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Why would Trump block a state from making Obamacare more conservative?

Dylan Scott covers health care for Vox. He has reported on health policy for more than 10 years, writing for Governing magazine, Talking Points Memo and STAT before joining Vox in 2017.

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The Washington Post has a blockbuster report: President Donald Trump personally intervened to try to block Iowa's proposal for stabilizing its Obamacare marketplace.

Trump read a story about Iowa's plan to overhaul its individual market in the Wall Street Journal, according to the Post, and called Seema Verma, the top official at the Centers for Medicare and Medicaid Services, to make clear that he wanted the proposal to be rejected. (According to the Des Moines Register, Iowa officials haven't actually been told it will be — so it's possible Trump won't get his wish.)

When you tell the tale like that, you can at least see some logic from Trump's perspective. He has said very openly he wants Obamacare to fail. This ostensibly would help that happen.

It is still a blatant act of Obamacare sabotage by the president himself, putting insurance coverage for thousands of people at risk. But whatever you think about that choice, it would at least be consistent with his stated goals.

The real story is actually more bizarre, though. Iowa's waiver didn't just seek to stabilize the insurance market. It also included a whole host of provisions that would have made the state's marketplace much more conservative, a marketplace that looks a lot like what House Republicans envisioned in the American Health Care Act.

In other words, Trump didn't just intervene to stop a Republican-led state from stabilizing its insurance market. He intervened to stop a Republican-led state from implementing a conservative health plan with many of the same ideas as the House bill that he celebrated on the White House lawn this spring.

The Iowa waiver did include a reinsurance program to compensate insurers for high-cost patients, a popular feature of other states' stabilization plans that many Republicans in Congress have derided as a bailout.

But Iowa wanted to do a lot more than that. The state wanted to:

  • Transition away from Obamacare's income-based subsidies to flat subsidies based on age
  • End Obamacare's cost-sharing reduction payments
  • Give insurers more flexibility to charge older customers higher premiums than younger people
  • Create a continuous coverage requirement

The AHCA would have done all of those things too. The change from subsidies that are a percentage of a person's income to a flat dollar amount, especially, is a significant change, one that Speaker Paul Ryan is known to support.

I don't want to overstate it: Iowa wasn't talking about ending its Medicaid expansion or overhauling Medicaid entirely, as the AHCA did. It wouldn't have repealed the individual or employer mandates like the House bill.

But this was a quite conservative plan, a sort of mini-AHCA for Iowa.

"This waiver included some of the more conservative elements Republicans were looking to enact through the repeal-and-replace debate in Congress," Larry Levitt at the Kaiser Family Foundation told me.

And that's the plan that Trump personally sought to stop.

It's a bizarre move, one that I don't think much of the news coverage has captured when portraying the story as Trump stepping in to stop a state from stabilizing Obamacare.

So why would he do this?

I think we can divine from the various reports about Trump and the Obamacare repeal debate that the president is not personally interested in health policy. It's possible he simply didn't know what Iowa was proposing.

But even so, this episode illustrates how deep Trump's obsession with undercutting Obamacare runs. We already knew the president was ready to take the CSR payments hostage. We have seen his administration cut support for Obamacare open enrollment.

But this is something else, I think: This is stopping conservative health policy from being implemented — and the only reason, it appears, is that it might be seen as stabilizing Obamacare. Whether Trump knew it or not, he ended up blocking a very Republican health care plan

Chart of the Day

Kaiser Family Foundation

Insurer fortunes improve in Obamacare. We have some new data that suggests health plans are increasingly seeing better business under the health care law and its market is therefore stabilizing. Insurers' margins — the difference between the premiums they bring in and the claims they pay out — are now significantly improved, even better than what they saw back in 2011, before Obamacare took full effect. Read more from KFF here.

Kliff’s Notes

Your daily top health care reads, with research help from Caitlin Davis

News of the day

  • Trump rolls back Obamacare birth control mandate”: “The Trump administration will allow virtually any employer to claim a religious or moral objection to Obamacare's birth control coverage mandate under a sweeping rollback announced Friday.” —Brianna Ehley, Politico
  • “Graham brings 20-week abortion ban to Senate with 45 co-sponsors”: “The "Pain-Capable Unborn Child Protection Act," which faces long odds in the upper chamber, would make it illegal for any person to perform or attempt an abortion after 20 weeks of pregnancy with the possibility of five years in prison, fines or both.”— Jessie Hellmann, the Hill

“As ACA enrollment nears, administration keeps cutting federal support of the law”: “Supporters of the Affordable Care Act see the president’s opposition even to changes sought by conservative states as part of a broader campaign by his administration to undermine the 2010 health-care law. In addition to trying to cut funding for the ACA, the Trump administration also is hampering state efforts to control premiums.” —Juliet Eilperin, Washington Post

Analysis and longer reads

  • ​“Association Health Plans: A Favorite GOP Approach To Coverage Poised For Comeback”: “Under association health plans, small businesses can join associations — based on certain types of professional, trade or interest groups — that offer insurance to members. Republicans for decades have favored such arrangements, seeing them as a way for small groups to get more clout with insurers.” —Julie Appleby, Kaiser Health News
  • “High-deductible health plans curb costs, usage, research shows”: “The review found that high-deductible health plans were associated with a significant reduction in preventive care in seven of 12 studies and a significant reduction in office visits in six of 11 studies — which in turn led to a reduction in both appropriate and inappropriate care.” —Jeff Lagasse, Healthcare Finance

“Why America Needs Foreign Medical Graduates”: “We don’t have enough graduates even to fill residency slots. This means that we are reliant on physicians trained outside the country to fill the gap. A 2015 study found that almost a quarter of residents across all fields, and more than a third of residents in subspecialist programs, were foreign medical graduates.” —Aaron E. Carroll, New York Times

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