The Scandalous Truth About Obamacare Is Laid Bare

Authored by Jeffrey Tucker via The Foundation for Economuc Education,

A government program that is ruined by permitting more choice is not sustainable.

It’s not just that Obamacare is financially unsustainable. More seriously, it is intellectually unsustainable, even though this truth has been slow to emerge. This has come to an end with President Trump’s executive order last week.

What does it do? It cuts subsidies to failing providers, yes. It also redefines the meaning of “short term” policies from one year to 90 days. But more importantly–and this is what has the pundit class in total meltdown–it liberalizes the rules for providers to serve health-coverage consumers.

In the words of USA Today: the executive order permits a greater range of choice “by allowing more consumers to buy health insurance through association health plans across state lines.”

The key word here is “allowing” – not forcing, not compelling, not coercing. Allowing.

Why would this be a problem?

Because allowing choice defeats the core feature of Obamacare, which is about forcing risk pools to exist that the market would otherwise never have chosen. If you were to summarize the change in a phrase it is this: it allows more freedom.

The tenor of the critics’ comments on this move is that it is some sort of despotic act.

But let’s be clear: no one is coerced by this executive order. It is exactly the reverse: it removes one source of coercion. It liberalizes, just slightly, the market for insurance carriers.

Here’s a good principle: a government program that is ruined by permitting more choice is not sustainable.

The New York Times predicts:

Employers that remain in the A.C.A. small-group market will offer plans that are more expensive than average, and they will see premiums increase. Only the sickest groups would remain in the A.C.A. regulated risk pool after several enrollment cycles.

Vox puts it this way:

The individuals likely to flee the Obamacare markets for association plans would probably be younger and healthier, leaving behind an older, sicker pool for the remaining ACA market. That has the makings of a death spiral, with ever-increasing premiums and insurers deciding to leave the market altogether.

The Atlantic makes the same point:

Both short-term and associated plans would likely be less costly than the more robust plans sold on Obamacare’s state-based insurance exchanges. But the concern, among critics, is that the plans would cherry-pick the healthiest customers out of the individual market, leaving those with serious health conditions stuck on the Obamacare exchanges. There, prices would rise, because the pool of people on the exchanges would be sicker. Small businesses who keep the more robust plans—perhaps because they have employees with serious health conditions—would also likely face higher costs.

CNBC puts the point about plan duration in the starkest and most ironic terms.

If the administration liberalizes rules about the duration of short-term health plans, and then also makes it easier for people to get hardship exemptions from Obamacare"s mandate, it could lead healthy people who don"t need comprehensive benefits to sign up in large numbers for short-term coverage.

Can you imagine? Letting people do things that are personally beneficial? Horror!

Once you break all this down, the ugly truth about Obamacare is laid bare. Obamacare didn’t create a market. It destroyed the market. Even the slightest bit of freedom wrecks the whole point.

Under the existing rules, healthy people were being forced (effectively taxed) to pay the premiums for unhealthy people, young people forced to pay for old people, anyone trying to live a healthy lifestyle required to cough up for those who do not.

This is the great hidden truth about Obamacare. It was never a program for improved medical coverage. It was a program for redistributing wealth by force from the healthy to the sick. It did this by forcing nonmarket risk pools, countering the whole logic of insurance in the first place, which is supposed to calibrate premiums, risks, and payouts toward mutual profitability. Obamacare imagined that it would be easy to use coercion to undermine the whole point of insurance. It didn’t work.

And so the Trump executive order introduces a slight bit of liberality and choice. And the critics are screaming that this is a disaster in the making. You can’t allow choice! You can’t allow more freedom! You can’t allow producers and consumers to cobble together their own plans! After all, this defeats the point of Obamacare, which is all about forcing people to do things they otherwise would not do!

This revelation is, as they say, somewhat awkward.

What we should have learned from the failure of Obamacare is that no amount of coercion can substitute for the rationality and productivity of the competitive marketplace.

Even if the executive order successfully liberalizes the sector just a bit, we have a very long way to go. The entire medical marketplace needs massive liberalization. It needs government to play even less of a role, from insurance to prescriptions to all choice, over what is permitted to be called health care and who administers it.

Freedom or coercion: these are the two paths. The first works; the second doesn’t.

Obamacare Death Spiral: First 2018 Coverage Map Reveals At Least 47 Counties With No Coverage

Earlier today the Centers for Medicare and Medicaid Services (CMS) released the first projected county-by-county map of Obamacare coverage for the 2018 plan year which depicts at least 47 counties, with 35,000 active Obamacare exchange participants, that will have no health insurance options next year.  Meanwhile, another 2.4 million people are expected to have only 1 option for coverage. Per CMS:

The Centers for Medicare & Medicaid Services (CMS) is releasing a county-level map of 2018 projected Health Insurance Exchanges participation based on the known issuer participation public announcements through June 9, 2017. This map shows that insurance options on the Exchanges continue to disappear. Plan options are down from last year and, in some areas, Americans will have no coverage options on the Exchanges, based on the current data.

The CMS map displays point in time data and is expected to fluctuate as issuers continue to make announcements on exiting or entering specific states and counties. It currently shows that nationwide 47 counties are projected to have no insurers, meaning that Americans in these counties could be without coverage on the Exchanges for 2018. It’s also projected that as many as 1,200 counties - nearly 40% of counties nationwide – could have only one issuer in 2018. Currently, for 2018 at least 35,000 active Exchange participants live in the counties projected to be without coverage in 2018, and roughly 2.4 million Exchange participants are projected to have one issuer.  It’s expected that the number of consumers with no coverage choices will rise.

Of course, insurers are still in the process of determining which markets they"ll serve in 2018 so the map above could theoretically get much worse.  As our readers are acutely aware, the overwhelming trend has been toward more withdrawals rather than less.  Here are just a couple of our recent notes on the topic.

As CMS Administrator Seema Verma points out, CMS and insurance commissioners around the country are working to slow the collapse of Obamacare but unilateral actions are by no means a "long-term solution" for a system which has clearly failed.

“This is yet another failing report card for the Exchanges. The American people have fewer insurance choices and in some counties no choice at all. CMS is working with state departments of insurance and issuers to find ways to provide relief and help restore access to healthcare plans, but our actions are by no means a long-term solution to the problems we’re seeing with the Insurance Exchanges,” said CMS Administrator Seema Verma.

Meanwhile, as Credit Suisse analyst Scott Fidel points out today, Obamacare attrition levels continue to deteriorate year after year...which is probably not terribly surprising given the exponential premium increases.

Paid exchange members are down ~15% from 2017 OEP sign-ups: This afternoon the Centers for Medicare & Medicaid Services (CMS) released the February Effectuated Enrollment Snapshot. Effectuated enrollment (after premiums paid and any attrition) ended February at 10.3 million, or -15.4% below the 2017 Open Enrollment Period’s (OEP) ending number of plan selections of 12.2 mln. These attrition levels are slightly worse than the effectuated enrollment levels one-month following the 2016 and 2015 OEPs, which were down -12.6% (or -14.6% using revised 2016 data per below) and -12.8% respectively.

CMS provides updated & complete 2016 effectuated enrollment: In addition to the February 2017 data, CMS also provided updated and complete 2016 effectuated enrollment data. Recall, the prior administration stopped provided the quarterly effectuated enrollment updates after March 2016. As a result, we estimate that effectuated enrollment ended December 2016 at 9.1 mln, or -28.1% below the 2016 OEP ending plan selections of 12.7 mln. This attrition was worse than the 2015 effectuated enrollment at year-end which was 8.8 mln at December 2015, or -24.9% below the 2015 OEP plan selections of 11.7 mln.

Of course we suspect this stark reminder of the "health" of the exchanges will have a minimal impact on Democrats who will continue to hail the "great accomplishments" of Obamacare while the system literally, and quite tangibly, collapses in epic fashion all around them.  The ability to blindly and shamelessly support a partisan cause irrestpective of overwhelming facts proving the ineffectiveness of that cause is truly a talent reserved only for politicians.

Anthem Drops Obamacare In Ohio: 300,000 Without Insurance? Gruber Strikes Again

Authored by Mike Shedlock via MishTalk.com,

House Speaker Paul Ryan’s attempt to replace Obamacare was sheer madness. Left alone, Obamacare was imploding anyway. Republicans should have waited for Democrats to beg them to “do something”.

Left alone, Obamacare was imploding anyway. Republicans should have waited for Democrats to beg them to “do something”.

Republicans should have waited for Democrats to beg them to “do something”.

Bloomberg reports Insurer’s Obamacare Exit Could Leave 300,000 Without Options.

Anthem Inc.’s decision to quit Ohio’s Obamacare market will leave 13,000 people without any coverage option under the program next year. That number may rise to 300,000 if the health insurer follows suit in the rest of the states where it sells.

Anthem, which currently oversees Affordable Care Act plans for about 1.1 million people in 14 states, is one of the largest of the multistate insurers that hasn’t pulled back sharply from selling individual plans in the ACA. In April, it said it was “assessing our market footprint in 2018,” and on Tuesday the company said it would leave Ohio.

Currently, there are more than 30,000 people with Obamacare plans who are projected not to have an insurer under the program next year, according to data compiled by Bloomberg. An Anthem exit would raise that number to 300,000 people in seven states.

“Planning and pricing for ACA-compliant health plans has become increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules and guidance,” Anthem said of its exit from Ohio. “The lack of certainty of funding for cost sharing reduction subsidies, the restoration of taxes on fully insured coverage and, an increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers.”

Anthem’s Ohio exit will leave 20 counties in the state without an Affordable Care Act coverage option in 2018. Blue Cross Blue Shield of Kansas City said last month it will pull out of the exchange in Missouri, leaving 25 bare counties and about 18,500 people without an ACA coverage option. Humana Inc. said earlier this year it would pull out from all 11 states next year where it currently sells ACA plans. Aetna Inc. said in May it would do the same, also announcing plans to abandon the few remaining states where it had been selling ACA coverage. UnitedHealth Group Inc., the largest U.S. insurer, has already exited ACA exchanges in most of the states where it sold plans. Some small and regional insurers have pulled out of states or counties as well.

If Anthem decided to leave the exchanges nationwide, another 310 counties could be without ACA plans in Colorado, Georgia, Kentucky, Missouri, Nevada and Virginia in addition to Ohio, bringing the total number of bare counties to 355. Anthem did file a rate request in Virginia for next year but could still decide not to sell there.

What if They All Pull Out?

As it stands huge portions of Missouri, Georgia, Nevada, and Kentucky may have no insurance. Smaller, but substantial, portions of Virginia, Ohio, and Colorado may have no insurance.

What would happen if the map was half red?

The New York Times explains in Bare Market: What Happens if Places Have No Obamacare Insurers?

The Obamacare marketplaces can be thought of as a government-run store. The government gives many customers subsidies, like gift cards, that they can use to buy insurance. But what happens if no companies want to sell their products in the store?

If all the insurers start leaving some stores, consumers there will find their options dwindling, and then their subsidies will become worthless. Most would end up uninsured. The problem could affect as few as dozens of customers — or spread more broadly to affect a substantial fraction of the approximately 11 million people currently enrolled in Obamacare coverage.

The markets created by the Affordable Care Act have always relied on the voluntary participation of private companies. If the government set up the right conditions for the market, the thinking went, insurers would want to jump in. But, as Sarah Kliff at Vox.com has reported, the law contained no real backup plan if that vision didn’t work out.

In theory, the bare market problem shouldn’t be a big worry. The federal government pays a large fraction of Obamacare premiums for most customers, and a single insurer can essentially name its price. Economists like Mr. Garthwaite see the situation as a happy circumstance for an insurance company. Who wouldn’t want a monopoly market where the government pays the bills?

“Why be at zero — why not come in and charge a freaking outrageous price and be the one?” said Jonathan Gruber, a health economist at M.I.T who advised the Obama administration when it was developing the Affordable Care Act. Then he answered his own question: “Many mysteries of life can be answered with the statement: Insurers are bizarrely risk-averse.”

If insurers do all decide to exit a market, no one is exactly sure what will happen next. Some experts have brainstormed about possible workarounds, but all would entail uncharted legal territory.

Officials at Covered California, the California state marketplace, produced a white paper outlining a series of options to fix the problem of so-called bare counties. But the top bullet point for nearly every option was: “Very difficult, if not impossible, to implement for 2018.”

Theory, Practice, Gruber

Jonathan Gruber, a health economist at M.I.T who advised the Obama administration, on Obamacare is back at it with his lies, formed innocuously in the form of a question.

“Why not come in and charge a freaking outrageous price and be the one?” asks Gruber. He knows the answer.

If insurers got to name their price, Anthem would not be requesting a hike in Virginia. Rather, Anthem would state it’s new price in Virgina.

If insurers got to name their price, major portions of at least 15 states would not be down to a single insurer.

Gruber on Voter Stupidity

Please consider Obamacare Depended on ‘Stupidity’ of Voters, Its Architect Says.

“Obamacare architect Jonathan Gruber said that lack of transparency was a major part of getting Obamacare passed because ‘the stupidity of the American voter’ would have killed the law if more people knew what was in it,” according to the Caller.

Gruber served as a technical consultant to the Obama administration and is widely recognized as the law’s architect.

But as challenges to the law have surfaced, the administration has sought to distance itself from Gruber, who acknowledged during the panel discussion that the legislation was purposely written in a confusing way to make sure that the Congressional Budget Office did not score the individual mandate as a tax, a part of the law the Supreme Court upheld on the assertion that it was, in fact, a tax.

“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. Okay, so it’s written to do that,” Gruber said.

“In terms of risk rated subsidies, if you had a law which said that healthy people are going to pay in — you made explicit healthy people pay in and sick people get money, it would not have passed… Lack of transparency is a huge political advantage.

“And basically, call it the stupidity of the American voter or whatever, but basically that was really, really, critical to get the thing to pass… Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not,” he said.

The National Review reported in July that Gruber was paid nearly $400,000 to consult with the administration, and that in 2012 he told an audience at a technical management support organization that tax credits were only available in states that set up their own exchanges.

In August, Breitbart News reported that the White House and ranking Congressional Democrats began distancing themselves from Gruber, after a federal appeals court ruled that people who bought their insurance from healthcare exchanges administered by the federal government in 34 states were not eligible for billions of dollars in tax subsidies.

Lies, Deception, Gruber, Obama

We have this tortured mess known as Obamacare thanks to purposeful lies and deception by Gruber and Obama.

Now, thanks to Republican silliness from House Peaker Ryan and Trump with their push for a replacement that no one is happy with, Republicans took sponsorship of the mess.

Trump Saves Obamacare Again... For Now

The Trump administration and the House have officially asked for another 90 days to work out a lawsuit over subsidies that help poorer people afford to use their Obamacare insurance plans, further delaying a long-running legal fight that’s already destabilizing the health law.

As Axio snotes, the key point is - "The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action."

Full motion below...

Bloomberg continues...

Without the payments, insurers have threatened to drop out of Obamacare or substantially raise premiums, and customers could face thousands of dollars in unexpected costs. The Trump administration could still choose to drop the appeal, though other parties are attempting to take up defense of the payments.

State officials, the health industry and Democrats in Congress have pushed for the payments to continue, saying that ending them would upend the insurance market and cost millions of people their health insurance.

“We need swift action and long-term certainty on this critical program,” Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, said in an email.

“It is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care.”

The group is one of the main lobbying associations for health insurers.

However, as Bloomberg reports, while the latest delay is a reprieve for Obamacare, it does little to resolve the underlying uncertainty created by the case and by Republican efforts in Congress to repeal and replace large parts of the law. Health insurers are in the midst of deciding whether to participate in the Affordable Care Act next year, and what to charge customers. Some have already said they’ll raise premiums in 2018 because of uncertainty around the subsidies.

Trump previously threatened to use the CSR payments as a bargaining chip to bring Democrats to the table on health care if Republicans can’t muster enough repeal votes in the Senate. He also tried to use them as leverage to gain funding for a border wall with Mexico, saying he’d give Democrats a dollar in CSR money for every dollar for the wall.

Of course,  the Democrats had plenty to say...

Senate Majority Leader Chuck Schumer said the decision to continue the funding showed the administration knows that continuing the payments is the right thing to do. He criticized the uncertainty from Trump on their future.

"Unfortunately, by kicking the can down the road once again, the administration is continuing to sow uncertainty in the markets that will hurt millions of Americans," Schumer said in a statement. "Instead of hemming and hawing, they ought to step up to the plate and say once and for all that they will make these payments permanently, which help millions of Americans pay less for their health care."

House Democratic Leader Nancy Pelosi, of California, criticized the action to delay the lawsuit further rather than resolve it once and for all.

“Republicans cynically continue to sow uncertainty in the health coverage of millions of Americans,” Pelosi said in a statement. “At a critical period when insurers are deciding premiums for next year, Republicans are pouring uncertainty into the health insurance marketplaces.”

While the delay will move the next update for the case to mid-August, the deadline for insurers to submit their 2018 plans for Obamacare" exchanges in most states is June 21.

Aetna CEO Says Obamacare In "Death Spiral" And "It's Getting Worse"

Back in the summer of 2016, as Obamacare rates were being set for the 2017 plan year, we repeatedly argued that the entire system was on the "verge of collapse" as premiums were soaring, risk pools were deteriorating and insurers were pulling out of exchanges all around the country leaving many Americans with just a single "option" for health insurance (see "Obamacare On "Verge Of Collapse" As Premiums Set To Soar Again In 2017").

And while Democrats may be all too willing to quickly dismiss our analysis, they may want to listen to the warnings of the CEO of one of the country"s largest health insurers who says that Obamacare is in a "death spiral."  In speaking with the Wall Street Journal, Aetna CEO Mark Bertolini said, among other things, that the "risk pools are deteriorating in the ACA" to a point that it would inevitably result in more withdrawals this year.   Per The Hill:

"It"s not going to get any better; it"s getting worse."

"That logic shows just how much the risk pools are deteriorating in the ACA," Bertolini said.

He added: "I think you will see a lot more withdrawals this year. ... There isn"t enough money in the ACA as structured, even with the fees and taxes, to support the population that needs to be served."

"It is in a death spiral," he said, but did not say whether Aetna would participate in the exchanges in 2018.

And, while his commentary was mostly doom and gloom, if there was one silver lining from Bertolini"s interview, it was his acknowledgement that at least "mathematics education in the United States is working" since consumers seem to be able to run the simple math required to figure out that paying ~$12,000 per year in premiums for a family of 4, plus $6,000 in deductibles, all for a service they never use, is a bad deal.

"You know that mathematics education in the United States is working when someone says, let me see, i"m going to pay this much premium, i"ve got a $6,000 deductible, and when I go to the doctor i"m going to pay cash...so premium, plus deductible, plus paying cash...why do I do this?  I"ll just pay the penalty and move on."

"And so that risk keeps leaving and risk inside the pool keeps getting worse...the rates continue to chase it...and the participants start to leave, either at the bottom of the risk pool or the plans themselves."

Of course, Bertolini"s comments today followed yesterday"s announcement from Humana that, due to an "unbalanced risk pool" (i.e. not enough healthy, young people paying massive premiums to balance out the risk of older, sicker customers), they would be pulling out of all Obamacare exchanges nationwide in 2018.  Per Humana"s press release:

Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.

All of these actions were taken with the expectation that the company’s Individual Commercial business would stabilize to the point where the company could continue to participate in the program. However, based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided that it cannot continue to offer this coverage for 2018. Through the remainder of 2017, Humana remains committed to serving its current members across 11 states where it offers Individual Commercial products. And, as it has done in the past, Humana will work closely with its state partners as it navigates this process.

Meanwhile, Trump seized on the announcement saying that as "Obamacare continues to fail" his administration would "repeal, replace & save healthcare for ALL Americans."

Obamacare continues to fail. Humana to pull out in 2018. Will repeal, replace & save healthcare for ALL Americans. https://t.co/glWEQ0lNR4

— Donald J. Trump (@realDonaldTrump) February 14, 2017

Frankly, we"re shocked at all of this!  Turns out that whole "adverse selection bias" was a real thing...who could have known? 

IRS Deals Major Blow To Obamacare Mandate

Submitted by Peter Suderman via Reason.com,

The tax agency has stopped requiring individual filers to indicate whether they maintained health coverage or paid the mandate penalty as required under the law

How much difference does a single line on a tax form make? For Obamacare"s individual mandate, the answer might be quite a lot.

Following President Donald Trump"s executive order instructing agencies to provide relief from the health law, the Internal Revenue Service appears to be taking a more lax approach to the coverage requirement.

The health law"s individual mandate requires everyone to either maintain qualifying health coverage or pay a tax penalty, known as a "shared responsibility payment." The IRS was set to require filers to indicate whether they had maintained coverage in 2016 or paid the penalty by filling out line 61 on their form 1040s. Alternatively, they could claim exemption from the mandate by filing a form 8965.

For most filers, filling out line 61 would be mandatory. The IRS would not accept 1040s unless the coverage box was checked, or the shared responsibility payment noted, or the exemption form included. Otherwise they would be labeled "silent returns" and rejected.

Instead, however, filling out that line will be optional.

Earlier this month, the IRS quietly altered its rules to allow the submission of 1040s with nothing on line 61. The IRS says it still maintains the option to follow up with those who elect not to indicate their coverage status, although it"s not clear what circumstances might trigger a follow up.

But what would have been a mandatory disclosure will instead be voluntary. Silent returns will no longer be automatically rejected. The change is a direct result of the executive order President Donald Trump issued in January directing the government to provide relief from Obamacare to individuals and insurers, within the boundaries of the law.

"The recent executive order directed federal agencies to exercise authority and discretion available to them to reduce potential burden," the IRS said in a statement to Reason. "Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn"t indicate their coverage status."

The tax agency says the change will reduce the health law"s strain on taxpayers. "Processing silent returns means that taxpayer returns are not systemically rejected, allowing them to be processed and minimizing burden on taxpayers, including those expecting a refund," the IRS statement said.

The change may seem minor. But it makes it clear that following Trump"s executive order, the agency"s trajectory is towards a less strict enforcement process.

Although the new policy leaves Obamacare"s individual mandate on the books, it may make it easier for individuals to go without coverage while avoiding the penalty. Essentially, if not explicitly, it is a weakening of the mandate enforcement mechanism.

"It"s hard to enforce something without information," says Ryan Ellis, a Senior Fellow at the Conservative Reform Network.

The move has already raised questions about its legality. Federal law gives the administration broad authority to provide exemptions from the mandate. But "it does not allow the administration not to enforce the mandate, which it appears they may be doing here," says Michael Cannon, health policy director at the libertarian Cato Institute. "Unless the Trump administration maintains the mandate is unconstitutional, the Constitution requires them to enforce it."

"The mandate can only be weakened by Congress," says Ellis. "This is a change to how the IRS is choosing to enforce it. They will count on voluntary disclosure of non-coverage rather than asking themselves."

The IRS notes that taxpayers are still required to pay the mandate penalty, if applicable. "Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe‎," the agency statement said.

Ellis says the new policy doesn"t fully rise to the level of declining to enforce the law. "If the IRS turns a blind eye to people"s status, that isn"t quite not enforcing it," he says. "It"s more like the IRS wanting to maintain plausible deniability."

Tax software companies are already making note of the change.  Drake Software, which provides services to tax professionals, recently sent out a notice explaining the change in policy. As of February 3, the notice said, the IRS "will now accept an e-filed return that does not indicate either full-year coverage or an individual shared responsibility payment or does not include an exemption on Form 8965, as required by IRS instructions, Form 1040, line 61."

The mandate is a key component of Obamacare"s coverage scheme, which is built on what experts sometimes describe as a "three-legged stool." The law requires health insurers to sell to all comers regardless of health history, and offers subsidies to lower income individuals in order to offset the cost of coverage. In order to prevent people from signing up for coverage only after getting sick, it also requires most individuals to maintain qualifying coverage or face a tax penalty. While defending the health law in court, the Obama administration maintained that the mandate was essential to the structure of the law, designed to make sure that people did not take advantage of its protections.

In a 2012 case challenging the law"s insurance requirement, the Supreme Court ruled that the individual mandate was constitutional as a tax penalty. The IRS is in charge of collecting payments.

Some health policy experts have argued that the mandate was already too weak to be effective, as a result of the many exemptions that are included. A 2012 report by the consulting firm Milliman found that the mandate penalty offered only a modest financial incentives for families making 300-400 percent of the federal poverty line. More recently, health insurers have said that individuals signing up for coverage and then quickly dropping it after major health expenses is a key driver of losses, and rising health insurance premiums.

It"s too early to say whether the change will ultimately make any difference. But given the centrality of the mandate to the law"s coverage scheme and the unsteadiness of the law"s health insurance exchanges, with premiums rising and insurers scaling back participation, it is possible that even a marginal weakening of the mandate could cause further dysfunction. Health insurers have said the mandate is a priority, and asked for it to be strengthened. Weaker enforcement of the mandate could cause insurance carriers to further reduce participation in the exchanges. One major insurer, Humana, said today that it would completely exit Obamacare"s exchanges after this year.

It is also possible that congressional Republicans will make it moot by repealing much of the law, including its individual mandate, which, as a tax, can be taken down with just 51 Senate votes.

Regardless of its direct impact, however, the change may signal that the Trump administration intends to water down enforcement of the health law"s most controversial requirement, even if those steps are seemingly small. The Trump administration may not be tearing Obamacare down entirely, but it appears to be taking steps to weaken the law, however subtly, one line at a time.

Correction: The IRS did not reject silent returns last year, as this story originally indicated. The plan was to go into effect this year, for 2016 returns, but the IRS reversed course on February 3. Reason regrets the error.

Aetna's Takeover Of Humana Blocked As Anticompetitive

Back in August, we reported of a fascinating case of crony capitalism, whereby Aetna gave the DOJ a not too subtle ultimatum which boiled down to the following: "If the Humana deal is blocked, we exit Obamacare."

Well, be careful what you wish for, because six months later, and with Obamacare well on its way out, moments ago a US federal judge blocked Aetna"s $37 billion deal to buy rival insurer Humana, thwarting one of two large mergers that would reshape the U.S. health-care landscape. The judge"s ruling, which was filed in Federal court in Washington, said the deal would be "anticompetitive"adding that the deal  would have hurt competition among insurers.

U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition.

The judge said the transaction could mean higher prices and reduced services for seniors who purchase the private Medicare plans known as Medicare Advantage. He also said the merger would harm competition on public insurance exchanges in parts of Florida.  With the deal now scrapped, Aetna will owe Humana a $1 billion breakup fee.

Of course, with Obamacare on its way out, it would not be a surprise if the insurance companies would not have quietly preferred that the deal was blocked. For now, however, the shareholders of Aetna are less than excited, sending the stock of the company nearly 3% lower, while Humana was rebounded to almost unchanged after plunging as much as 7% in kneejerk reation.