This post offers data to support a claim I make in today’s Wall Street Journal that codifying the health insurance relief that President Trump issued in 2018 would make health insurance affordable for millions without increasing federal spending or disrupting Obamacare.
Like the relief President Obama granted US territories in 2014 (which continues to this day), Trump’s 2018 final rule freed consumers from Obamacare’s costliest health insurance regulations. The Trump rule thus made comprehensive coverage available to consumers at premiums 60 percent below the lowest-price Obamacare plans. Federal courts upheld the Trump rule as a valid interpretation of current law. The Biden administration nevertheless revoked it, cutting millions off from affordable coverage.
Congress can make health insurance affordable for millions, without spending a dime, by codifying the Trump rule.
Critics claim that codifying the Trump rule would destabilize Obamacare through adverse selection: healthy Obamacare enrollees would choose more affordable coverage; Obamacare pools would get sicker; Obamacare premiums would rise; Obamacare enrollments would fall as more healthy people dropped out; and the cycle would repeat itself.
If the Trump rule would have had those effects, it would have produced those effects during the six years it was in place. Spoiler alert: it didn’t.
The first graph shows that while the Trump rule was in effect from 2018 to 2024, Obamacare premiums remained flat or even fell. Obamacare’s largest premium spikes occurred before the Trump rule took effect (average annual increase before 2018: 20 percent) and after Biden revoked it (cumulative increase since 2024: 31 percent).
The second graph shows that while the Trump rule was in effect, Obamacare enrollment doubled.
We have already conducted a real-world test of the effect that freeing consumers to choose their own health plans would have on Obamacare. Contrary to the critics’ fears, Obamacare did just fine. The only evidence of an adverse-selection death spiral occurred while the Trump rule was not in effect.
Congress should codify the Trump rule.