Trump to halt sub­si­dies to health in­sur­ers

Lodi News-Sentinel - - Front Page - By Ken Thomas and Cather­ine Lucey

WASH­ING­TON — In a move likely to roil in­sur­ance mar­kets, Pres­i­dent Don­ald Trump will “im­me­di­ately” halt pay­ments to in­sur­ers un­der the Oba­maera health care law he has been try­ing to un­ravel for months.

The Health and Hu­man Ser­vices depart­ment made the an­nounce­ment in a state­ment late Thurs­day night. “We will dis­con­tinue th­ese pay­ments im­me­di­ately,” said act­ing HHS Sec­re­tary Eric Har­gan and Medi­care ad­min­is­tra­tor Seema Verma.

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.

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 lev­eled 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.”

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.

On Twit­ter, Trump has termed the pay­ments to in­sur­ers a “bailout,” but 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 dou­ble-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 U.S. 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, La­bor and Pen­sions Com­mit­tee Chair­man La­mar Alexan­der, R-Tenn., is work­ing on such leg­is­la­tion with Demo­cratic Sen. Patty Mur­ray of Wash­ing­ton.

The so-called “cost-shar­ing” sub­si­dies de­fray co­pays and de­ductibles for peo­ple with low-to-mod­est in­comes, and can re­duce a de­ductible of $3,500 to a few hun­dred dol­lars. As­sis­tance is avail­able to con­sumers buy­ing in­di­vid­ual poli­cies; peo­ple with em­ployer cov­er­age are un­af­fected by the dis­pute.

Nearly 3 in 5 Health­ cus­tomers qual­ify for help, an es­ti­mated 6 mil­lion peo­ple or more. The an­nual cost to the govern­ment is cur­rently about $7 bil­lion.

But the sub­si­dies have been un­der a le­gal cloud be­cause of a dis­pute over whether the Obama health care law prop­erly ap­proved them. Adding to the con­fu­sion, other parts of the Af­ford­able Care Act clearly di­rect the govern­ment to re­im­burse the car­ri­ers.

For ex­am­ple, the ACA re­quires in­sur­ers to help low­in­come con­sumers with their co­pays and de­ductibles.

And the law also spec­i­fies that the govern­ment shall re­im­burse in­sur­ers for the cost-shar­ing as­sis­tance that they pro­vide.

But there’s dis­agree­ment over whether the law prop­erly pro­vided a con­gres­sional “ap­pro­pri­a­tion,” sim­i­lar to an in­struc­tion to pay. The Con­sti­tu­tion says the govern­ment shall not spend money un­less Con­gress ap­pro­pri­ates it.

House Repub­li­cans try­ing to thwart the ACA sued the Obama ad­min­is­tra­tion in fed­eral court in Wash­ing­ton, ar­gu­ing that the law lacked spe­cific lan­guage ap­pro­pri­at­ing the cost-shar­ing sub­si­dies.

A district court judge agreed with House Repub­li­cans, and the case has been on hold be­fore the U.S. ap­peals court in Wash­ing­ton. Up to this point the Trump ad­min­is­tra­tion con­tin­ued mak­ing the monthly pay­ments, as the Obama ad­min­is­tra­tion had done.

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