reflects those risks. Other things being equal, a homeowner’s policy will be cheaper for someone whose house contains working smoke detectors than for someone whose house does not; an auto policy will cost more for a driver who has had multiple accidents than for one with a clean record; etc. If a law mandated that insurance companies sell homeowner’s policies to people whose houses are currently on fire or have recently burned down, the companies could not survive. Legislation would have to supplement such a requirement with something like subsidies and a purchase mandate—just as the original ACA did for health insurance.

This little thought experiment tells us that protecting the ability of people with pre-existing conditions to purchase health insurance takes health insurance out of the logic of conventional markets and into the realm of so-called social insurance. There is nothing wrong with that, of course. Some of the most popular government programs—including Social Security and Medicare—provide social insurance. But if Trump thinks that social insurance is “socialism” in the Venezuelan or Soviet sense, then he should oppose the popular programs as well.

Yet far from admitting that his “socialism” charge would undo programs Americans have embraced for decades, Trump portrays himself as the savior of the existing Medicare program. That too is preposterous, even on its own terms, but even if Trump really were trying to preserve Medicare and the Democrats really were trying to gut it, that would only show the incoherence of Trump’s position. Congress adopted Medicare itself over the vociferous opposition of critics who decried it as socialism.

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In light of Trump’s thousands of false or misleading claims, it might seem odd to expend so much energy on three falsehoods regarding pre-existing conditions. But while each presidential lie does damage, the ones about health insurance are special.

For the better part of a decade, opposition to the ACA has defined the GOP brand, even as Republicans pretend to favor the law’s most popular provision. The Texas-led lawsuit and the sham replacement bill show that Republicans are engaged in a gigantic deception, and in this regard they are on the same page as the president. When it comes to pre-existing conditions, Trump is just a symptom; Republican opposition to universal coverage is the disease.

Posted in: Government, Health Law

Tags: Legal, Medicare

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