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--:-- Sean Rameswaram: Hey everyone, all this time I've been talking about Mattress Firm and I haven't even mentioned that they don't just carry firm mattresses, they've got soft ones too, and everything in between. If you don't know, now you know, listener. Thank me for the tip after you head to mattressfirm.com slash podcast to learn how you can improve your sleep.
--:-- Sean Rameswaram: This is Today Explained, I'm Sean Rameswaram. Remember not so long ago when the Affordable Care Act, aka Obamacare, was like the only thing Republicans talked about? We can repeal, but we should repeal and replace, and we shouldn't leave town until this is complete. They tried to repeal it. Republicans retreating in defeat today, calling off an expected vote to repeal Obamacare. That didn't go so well.
--:-- Sean Rameswaram: This is a disappointment. A disappointment indeed. They got rid of the individual mandate. When the individual mandate is being repealed, that means Obamacare is being repealed. And that was kind of the end of it. Mission accomplished. No.
--:-- Sarah Kliff: I talk a lot about health care here at Vox. Sarah, I haven't heard anything about Obamacare in a while. Is it because everything is just great?
--:-- Sarah Kliff: No, no. Where have you been, Sean? There was literally just yesterday a lawsuit filed by 20 states that is trying to dismantle Obamacare.
--:-- Sarah Kliff: And ground zero is Idaho. What's happening in Idaho?
--:-- Sean Rameswaram: The state government on January 24th, so just about a month ago, they sent this memo to insurance plans that said you don't have to follow Obamacare anymore if you don't want to.
--:-- Sarah Kliff: The state of Idaho is attempting to lower insurance premiums by proposing policies that scrap key provisions required by the Affordable Care Act. The state's attempt is thought to be the first of its kind in the nation.
--:-- Sarah Kliff: If you want to charge higher premiums to people with pre-existing conditions, anything from cancer to arthritis, you can start doing that. Is it legal?
--:-- Sean Rameswaram: That is pretty plainly illegal under the Affordable Care Act. Obamacare requires insurance companies to charge everybody, sick or healthy, the same prices.
--:-- Sarah Kliff: And it sets up this possibility that you could have a state where Obamacare exists but is not followed.
--:-- Sean Rameswaram: Is any part of the federal government, Health and Human Services, doing anything to say like, hey, you got to play by the rules, guys?
--:-- Sarah Kliff: Not yet. The Health and Human Services Secretary, Alex Azar, who oversees the Affordable Care Act, has faced questions from reporters.
--:-- Sean Rameswaram: What are you going to do about Idaho? I'm not in a position to rule on something that I've seen a media report about.
--:-- Sarah Kliff: And so let's let's let that let's see where the state of Idaho ends up. I would argue that he is exactly the person whose place it is to deal with this sort of situation.
--:-- Sean Rameswaram: In a way, it doesn't make sense. Federal government is supposed to enforce federal law. But it makes sense if you look at it as the Trump administration has spent an entire year trying to repeal the Affordable Care Act, that they are not going to come in and save it in Idaho.
--:-- Sarah Kliff: Idaho, obviously a red state. Does this mean other red states, states that don't particularly care for the ACA, might start following suit? Is it setting sort of a precedent?
--:-- Sean Rameswaram: It very well could be. We haven't seen any state say, I'm going to take the Idaho approach quite yet.
--:-- Sarah Kliff: I think one of the things they're waiting for is to see what kind of lawsuits might unfold over the Idaho decision.
--:-- Sean Rameswaram: There are still 18 states, including big states like Texas and Florida, that haven't expanded the Medicaid program, which they had the opportunity to under the Affordable Care Act.
--:-- Sarah Kliff: So you certainly could see this being an appealing option to states that have been really, really resistant to implementing Obamacare.
--:-- Sean Rameswaram: The fact that President Trump kind of failed to repeal Obamacare but is now letting Idaho dismantle it feels kind of like the ending of like the first Oceans movie, Oceans 11, where the crew makes you think they didn't successfully steal the money, but they totally successfully stole the money.
--:-- Sarah Kliff: Do you believe I'm going to allow you to parade bags full of my money out my casino door? No you going to carry it out for us Yeah if Obamacare repeal had succeeded you probably wouldn be seeing whatever going on in Idaho happening
--:-- Sean Rameswaram: The Trump administration is really the actor you would expect to step in They actually have the authority, if anyone sells one of these plans, to fine that health insurance companies $100 per person per day for each day they're enrolled in that plan.
--:-- Sarah Kliff: Those fines would add up really, really quickly. So they have this tool in their toolbox. they just are deciding not to take it out.
--:-- Sean Rameswaram: And that's a really big authority that they and they alone hold.
--:-- Sarah Kliff: I'm a little curious about the politics of this. Does it feel sort of hypocritical to be up in arms about Idaho, you know, flouting Obamacare, but like down with California legalizing weed?
--:-- Sean Rameswaram: Does it come down to like which states, you know, sticking it to the federal government like suits your politics?
--:-- Sarah Kliff: Sort of. So I think I've definitely seen that raise, this idea that, you know, you can't have it both ways.
--:-- Sean Rameswaram: If you're OK with legal marijuana in California, you have to be OK with illegal Obamacare plans in Idaho.
--:-- Sarah Kliff: I'd say the difference, though, is how health insurance markets work. So when you buy marijuana, that's just like a decision that affects you, basically.
--:-- Sean Rameswaram: You go home, you smoke it, you eat it, you do whatever you do. Public health research suggests like you are not going to be much of a harm to others.
--:-- Sarah Kliff: The decision of where you buy health insurance actually affects others. It can harm other people.
--:-- Sean Rameswaram: So in Idaho, the situation that health experts worry about is that the really healthy and younger people who have low health costs, they're going to gravitate towards these anti-Obamacare plans because they don't have pre-existing conditions.
--:-- Sarah Kliff: They can get a better deal there. And they'll say, great, I'm out of the Obamacare market. the sick and the older people are going to be left behind in the Obamacare market.
--:-- Sean Rameswaram: And they will likely face higher premiums as a result.
--:-- Sarah Kliff: It's not about individual liberty. It also has much wider ripple effects for anyone who buys their own health insurance in Idaho.
--:-- Sean Rameswaram: Flouting the federal government has been great for marijuana sellers. How about insurance providers?
--:-- Sarah Kliff: There is a huge, huge risk for those health insurers who step up and sell these noncompliant plans that doesn't exist as much for the marijuana businesses.
--:-- Sean Rameswaram: And they also could face really significant lawsuits, not from the federal government, but from people who feel like they are harmed by these decisions.
--:-- Sarah Kliff: So one of the surprising things in Idaho is when this announcement came out, I talked to a lot of health experts who thought it was just bluster.
--:-- Sean Rameswaram: They thought no insurance company would be crazy enough to sell these noncompliant plans because there is just so much risk associated with it.
--:-- Sarah Kliff: A week after I had those conversations, the biggest health insurance plan in Idaho, Blue Cross Blue Shield, raised its hand and said, yes, we would like to sell these insurance plans.
--:-- Sean Rameswaram: Really? The plans haven't been sold yet. This one health insurance company wants to start offering them at the beginning of April.
--:-- Sarah Kliff: So we don't actually have someone enrolled in one of these plans now, but we are certainly moving in that direction pretty quickly.
--:-- Sean Rameswaram: And Blue Cross Blue Shield will near certainly face a lawsuit if it sells one of these plans.
--:-- Sarah Kliff: So it would take some sort of individual lawsuit to really test the legality.
--:-- Sean Rameswaram: We won't have any reversal or anything until someone sues them?
--:-- Sarah Kliff: Yeah, and there's a really interesting argument put forward by Nicholas Bagley, who's a great health law scholar at University of Michigan, who isn't even sure if someone's going to have standing to sue them, which actually could insulate these plans in a kind of surprising way.
--:-- Sean Rameswaram: If someone wants to challenge Idaho, they need to prove that they've been harmed.
--:-- Sarah Kliff: It might be a little hard to find the right person to challenge this particular violation of the Affordable Care Act.
--:-- Sean Rameswaram: You could end up in a situation where Idaho makes this decision and courts actually end up rejecting some of the lawsuits because they can't find someone who they feel like has been harmed by it.
--:-- Sarah Kliff: And that's going to be hard because Obamacare isn't a terribly popular thing in Idaho, right?
--:-- Sean Rameswaram: Yeah. So, I mean, I would keep in mind that Idaho is a state that supported President Trump by a wide, wide margin.
--:-- Sarah Kliff: The vast majority of people in Idaho, the vast majority of people in the United States are not enrolled in Obamacare They tend to get their insurance at work through Medicare through other sources So the vast majority of Idaho residents won be affected by this
--:-- Sean Rameswaram: You'll see some of those young, healthy people, they're going to think this is great. Like, I got a good deal because I can pay a cheaper premium.
--:-- Sarah Kliff: But at the same time, like you're suggesting, Sean, you can expect a lot of those stories that really drove the Affordable Care Act to passage in 2010 to kind of play out again in Idaho.
--:-- Sean Rameswaram: But I think at the same time, there's a very strong and favorable political winds towards saying, you know, screw Obamacare.
--:-- Sarah Kliff: They couldn't repeal it. So we in Idaho, you know, we're going to do whatever it is we want to do here.
--:-- Sean Rameswaram: And the vast majority of Idaho residents won't be affected by that decision.
--:-- Sarah Kliff: Turns out Idaho taking apart Obamacare is only one arena of this quiet war. There's another front, and it's coming directly from President Donald Trump.
--:-- Sean Rameswaram: That's coming up on Today Explained.
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--:-- Sean Rameswaram: Again, go to mattressfirm.com slash podcast to learn how your sleeping could be improved. This is Today Explained. I'm Sean Rameswaram.
--:-- Sarah Kliff: So outside of Idaho, are there other ways that this regulatory war is being waged against Obamacare?
--:-- Sean Rameswaram: Oh, there sure are. How many ways are there?
--:-- Sarah Kliff: There are a shocking number when you start looking for them.
--:-- Sean Rameswaram: The Trump administration is now moving to allow health insurers to sell lower cost, less comprehensive medical plans as an alternative to Obamacare.
--:-- Sarah Kliff: The new rules allow people to purchase short-term insurance for up to 12 months, reversing an Obama administration decision, which limited the plans to three months.
--:-- Sean Rameswaram: A short-term health plan is meant to be a transitional source of coverage. Like, let's say you're switching jobs and you're going to be unemployed for two months.
--:-- Sarah Kliff: Transitional plans are generally a little bit skimpier. They're not going to have as good insurance as you had at work, but they're going to have cheaper premiums.
--:-- Sean Rameswaram: Democrats are fuming over this move. Oregon Senator Ron Wyden, for example, is alleging the Trump administration with promoting, quote, junk insurance.
--:-- Sarah Kliff: I'm guessing these short term plans do not comply with Obamacare. They do not comply with Obamacare, just like the Idaho plans.
--:-- Sean Rameswaram: They can charge sick people more. They can exclude pregnancy as a benefit.
--:-- Sarah Kliff: I was looking at one that had all sorts of crazy exclusions, including injuries from rodeo accidents, skydiving, anything related to care of the feet, which felt very important.
--:-- Sean Rameswaram: What? What do they got against feet?
--:-- Sarah Kliff: So I think what they're doing there actually is they're trying to weed out sick people from these transitional plans.
--:-- Sean Rameswaram: People with diabetes often have a lot of issues with their feet. So that's like a secret sort of insurance code for saying we don't want diabetics.
--:-- Sarah Kliff: It's a circuitous way of like seeming sort of non-essential and yet hitting people with diabetes.
--:-- Sean Rameswaram: So these short term plans, they were carved out in the Affordable Care Act.
--:-- Sarah Kliff: The drafters probably weren't big fans of them, but they said, you know what, if people are only going to be on these plans for a handful of months, we'll let these exist in the market, but we going to regulate them super tightly
--:-- Sean Rameswaram: We going to say that people can only buy them for 90 days And after that you going to have to switch to something else
--:-- Sarah Kliff: And that has kind of been the lay of the land. There's an estimated 160,000 people in this market, which is small compared to the 10 million people who buy insurance through Obamacare.
--:-- Sean Rameswaram: What the Trump administration did quite recently is said, we're done with this 90 day limit. We're going to allow these plans to exist for an entire year.
--:-- Sarah Kliff: And we are going to consider letting people renew these plans. You can just keep re-upping?
--:-- Sean Rameswaram: So like, you know how we have open enrollment every year. So those short term plans under Obama, there's no open enrollment. You have it for 90 days. Then you're done. Then you're done. You could switch to another short term plan.
--:-- Sarah Kliff: The Trump administration has said it is reviewing whether it wants to make these plans renewable, and it is definitely extending these plans to last an entire year.
--:-- Sean Rameswaram: Okay, so skydivers, rodeo clowns, and diabetics, they're the only ones heard by this? Who else is affected?
--:-- Sarah Kliff: So in a weird way, low-income people in Obamacare are actually pretty well protected here. One of the things Obamacare does is it provides these pretty generous insurance subsidies for anyone who earns less than 400% to the federal poverty line.
--:-- Sean Rameswaram: So if you're one of those people, you don't actually care if premiums go up.
--:-- Sarah Kliff: If you are someone who is earning more than that, you are the person who gets hit by this.
--:-- Sean Rameswaram: The person I think of getting hurt by this plan is someone who's earning like $60,000 a year, who is a cancer survivor, so they can't get into the short-term market.
--:-- Sarah Kliff: They are just going to have to pay whatever premium increase comes from this decision.
--:-- Sean Rameswaram: So we are not talking about the lowest income Americans, but we are talking about people who have significant health issues who could end up seeing their premiums increase as a result of this decision.
--:-- Sarah Kliff: And does that have an effect on the system as a whole? Yeah. So we just got a report last week from the Urban Institute, a think tank here in D.C. that does support the Affordable Care Act.
--:-- Sean Rameswaram: They estimate that all these different things that are going on, the short-term plans, the end of the individual mandate, those will raise premiums in Obamacare by 18% next year.
--:-- Sarah Kliff: So that's pretty big. Like imagine if your health insurance premiums went up 18%.
--:-- Sean Rameswaram: Yeah, I'd move back to Canada.
--:-- Sarah Kliff: Do you think Obamacare was poorly built because there are now just so many ways to dismantle it? It seems like it was kind of a flawed premise if it's this easy to take it apart.
--:-- Sean Rameswaram: When I think back to 2010, when I was covering the passage of Obamacare, there felt like this sense among Democrats, like we just need to get this thing passed and out there.
--:-- Sarah Kliff: And then like it will be law and it will get implemented. And like things will be fine because like who's going to stand in the way of a program that gives people health insurance?
--:-- Sean Rameswaram: That expectation was so incredibly wrong.
--:-- Sarah Kliff: We can say looking back eight years later, Democrats never anticipated the amount of resistance this law would get from Republicans.
--:-- Sean Rameswaram: And they didn't build a law that is capable to deal with that resistance.
--:-- Sarah Kliff: That's a really key thing to understand about Obamacare. It was not built to manage this partisan battle that has been happening.
--:-- Sean Rameswaram: Now you have a law that doesn't respond especially well to these type of challenges.
--:-- Sarah Kliff: Sarah Cliff writes about healthcare for Vox. And I am the host of The Weeds and the Impact.
--:-- Sean Rameswaram: Sarah, stop. This is my podcast.
--:-- Sarah Kliff: This is Today Explained. Sean, you've got to plug the Twitter.
--:-- Sean Rameswaram: I feel like I'm doing everything around here.
--:-- Sarah Kliff: Oh, yeah, yeah, yeah. The Twitter, I forgot. Follow Today Explained on Twitter at today underscore explained.
--:-- Sean Rameswaram: Great. Thanks, Sarah.
--:-- Sean Rameswaram: Isn't it time to sell some mattresses?
--:-- Sarah Kliff: Oh, you're right. Need a mattress? Get a mattress. Get it at Mattress Firm. They've got all kinds of mattresses. Big ones, little ones, firm ones, soft ones. They've got different colored mattresses.
--:-- Sean Rameswaram: Your budget stretches further when you shop at America's Neighborhood Mattress Store.
--:-- Sarah Kliff: So head to mattressfirm.com slash podcast to learn how you can improve your sleep.
