Trump to scrap health in­sur­ers’ sub­si­dies in blow to Obamacare

Houston Chronicle - - FRONT PAGE - By Amy Gold­stein

WASH­ING­TON — Pres­i­dent Don­ald Trump is throw­ing a bomb into the in­sur­ance mar­ket­places cre­ated un­der the Af­ford­able Care Act, choos­ing to end crit­i­cal pay­ments to health in­sur­ers that help mil­lions of lower-in­come Amer­i­cans af­ford cov­er­age. The de­ci­sion fol­lows an ex­ec­u­tive or­der on Thurs­day to al­low al­ter­na­tive health plans that skirt the law’s re­quire­ments.

The White House con­firmed late Thurs­day that it would halt fed­eral pay­ments for cost-shar­ing re­duc­tions, al­though a state­ment did not spec­ify when. Ac­cord­ing to two peo­ple briefed on the de­ci­sion, the cut­off will be as of Novem­ber. The sub­si­dies to­tal about $7 bil­lion this year.

Trump has threat­ened for months to stop the pay­ments, which help el­i­gi­ble con­sumers af­ford their de­ductibles and other out-of­pocket ex­penses, but held

off while other ad­min­is­tra­tion of­fi­cials warned him that such a move would cause an im­plo­sion of the ACA mar­ket­places that could be blamed on Repub­li­cans.

Health in­sur­ers and state reg­u­la­tors have been in high anx­i­ety over the prospect of the mar­ket­places cra­ter­ing be­cause of such White House ac­tion. The fifth year’s open-en­roll­ment sea­son for con­sumers to buy cov­er­age through ACA ex­changes will open in less than three weeks, and in­sur­ers have said that stop­ping the cost-shar­ing pay­ments would be the sin­gle great­est step the Trump ad­min­is­tra­tion could take to harm the mar­ket­places — and the law.

End­ing the pay­ments is grounds for any in­surer to back out of its fed­eral con­tract to sell health plans for 2018.

The cost-shar­ing re­duc­tions have long been the sub­ject of a po­lit­i­cal and le­gal see­saw. Con­gres­sional Repub­li­cans ar­gued that the sprawl­ing 2010 health care law that es­tab­lished the sub­si­dies does not in­clude spe­cific lan­guage pro­vid­ing ap­pro­pri­a­tions to cover the gov­ern­ment’s cost. House Repub­li­cans sued HHS over the pay­ments dur­ing for­mer Pres­i­dent Barack Obama’s sec­ond term. A fed­eral court agreed that they were il­le­gal, and the case has been pend­ing be­fore the U.S. Court of Ap­peals for the D.C. Cir­cuit.

“The bailout of in­sur­ance com­pa­nies through these un­law­ful pay­ments is yet an­other ex­am­ple of how the pre­vi­ous ad­min­is­tra­tion abused tax­payer dol­lars and skirted the law to prop up a bro­ken sys­tem,” a state­ment from the White House said. “Congress needs to re­peal and re­place the dis­as­trous Obamacare law and pro­vide real re­lief to the Amer­i­can peo­ple.”

For months, ad­min­is­tra­tion of­fi­cials have de­bated pri­vately about what to do. The pres­i­dent has con­sis­tently pushed to cut them off, ac­cord­ing to of­fi­cials and ad­vis­ers who spoke on the con­di­tion of anonymity to dis­cuss pri­vate con­ver­sa­tions. Some top health of­fi­cials within the ad­min­is­tra­tion, in­clud­ing for­mer Health and Hu­man Ser­vices Sec­re­tary Tom Price, cau­tioned that this could ex­ac­er­bate al­ready es­ca­lat­ing pre­mi­ums on the ACA mar­ket, these Repub­li­cans said.

But some gov­ern­ment lawyers also ar­gued that the pay­ments were not au­tho­rized un­der the ex­ist­ing law, ac­cord­ing to one of­fi­cial, and would be dif­fi­cult to keep de­fend­ing in court.

While the ad­min­is­tra­tion now will ar­gue that Congress should ap­pro­pri­ate the funds if it wants them to con­tinue, such a pro­posal will face a se­ri­ous hur­dle on Capi­tol Hill. In a re­cent in­ter­view, Rep. Tom Cole, R-Okla., who chairs the House Ap­pro­pri­a­tions Sub­com­mit­tee over­see­ing HHS, said it would be dif­fi­cult to muster sup­port for such a move among House con­ser­va­tives.

One per­son fa­mil­iar with the pres­i­dent’s de­ci­sion said that HHS of­fi­cials and Trump’s do­mes­tic pol­icy ad­vis­ers had urged him to con­tinue the pay­ments at least through the end of the year.

The cost-shar­ing pay­ments are sep­a­rate from a dif­fer­ent sub­sidy that pro­vides fed­eral as­sis­tance on pre­mi­ums to more than four­fifths of the 10 mil­lion Amer­i­cans with ACA cov­er­age.

Word of the pres­i­dent’s de­ci­sion came just hours af­ter he signed the ex­ec­u­tive or­der in­tended to cir­cum­vent the ACA by mak­ing it eas­ier for in­di­vid­u­als and small busi­nesses to buy al­ter­na­tive types of health in­sur­ance with lower prices, fewer ben­e­fits and weaker gov­ern­ment pro­tec­tions.

The White House and al­lies por­trayed the pres­i­dent’s move as wield­ing ad­min­is­tra­tive pow­ers to ac­com­plish what con­gres­sional Repub­li­cans have failed to achieve: fos­ter­ing more cov­er­age choices while tear­ing down the law’s in­sur­ance mar­ket­places. Un­til the White House’s an­nounce­ment late Thurs­day, the ex­ec­u­tive or­der rep­re­sented Trump’s big­gest step to date to re­verse the health care poli­cies of the Obama ad­min­is­tra­tion, a cen­tral prom­ise since last year’s pres­i­den­tial cam­paign.

Jabin Bots­ford / Wash­ing­ton Post

Pres­i­dent Trump signed an ex­ec­u­tive or­der Thurs­day that al­lows for cheaper, less reg­u­lated health plans.

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