Trump moves to halt subsidies to health insurers

WASHINGTON: In a brash move likely to roil insurance markets, President Donald Trump plans to halt payments to insurers under the Obama-era healthcare law that 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 authorised 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 authorisation by Congress.

The administration has been making the payments from month to month, even as Trump threatened to cut them off to force Democrats to negotiate over healthcare.

The president’s action is likely to trigger a lawsuit from state attorneys-general, who contend the subsidies to insurers are fully authorised by federal law, and the president’s position is reckless.

Word of Trump’s plan came on a day when the president had signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama’s Afford- able Care Act.

Frustrated over setbacks in Congress, Trump is wielding his executive power 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 healthcare legislation.

On Twitter, Trump has termed the payments to insurers a “bailout”, and administration officials have questioned their legal authorisation.

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 dou- ble-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 US Chamber of Commerce have urged the administration to keep paying.

Leading GOP lawmakers have also called for continuing the payments to insurers, at least temporarily, so constituents maintain access to health insurance.

Senate Health, Education, Labour and Pensions Committee Chairman Lamar Alexander is working on such legislation.

The so-called “cost-sharing” subsidies defray out-of-pocket expenses for people with low-to-modest incomes, and can reduce a deductible of US$3,500 (RM14,759) to a few hundred dollars.

Assistance is available to consumers buying individual policies; people with employer coverage are unaffected by the dispute.

Nearly three in five HealthCare. gov customers qualify for help, an estimated six million people or more. The annual cost to the government is currently about US$7bil (RM29.5bil). — AP