Trump to now halt Oba­macare sub­si­dies

No pay­ments to in­sur­ers could kill law

Orlando Sentinel - - 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 low­er­in­come Amer­i­cans af­ford cov­er­age. The de­ci­sion fol­lows an ex­ec­u­tive or­der 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.

The White House said it can­not legally con­tinue to pay the so-called cost-shar­ing sub­si­dies be­cause they lack a for­mal au­tho­riza­tion 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 health care.

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.

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.”

While the ad­min­is­tra­tion will now 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 do­mes­ticpol­icy 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 four-fifths of the 10 mil­lion Amer­i­cans with ACA cov­er­age.

Word of the pres­i­dent's de­ci­sion, which was first re­ported by Politico, 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 health­care poli­cies of the Obama ad­min­is­tra­tion, a cen­tral prom­ise since last year's pres­i­den­tial cam­paign.

Crit­ics, who in­clude state in­sur­ance com­mis­sion­ers, most of the health­in­sur­ance in­dus­try and main­stream pol­icy spe­cial­ists, pre­dict that a pro­lif­er­a­tion of th­ese other kinds of cov­er­age will have dam­ag­ing rip­ple ef­fects, driv­ing up costs for con­sumers with se­ri­ous med­i­cal con­di­tions and prompt­ing more in­sur­ers to flee the law's mar­ket­places. Part of Trump's ac­tion, they say, will spark court chal­lenges over its le­gal­ity.

The most far-reach­ing el­e­ment of the or­der in­structs a trio of Cabi­net de­part­ments to re­write fed­eral rules for “as­so­ci­a­tion health plans” — a form of in­sur­ance in which small busi­nesses of a sim­i­lar type band to­gether through an as­so­ci­a­tion to ne­go­ti­ate health ben­e­fits. Th­ese plans have had to meet cov­er­age re­quire­ments and con­sumer pro­tec­tions un­der the 2010 health-care law, but the ad­min­is­tra­tion is likely to ex­empt them from those rules and let such plans be sold from state to state with­out in­sur­ance li­censes in each one.


Pres­i­dent Don­ald Trump says one of his or­ders would “pro­vide mil­lions of Amer­i­cans with Oba­macare re­lief.”

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