Trump to issue stop-payment order on health care subsidies
In a move likely to roil America’s insurance markets, President Donald Trump will “immediately” halt payments to insurers under the Obama-era health care law he has been trying to persuade Congress to unravel for months.
Before sunrise Friday, Trump went on Twitter to urge Democrats to make a deal: “The Democrats ObamaCare is imploding,” he wrote. “Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”
The Department of Health and Human Services had made the announcement in a statement late Thursday. “We will discontinue these payments immediately,” said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. Signup season for subsidized private insurance starts Nov. 1, in less than three weeks, with about 9 million people currently covered.
In a separate statement, the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. Officials said a legal opinion from the Justice Department supports that conclusion.
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 subsidies help lower copays and deductibles for people with modest incomes. Halting the payments would trigger a spike in premiums for next year, unless Trump reverses course or Congress authorizes the money. The next payments are due around Oct. 20.
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.”
In a subsequent tweet, Trump asserted, “Obamacare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves.”
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.
“We are prepared to sue,” said California Attorney General Xavier Becerra. “We’ve taken the Trump Administration to court before and won.”
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 GOP health care legislation.