Trump to scrap subsidies, hitting Obamacare again
WASHINGTON >> President Donald Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.
The twin hits to the Affordable Care Act -— on successive days -— could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Trump appears determined to dismantle it on his own. Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies are cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.
“The government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement.
It concluded: “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
In a joint statement, the top Democrats in Congress, Sen. Chuck Schumer of New York and Rep. Nancy Pelosi of California, said Trump had “apparently decided to punish the American people for his inability to improve our health care system.” “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “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.” Lawmakers from both parties have urged the president to continue the payments. Trump had raised the possibility of eliminating the subsidies at a White House meeting with Republican senators several months ago. At the time, one senator told him that the Republican Party would effectively “own health care” as a political issue if the president did so. “Cutting health care subsidies will mean more uninsured in my district,” Rep. Ileana Ros-Lehtinen, R-Fla., wrote on Twitter late Thursday. She added that Trump “promised more access, affordable coverage. This does opposite.”
But Speaker Paul D. Ryan, R-Wis., praised Trump’s decision and said the Obama administration had usurped the authority of Congress by paying the subsidies. “Under our Constitution,” Ryan said, “the power of the purse belongs to Congress, not the executive branch.”
The future of the payments has been in doubt because of a lawsuit filed in 2014 by House Republicans, who said the Obama administration was paying the subsidies illegally. Judge Rosemary M. Collyer of the U.S. District Court in Washington agreed, finding that Congress had never appropriated money for the cost-sharing subsidies. The Obama administration appealed the ruling. The Trump administration has continued the monthly payments, even though Trump has made clear that he detests the payments and sees them as a bailout for insurance companies.
The decision to end the subsidies came on the heels of Trump’s executive order, which he signed earlier Thursday.
President Donald Trump signed an executive order on health care Thursday in the Roosevelt Room of the White House.