Insurers to receive subsidies
Trump cut threat is off for August
WASHINGTON — The government will make this month’s payments to insurers under the 2010 health care law that President Donald Trump still wants to repeal and replace, a White House official said Wednesday.
Trump has repeatedly threatened to end the payments, which help reduce health insurance copayments and deductibles for people with modest incomes but remain under a legal cloud.
A White House spokesman said “the August payment will be made,” insisting on anonymity to discuss the decision ahead of the official announcement. The so-called cost-sharing subsidies total about $7 billion this year and are considered vital to guarantee stability for consumers who buy their own individual health insurance policies.
Insurers have said they want the administration to do more and to guarantee the payments at least through next year.
Leading Republican members of Congress, too, have pressed the administration to keep making the payments, fearing that any move to cut them off would cause chaos in insurance markets. Trump has said voters would blame Democrats for any problems with the markets, but few Republican elected officials share that view.
The announcement of this month’s payment, which will total about $600 million, drew praise from Sen. Lamar Alexander, R-Tenn., the head of the Senate committee that handles health care legislation.
“State insurance commissioners have warned that abrupt cancellation of cost-sharing subsidies would cause premiums, copays and deductibles to increase and more insurance companies to leave the markets,” Alexander said.
The decision to continue the subsidies “helps 18 million Americans who … don’t get insurance
from the government or on the job,” Alexander said in a statement.
When Congress returns from its recess in September, lawmakers should quickly pass legislation that would continue the payments through next year, Alexander said, echoing the calls made by insurers.
The continuation should be linked to changes in the current law to “give states more flexibility” on the kinds of insurance policies that consumers can buy, he added.
The Congressional Budget Office reported this week that premiums for a popular type of individual health care plan under the Patient Protection and Affordable Care Act would rise sharply and that more people would be left without options for coverage if Trump made good on his threat to stop the payments. Moreover, ending the payments would only increase federal deficits, since it would trigger a rise in separate health law subsidies for premiums, wiping out any potential savings.
The subsidies are snared in a legal dispute over whether the health care law passed under President Barack Obama properly approved the payments to insurers. Adding to the confusion, other parts of
the law clearly direct the government to reimburse the carriers.
The disagreement is over whether the law properly provided a congressional “appropriation,” similar to an instruction for the Treasury to pay the money. The Constitution says the government shall not spend money unless Congress appropriates it.
House Republicans trying to thwart the health law sued the Obama administration in federal court in Washington, arguing that it lacked specific language appropriating the cost-sharing subsidies.
A district judge agreed with House Republicans, and the case has been on hold before the U.S. appeals court in Washington.
For months, Trump has been raising the prospect of terminating payments as a way to trigger a crisis and get Democrats to negotiate on a health care bill.
After the GOP drive to repeal the Affordable Care Act collapsed, the president tweeted: “As I said from the beginning, let ObamaCare implode, then deal. Watch!”
Trump elaborated in another tweet, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies … will end very soon!”
Sen. Patty Murray, D-Wash., who is working with Alexander to hold bipartisan hearings next month, said Trump should clear up the uncertainty for good.
“People shouldn’t have to wonder each month whether President Trump is going to throw the health care system into chaos and cause premiums to spike,” she said.