Trump to halt subsidies to health insurers
Bid to kill Obamacare likely to trigger lawsuits, spike in premiums for next year
WASHINGTON — In a brash move likely to roil insurance markets, U.S. President Donald Trump plans to halt payments to insurers under the Obama-era health care law he has been trying to unravel for months.
Two people familiar with the decision described the plan late Thursday night, seeking anonymity because they were not authorized to speak publicly.
The White House said in a statement that the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. However, the administration had been making the payments from month to month, even as Trump threatened to cut them off to force Democrats to negotiate over health care.
The president’s action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorized by federal law, and say the president’s position is reckless. Among the likely consequences: a spike in premiums for next year.
The top two Democrats in Congress sharply denounced the Trump plan in a joint statement.
“It is a spiteful act of vast, pointless sabotage levelled at working families and the middle class in every corner of America,” said House and Senate Democratic leaders Nancy Pelosi of California and Chuck Schumer of New York.
“Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”
Word of Trump’s plan came on a day when the president had also signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama’s Affordable Care Act.
Frustrated over setbacks in Congress, Trump is wielding his executive powers to bring the “repeal and replace” debate to a head. He appears to be following through on his vow to punish Democrats and insurers after the failure of Republican health-care legislation.
On Twitter, Trump has termed the payments to insurers a “bailout,” but it’s unclear if the president will get Democrats to negotiate by stopping payment.
Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year. That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising.
Insurers, hospitals, doctors’ groups, state officials and the U.S. Chamber of Commerce have urged the administration to keep paying.