trending Market Intelligence /marketintelligence/en/news-insights/trending/KwaUJCh18XLliDZhfKeqBA2 content esgSubNav
In This List

Health official declines to specify Trump backup plan if Obama law invalidated


According to Market Intelligence, December 2022


Insight Weekly: Layoffs swell; energy efficiency PE deals defy downturn; 2023 global risk themes


Insight Weekly: Energy crisis cripples Europe; i-bank incomes rise; US holiday sales outlook


Japan M&A By the Numbers: Q3 2022

Health official declines to specify Trump backup plan if Obama law invalidated

Seema Verma, administrator of the U.S. Centers for Medicare and Medicaid Services, declined House Democrats' requests to provide details of President Donald Trump's backup plan if the Affordable Care Act is invalidated by the U.S. Supreme Court.

SNL ImageCMS Administrator Seema Verma
Source: AP Photo

"It sounds almost like there's some kind of secret plan that he doesn't want to reveal," Rep. Frank Pallone, D-N.J., chairman of the House Energy and Commerce Committee, said during an Oct. 23 hearing of the Oversight and Investigations Subcommittee.

Pallone and other Democrats pressed Verma about the administration's plans for how it would address millions of Americans being left without healthcare insurance and other programs forced to stop if the ACA is declared unconstitutional.

"I'm not going to get into any specifics," Verma responded. "We have planned for a number of different scenarios, but we need to hear from the courts."

The U.S. Court of Appeals for the 5th Circuit is expected to soon rule on whether to uphold a Texas judge's December 2018 decision that the ACA is unconstitutional.

The case will probably go to the Supreme Court, which has twice upheld the ACA — in 2012 and in 2015. Arguments at the high court are expected to take place amid the 2020 U.S. election cycle.

A coalition of Republican state attorneys general and governors argued that when Congress zeroed out the ACA's tax penalty for the individual mandate under the 2017 tax reforms, it rendered the remainder of the healthcare law unconstitutional.

Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas agreed with that position and deemed the entire ACA invalid, saying the individual mandate penalty could not be severed from the rest of the law.

The Trump administration refused to defend the law and initially called on the court to specifically overturn the ACA's preexisting conditions protections, but in March told the 5th Circuit it wanted the entire law dismantled.

Since his time on the campaign trail in 2016, Trump has promised he would have a healthcare plan that would cover all 330 million Americans with insurance — a vow he has repeated a number of times since entering the White House in January 2017.

SNL ImageRep. Frank Pallone, D-N.J.
Source: AP Photo

In June, Trump said he would unveil a "phenomenal healthcare plan" in a month or two. Since then, he has introduced a number of proposals and ideas in a piecemeal fashion, like initiatives to end HIV infection and pursue a better flu vaccine — a pattern a top White House aide said earlier this month was expected to continue and is part of his reelection strategy.

At the Oct. 23 hearing, Verma said the administration would ensure the ACA's protections for Americans with preexisting conditions would be maintained, though she declined to say how her agency would carry out that promise.

"If the ACA goes, CMS doesn't have any legal authority to prevent private insurers from discriminating on the basis of health status," Nicholas Bagley, a law professor at the University of Michigan, tweeted in response to Verma's remarks.

Democrats noted there are about 133 million Americans with preexisting medical conditions, like asthma, diabetes and cancer.

Rep. Greg Walden, R-Ore., ranking member on the Energy and Commerce Committee, acknowledged Republicans back a number of the provisions in the ACA, including its protections for Americans with preexisting conditions and the measure that lets children stay on their parents' insurance until age 26.

"There's a whole host of things," Walden said.

A recent survey by the nonpartisan Kaiser Family Foundation found that few Americans think Trump will deliver on his healthcare promises.

Democrats see 'sabotage'

Rep. Diana DeGette, D-Colo., head of the Oversight and Investigations Subcommittee, noted that on Trump's first day in office, he issued an executive order directing all federal agencies to dismantle the ACA "to the maximum extent by law."

SNL ImageRep. Diana DeGette, D-Colo.
Source: AP Photo

After the ACA was signed into law in 2010, over 20 million gained health insurance, many of them through the expansion of Medicaid, which covers low-income Americans, DeGette said.

But for the first time since the ACA was implemented, the number of uninsured U.S. residents increased, with nearly 2 million more people now without coverage, she noted, citing U.S. Census Bureau data reported in September.

Democrats also noted that the Trump administration has extended short-term limited duration plans — policies critics call "junk" or "skimpy" insurance — which largely do not cover services for Americans with preexisting conditions.

While CMS and the White House have kept the details of any ACA replacement plan under wraps, "it's no secret that the Trump administration has worked to sabotage healthcare in this country," DeGette said.

Premiums falling

But Verma defended the Trump administration's actions on healthcare, noting that the agency reported a day earlier that the average premium for the benchmark "silver plan" on the ACA marketplace,, is expected to fall by 4% for the 2020 coverage year.

It will be the second consecutive year premiums have dropped, Verma said, insisting actions the Trump administration has taken resulted in those declines and the trend toward market stabilization.

She said the premiums have stabilized because of the reinsurance programs the administration approved in a dozen states, which have used state and federal funds to help insurers cover the costs of high-cost patients.

"For all the work we're doing, I don't know how we measure that, but that looks like success," Verma said.