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Trump To Scrap Crucial Obamacare Insurer Subsidy

Update: Late Thursday, the administration said it would immediately stop paying what are known as cost-sharing reduction subsidies. The payments go to health insurers in the Affordable Care Act to help lower-income people with co-pays and other cost sharing. Without them, insurers have said they’ll dramatically raise premiums or pull out of the law’s state-based markets.

According to Bloomberg, the White House said the Department of Justice and the Department of Health and Human Services both concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare. “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” the White House said in the statement.

The payments will stop immediately, with no transition period, Acting HHS Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement. They next payments were due next week.

“Congress has not appropriated money for CSRs, and we will discontinue these payments immediately,” the department said.

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Just hours after signing an executive order that implicitly begins unwinding ObamaCare, Politco reports, citing two people familiar with the matter, that President Trump plans to cut off critical subsidy payments to insurers selling Obamacare coverage. The decision, which critics call deliberate attempts to sabotage the law, come just weeks before Americans will be able to start signing up for coverage for 2018. They follow other steps the Trump administration has taken, such as slashing advertising and outreach budgets meant to get people to sign up, as well as planning outages of the website where people can enroll.

Earlier today, Trump signed an executive order expanding access to more loosely regulated insurance options with low premiums, a move that could undermine the ACA insurance markets.

“We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”

 

He then said that the order is "starting that process" to repeal ObamaCare.

 

It will be the "first steps to providing millions of Americans with ObamaCare relief."

And now, as Politico reports, the process appears to accelerating as Trump's decision to end the payments, estimated at $7 billion this year, marks the president's most aggressive move yet to dismantle Obamacare after months of failed GOP repeal efforts on Capitol Hill.

As Reuters notes, Trump has repeatedly threatened to stop the payments, which are made directly to insurance companies to help cover out-of-pocket medical expenses for low-income Americans enrolled in individual healthcare plans under Obamacare.

The move is likely to draw lawsuits and may put pressure on Congress to appropriate funding for the subsidies.

This latest move is likely to throw healthcare markets into chaos, and will infuriate Democrats – effectively closing the 'Chuck and Nancy' channel of communications – leaving a deal to avert government shutdown on or after Dec 8th (when the currenct extension deal runs out) increasingly doubtful.