Subsidies to health insurers set to end
After executive action, Trump targets markets
WASHINGTON — In a brash move likely to roil insurance markets, President Donald 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 — disclosed just hours after the president signed an executive order targeted at potentially sweeping changes in the nation’s insurance system — 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 Mr. Trump threated 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 Mr. 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 former President Barack Obama’s Affordable Care Act.
Frustrated over setbacks in Congress, Mr. Trump is wielding his executive orders 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, Mr. 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.
Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., is working on such legislation.
The so-called “cost-sharing” subsidies defray out-ofpocket expenses 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 HealthCare.gov 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 the payments to insurers.
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 5reimburse insurers for the cost-sharing assistance that they provide.