White House Says It Will End Key Obamacare Subsidies to Insurers

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The White House announced late Thursday that it “cannot lawfully make the cost-sharing reduction payments” to insurance companies under the Affordable Care Act, a decision Democrats condemned as a “spiteful act” that would hike premiums.

 

President Donald Trump has said he was considering cutting off the cost-sharing reduction payments, which reimburse insurers for lowering out-of-pocket costs for customers, in order to increase pressure on lawmakers to repeal the ACA, also known as Obamacare.

 

“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,” the White House said in a statement.

 

“In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments,” the White House statement said.

The Congressional Budget Office, or CBO, has said that in the short term, health care premiums would spike, insurers would exit the market and deficits would increase if Trump followed through with his threat.

 

Insurers have already submitted their premiums for 2018 and in many cases raised rates on the assumption that CSRs would be cut off. That could somewhat blunt the impact of the White House’s move.

 

Democrats and Republicans in the House and Senate have discussed appropriating the CSR payments themselves, which would moot the impact of Trump’s order. But it’s not yet clear GOP leaders would support a bill, which is likely to draw fierce conservative opposition.

The move comes the same day that Trump signed an executive order that could undermine the health care law that was President Barack Obama’s signature legacy.

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