The Trump administration still has the power to wreak havoc on Obamacare

But will it?

Republicans' latest efforts to overhaul the Affordable Care Act, Barack Obama's health care law, failed in the Senate on the night of July 27th. Three of their Senators - Susan Collins of Maine, Lisa Murkowksi of Alaska and John McCain of Arizona - joined all 48 Democrats to vote down "skinny" repeal. The amendment was the last option available after the Senate earlier rejected both the fuller bill crafted by Mitch McConell, the Senate leader, also the total defunding of Obamacare sought by those on the right of the party. With all three options voted down, the legislative effort to repeal Obamacare looks over for now.

Democrats rejoiced at the news. But is Republicans' cause dead? Yesterday, they announced that they would seek tax reform, their next priority, through "regular order", under which bills require 60 votes to avoid a filibuster in the Senate. That means the budget reconciliation process, which allows one tax and spending bill to pass per year with just 51 votes, could remain reserved for health reform. The question is whether there is any appetite among legislators to go back to the drawing board and then risk another failure. It seems unlikely in the short term. 

Yet the Trump administration has always had the power to change Obamacare without legislative votes. A crucial question is whether it will continue to pay cost-sharing subsidies to insurers. The law says that insurers must limit out-of-pocket expenses for the poorest buyers on Obamacare's insurance exchange; the subsidies compensate firms for the cost. Without the payments, insurers would still have to provide the discounts, but would need to charge much higher premiums to make a profit. They would also face the complexity of having to set one premium for, in effect, two products: high deductibles for most buyers, and low deductibles for poor ones.

To date, the administration has made the payments. But it has created enough uncertainty that insurers are asking for big premium increases next year. That Mr Trump is now promising, in the wake of the Senate vote, to "let Obamacare implode" will do little to calm firms' nerves. Another problem is that a federal court has ruled that the payments are unconstitutional unless Congress approves them, in a case brought by the House of Representatives against the Obama administration. The ruling is on hold pending an appeal. But Mr Trump's administration is the new defendant. Both sides must decide what to do about the case. The simplest solution would be for Congress to appropriate the funds for the subsidies, rendering the case academic but it is unlikely to do so. Republicans often call the payments a "bailout" for insurers. 

Mr Trump could decide not to make the payments. He could also instruct the IRS not to enforce the fine for those who do not buy insurance (the "individual mandate"). That would have the same effect as the "skinny repeal" would have done: a meltdown in the individual insurance market, in which healthy people flee rising premiums, pushing more healthy people out. The irony of this option is that the market would probably continue to function, but only for those low- and middle-income buyers whose premiums are capped. Those who earn too much to qualify for the caps would be the ones left without affordable options. It is exactly this group - many of whom are self-employed - who Republicans say they have been trying to help all along. 

Mr Trump says he could blame Democrats for any exchange death spiral. He may hope that if he uses executive authority to stop the individual market working, voters will not notice. That seems optimistic. Deliberately causing a catastrophe is a risky strategy for a president who - at least in theory - has majorities in Congress.