Health and Science

Trump's health chief pushes 'waivers' for states from Obamacare rules, as HHS says program in 'death spiral'

Key Points
  • A new checklist tool will help states apply for waivers to set up high-risk insurance pools for sicker residents.
  • HHS, the agency that implements Obamacare, says the program "continues to collapse."
  • Trump administration moves are being blamed for contributing to requests for big insurance price hikes in 2018.
Tom Price, U.S. secretary of Health and Human Services (HHS), speaks during a press conference in the Rose Garden of the White House in Washington, D.C., on Thursday, May 4, 2017.
Andrew Harrer | Bloomberg | Getty Images

The U.S. Health and Human Services Department — which oversees the Obamacare law — released a new tool Tuesday to help states seek waivers from certain Obamacare rules, as the department continued the Trump administration's push to undercut the Affordable Care Act.

The new tool is meant to help states complete applications that could allow them to set up high-risk pools for sicker residents and establish state-operated reinsurance programs.

HHS Secretary Tom Price said the checklist for states seeking waivers could help "provide Americans relief from the damage Obamacare continues to inflict on health insurance markets."

"The failure of the individual marketplaces under Obamacare is driving insurers out of counties and states at an alarming rate, leaving millions of Americans without choices for affordable health insurance," Price said.

Cuban: Health-care is screwed
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In touting the new tool, Seema Verma, the administrator for the federal Centers for Medicare and Medicaid Services, also cited double-digit price hikes for Obamacare plans this year, and the departure of insurers from some markets.

At the same time Tuesday, HHS's national spokeswoman in an email to reporters highlighted a New York Post story about potential double-digit percentage price hike requests for Obamacare rates in New York State in 2018.

The spokeswoman, Alleigh Marre, wrote that "Obamacare continues to collapse," and that "Obamacare has been in a death spiral for years."

And Marre wrote that "with new examples of Obamacare's collapse each day, Republicans are reforming healthcare so it delivers access to quality, affordable coverage to the American people."

Marre last week sent out another email that also cited Republican "efforts to reform healthcare," and noted Aetna's complete exit from Obamacare markets next year, and high rate hike requests in Connecticut and Maryland.

While Marre's email on Tuesday quoted parts of the New York Post story about high price hikes that could be coming in the Empire State, it did not mention several big reasons given in that same article for those potential premium increases.

"The driving forces would include an underlying increase in health care costs, the Trump administration's repeated threats to withhold $8 billion in promised subsidies, and uncertainty about ObamaCare's future, given the attempts to repeal and replace it with something very different," Bill Hammond, health policy director at the Empire Center for Public Policy, told The Post.

The Post article also noted that "Hammond said another factor is that President Trump's Internal Revenue Service is signaling weaker enforcement of the tax penalties for not carrying insurance — the individual mandate — which could cause some younger, healthier people to drop coverage, leaving behind a costlier risk pool of older and sicker subscribers."

Both Marre's email and the new checklist for the waiver approval process came a day after CMS, a major division of HHS, proposed stopping the use of the federal Obamacare marketplace to handle enrollment in insurance plans by small businesses for their workers.

The moves reflect a radical shift at HHS since the January inauguration of President Donald Trump. HHS oversees the implementation of Obamacare, and operates, which continues to enroll people in private individual insurance plans sold in 34 states. Under the Obama administration, HHS was the primary cheerleader for the ACA.

Meaghan Smith, who had been communications director of HHS during the Obama administration, told CNBC that, "The Trump Administration's continued politicization and sabotage of health care is not only inappropriate, it is increasing costs for people and destabilizing the market."

"The campaign is over and while it's hard to tell, HHS is not actually supposed to be a political arm of the RNC [Republican National Committee]," said Smith, currently spokeswoman for the Protect Our Care Campaign, a group that opposes Obamacare repeal efforts.

"HHS's role is to implement the law of the land, which includes the Affordable Care Act, not sabotage health care programs that millions of Americans rely on," Smith said.

Smith also said historically, "political statements" about Obamacare and other government programs have "always been made out of the White House," and not by the federal departments, such as HHS, that oversee those programs.

Andrew Bates, a spokesman for the progressive advocacy group American Bridge, said, "The Trump Administration is lying to the public."

"In reality, they are working to undermine the Affordable Care Act marketplaces, which could needlessly force higher prices onto millions of people," Bates said. "This is all being done because they are hell-bent on passing 'Trumpcare,' which would cost 26 million Americans their health insurance and gut coverage for preexisting conditions just to cut taxes for the rich."

In January, the Trump administration and HHS was harshly criticized by the former CEO of, Kevin Counihan, for a decision to pull back a multimillion-dollar ad and outreach campaign designed to spur signups in insurance plans in the final days of Obamacare enrollment. That pullback was blamed for a drop in sign-ups on of more than 4 percent compared to last year.

In February, it was revealed that HHS had scrubbed its website of positive words about Obamacare.

HHS chief Price is an avowed opponent of the ACA, and while serving as a Republican congressman from Georgia submitted legislation that sought to repeal the law and replace it with new legislation.

Since his appointment as HHS secretary by Trump, Price has lobbied for passage in Congress of the American Health Care Act, the Republican-crafted bill that seeks to repeal and replace key parts of Obamacare. The bill was passed by a single vote in early May by the House, and is now being considered by the Senate.

The Congressional Budget Office estimated that an earlier version of the bill would lead to 24 million more people becoming uninsured by 2026 than would be the case if Obamacare remained intact. CBO also projected that individual insurance rates would spike by 15 to 20 percent next year and in 2019 than they would if Obamacare stayed as is.

The Senate has yet to either amend the AHCA or craft its own version of health-care legislation that could significantly modify Obamacare.

Price in March announced a willingness, even without passage of an Obamacare replacement as of yet, to give states leeway in complying with certain requirements of the ACA.

The ACA, by law, allows for states to petition for so-called 1332 State Innovation Waivers.

In a March 13 letter to state governors encouraging them to use the waivers, Price wrote that those waivers can let states "pursue innovative strategies to adapt many of the law's requirements to suit the state's specific needs."

"To receive approval, the state must demonstrate that a proposed waiver will provide access to quality health care that is at least as comprehensive and affordable as would be provided without the waiver, will provide coverage to at least a comparable number of residents of the state as would be provided coverage without a waiver, and will not increase the federal deficit," Price wrote.

Larry Levitt, an Obamacare expert at the Kaiser Family Foundation, said "These waivers are an intriguing opportunity for states to access federal funds for reinsurance arrangements that can lower premiums."

"States would still have to kick in some money of their own, but those state funds would leverage federal dollars," Levitt said.

"However, the timing of this push for states to submit waivers under the ACA is somewhat odd, given that the administration is pushing to repeal and replace the law at the same time," he said.

Levitt noted that $15 billion that would be set aside in the Republican repeal bill's "stability fund for 2018 could make these state innovation waivers moot if the bill became law."