Report: Trump will order halt to insurer subsidies
WASHINGTON — In a brash move likely to roil insurance markets, President Trump plans to halt payments to insurers under the Obama-era health care law that he has been trying to unravel for months.
Two people familiar with the decision described the plan late Thursday night, seeking anonymity because they were not authorized to speak publicly.
The White House said in a statement that the government 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, and the president’s position is reckless.
Word of Trump’s plan came on a day when the president had 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 executive power 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,” and administration officials have questioned their legal authorization. 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.
The so-called “cost-sharing” subsidies defray out-of-pocket expenses for people with low to modest incomes, and can reduce a deductible of $3,500 to a few hundred dollars.
Anticipating the Trump administration’s possible move, Covered California, the state insurance marketplace, this year allowed insurers to offer two sets of rates for the most commonly purchased health plan on the exchange. The premiums for those plans would rise an extra 12.4 percent, Covered California said, if the cost-sharing subsidies were stopped — though some of the loss may be offset by an increase in a different type of subsidy.