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Trump administration tries playing hardball with health insurers

When the Trump administration starts threatening health insurers in a mob-like scheme, there's a problem.
Pedro Rojas holds a sign directing people to an insurance company where they can sign up for the Affordable Care Act, also known as Obamacare, before the February 15th deadline on Feb. 5, 2015 in Miami, Fla.  (Joe Raedle/Getty)
Pedro Rojas holds a sign directing people to an insurance company where they can sign up for the Affordable Care Act, also known as Obamacare, before the February 15th deadline on Feb. 5, 2015 in Miami, Fla. 
It's been an odd week for the debate over health care policy.On the one hand, there's encouraging evidence about the real-world benefits of the current system. Bloomberg Politics reported that the Affordable Care Act is helping Americans detect cancer earlier, which saves lives and money. A day earlier, the Centers for Disease Control and Prevention published a new report that showed the nation's uninsured rate dropping to the lowest point on record.On the other hand, Donald Trump is president. He told the nation yesterday, "Obamacare is collapsing. It's dead; it's gone. There's nothing to compare anything to because we don't have health care in this country.... We don't have health care. Obamacare is a fallacy. It's gone."As is too often the case, Trump's little tirade was at odds with reality. The status quo under the ACA is not without challenges, but (a) the system is not "collapsing"; (b) the Republican plan would make matters far worse; and (c) Trump and his team appear to be taking steps to sabotage the American system as part of the GOP's political ambitions.The Los Angeles Times had an important piece along these lines yesterday:

The growing frustration with the Trump administration's management -- reflected in letters to state regulators and in interviews with more than two dozen senior industry and government officials nationwide -- undercuts a key White House claim that Obamacare insurance marketplaces are collapsing on their own.Instead, according to many officials, it is the Trump administration that is driving much of the current instability by refusing to commit to steps to keep markets running, such as funding aid for low-income consumers or enforcing penalties for people who go without insurance.

Privately, the report added, "many executives, including chief executives of major health plans, offered withering criticism of the Trump administration's lack of leadership."In this case, the deliberate uncertainty the White House is creating is doing systemic harm, but it's not the full extent of Team Trump's malice. The L.A. Times report went on to note:

At one recent meeting, Seema Verma, whom Trump picked to oversee the federal Medicare and Medicaid programs, stunned insurance industry officials by suggesting a bargain: The administration would fund the CSRs if insurers supported the House Republican bill to repeal the Affordable Care Act."It made no sense," said one official at the meeting.

Let's be clear about why this is important. The article described a scene in which a top Trump administration official effectively played the role of a mob boss, telling private insurers they should endorse the Republicans' regressive health care plan, and in exchange, the White House wouldn't crash the health markets by scrapping cost-sharing reductions.If it sounds like an organized-crime scheme, that's because, for all intents and purposes, it is.About seven years ago at this time, in the wake of the Deepwater Horizon oil spill, then-President Obama met with BP executives and made clear what the oil giant needed to do to put things right. As long-time readers may recall, BP agreed, at the president's insistence, to put aside $20 billion in escrow to bring relief to those hardest hit by the disaster.A day later, Rep. Joe Barton (R-Texas) apologized to the CEO of BP. "I'm ashamed of what happened in the White House yesterday," the Texas Republican said. "I think it is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown, in this case a $20 billion shakedown."Talking directly to Hayward, Barton added, "I apologize. I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong, is subject to some sort of political pressure that is, again, in my words, amounts to a shakedown. So I apologize."That wasn't a shakedown. The stunt the Trump administration tried to pull with insurers was.Update: I heard from Jane Norris, the communications director in the Trump administration's Centers for Medicare & Medicaid Services, who said, "The LA Times story is completely false. The assertion that Administrator Verma offered to fund the CSR in exchange for support for legislation is preposterous."