Trump discontinues Obamacare subsidies
Payments to insurers helped customers afford their premiums.
The Trump administration announced at 11:23 p.m. Thursday it will stop paying billions of dollars to hold down health costs for consumers, a move that has helped drive up premium increases on government exchange plans an average of 45 percent in Florida in 2018.
“The Democrats ObamaCare is imploding,” President Donald Trump tweeted Friday. “Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”
Florida Democrats said the president might see it as political theater, but the health and financial well-being of millions is at stake.
“President Trump has become a one-man wrecking ball of the American health care system,” said U.S. Rep. Lois Frankel, D-West Palm Beach.
At least taxpayers will save money, right? No, according to the Congressional Budget Office.
Though stopping “cost-sharing reduction” money might seem at first glance to save taxpayers $118 billion by 2026, it spikes, to $365 billion, another kind of subsidy to keep premiums affordable and will increase the deficit by a net $194 billion over a decade, CBO projected.
Florida insurers had already
priced into 2018 rate increases the possibility the administration would end such payments, following threats from the president to end what he called “bailouts” for insurers.
Everyone in the marketplace could feel the effects if the drama and turbulence drives more insurers or consumers away, but the people likely to suffer most are consumers who make too much income to qualify for government financial assistance.
About 93 percent of Florida’s more than 1 million Affordable Care Act marketplace customers are likely to see little change in what they pay out of their own pockets each month, even after the president’s action. The 7 percent making too much income to qualify for subsidies, however, get no protection from rate hikes.
The announcement came hours after Trump signed an executive order Democrats say will destabilize markets and lead to junk insurance with policies that don’t necessarily cover maternity care, mental health or other “essential benefits” the Affordable Care Act requires.
It also follows Trump administration maneuvers that Obamacare supporters say are designed to make it harder for people sign up for 2018 policies.
The enrollment period that starts Nov. 1 has been cut in half, from 12 to six weeks. In addition, administration officials have announced plans to shut down Healthcare. gov overnight on the very first day and most Sundays for planned outages, though nights and weekends are when many working people have free time to use it.
Some 66 percent of Americans want lawmakers to stabilize Affordable Care Act markets rather than continue working to repeal and replace the law, according to a poll released Friday by the nonprofit Kaiser Family Foundation. That included 85 percent of Democrats, 67 percent of independents and 43 percent of Republicans.
U.S. Health and Human Services acting Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma released a statement late Thursday saying that cost-sharing reduction payments will be discontinued immediately based on a legal opinion from the U.S. Attorney General’s Office.
“It has been clear for many years that Obamacare is bad policy,” the statement said. “It is also bad law. The Obama Administration unfortunately went ahead and made CSR payments to insurance companies after requesting — but never ultimately receiving — an appropriation from Congress as required by law.”
The statement continued, “In 2014, the House of Representatives was forced to sue the previous Administration to stop this unconstitutional executive action. In 2016, a federal court ruled that the Administration had circumvented the appropriations process, and was unlawfully using unappropriated money to fund reimbursements due to insurers.”
After a legal review, the statement said, “we believe that the last Administration overstepped the legal boundaries drawn by our Constitution. Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”
It’s now up to Congress to decide whether to continue the payments.
Obamacare opponents applauded the president’s move, with one comparing it to knocking over some furniture after a lot of congressional talk and little action.
“After the Senate failed twice to replace Obamacare, President Trump decided to tip over the table by denying health insurers subsidy payments that were not authorized by Congress,” said Americans for Limited Government President Rick Manning. “President Trump is right constitutionally.”
ACA supporters responded quickly. New York Attorney General Eric Schneiderman, part of a coalition of 19 states who intervened in the House vs. Price court case this year, moved Friday to fight the president’s action in court.
“His effort to cut these subsides with no warning or even a plan to contain the fallout is breathtakingly reckless,” Schneiderman said.
Florida Democratic Sen. Bill Nelson said the president should encourage a bipartisan solution, not make it his personal mission to wreck Obamacare. “In just two moves this week, President Trump continued his sabotage of the nation’s health care law by allowing for health care without the necessary protections for people with pre-existing conditions and in his latest move, ending payments that help people afford their health coverage,” Nelson said. “As I have said before, we need to focus on bipartisan solutions that will make quality health insurance affordable by fixing the existing law.”