Frustrated with Congress' repeated failure to repeal the Affordable Care Act, commonly known as Obamacare, President Trump now moves to undercut the ACA without the involvement of Congress by cutting off cost-sharing reduction payments to health insurance companies. These subsidies were designed by President Obama’s administration to help low-income Americans get health care.
But the subsidies were Obama’s work-around, circumventing an uncooperative Congress, and thus they were never funded by Congress. Trump’s administration announced on Thursday that the federal government will no longer grant those subsidies, estimated in the billions, which reimburse insurers for the cost-sharing reductions they are required by law to make for low-income patients.
Trump’s press secretary released a statement on Thursday that the Department of Health and Human Services has determined there is no lawful appropriation for the subsidies:
Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare. In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments.
Trump went to Twitter to once again persuade his constituents that the ACA is doomed:
The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!— Donald J. Trump (@Donald J. Trump) 1507887414.0
ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!— Donald J. Trump (@Donald J. Trump) 1507893252.0
Trump previously threatened to end the subsidies, which reduce copays and deductibles for low-income families and made health insurance possible and affordable. His decision to end the subsidies threatens to throw the health insurance marketplace into chaos.
Though the White House states that the subsidies are essentially illegal, the president’s action to end them will likely trigger a lawsuit from state attorneys general, who contend the subsidies are legal and authorized by federal law, and the president’s position is reckless. According to NPR, one analysis says the removal of the subsidies will cause a spike in premiums, forcing smaller insurers out of the marketplace, and will even cost the government more, to the tune of $2.3 billion, than if the subsidies were to stay in place.
Democrat House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer released a joint statement condemning the president’s action:
It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America [...] 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.
New York Attorney General Eric T. Schneiderman is prepared to lead the attack, alongside other state attorneys general in a lawsuit against the Trump administration. “I will not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost,” he wrote in a statement.