On Thursday, TFPP reported that President Donald Trump has signed an executive order meant to provide some relief from Obamacare by directing federal agencies to allow more flexibility in health insurance options. Now comes word that the president has another move planned to move closer to what Congress will not.
President Donald Trump plans to cut off critical subsidy payments to insurers selling Obamacare coverage, according to two people familiar with the matter.
The decision to end the payments, estimated at $7 billion this year, marks Trump’s most aggressive move yet to dismantle Obamacare after months of failed GOP repeal efforts on Capitol Hill. The move is likely to draw lawsuits and may put pressure on Congress to appropriate funding for the subsidies, which help insurers reduce out-of-pocket costs for low-income Obamacare customers.
Kimberly Leonard at the Washington Examiner has more detail on what this means:
Cost-sharing subsidies have featured heavily in the debate over who is responsible for the troubles facing Obamacare’s exchanges. The funds were originally authorized under former President Barack Obama, resulting in a lawsuit by the House because Congress had not appropriated them. A federal judge sided with the House but the funds continued to be authorized as the case was under appeal, a situation that remained in limbo as Trump took the helm at the Oval Office.
The money, estimated at roughly $7 billion for this year, pays for low-income consumers’ out-of-pocket medical expenses. Under Obamacare, insurers are required to offer lower costs for these services, for which the government then reimburses them. If they do not receive the funding, they must still offer discounts, and without an action from Congress they would be likely to sue for the money.
The uncertainty over the future of the payments has contributed to insurer exits and planned premium increases for 2018, though insurers also acknowledge that they were losing money through the exchange business, where too few young, healthy enrollees purchased their plans.
Cutting off the subsidies would increase the number of uninsured by 2 million people in 2018 and would result in insurance costs that are 20 percent higher than already-expected increases, according to the Congressional Budget Office.
Conservatives have long advocated cutting off these subsidies, both on constitutional grounds that Obama’s unilateral authorization of them was illegal and on practical grounds that hastening the Obamacare system’s collapse could increase pressure on Congress to finally do away with the hated law.
Policy analysts are still working through the details and implications of Trump’s healthcare moves on Thursday. One particular area of concern was whether the executive order crossed the line from lawful discretion in implementing statutes into the sort of unilateral executive policy-making conservatives railed against when Barack Obama did it on numerous issues.
In any event, while welcome, none of this is a substitute for Congress finally doing the right thing. The fact that they have done nothing serious to get rid of the colossal failure of Obamacare is simply inexcusable.
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