Trump to End Key Obamacare Subsidy

Posted: Oct 13, 2017 7:20 AM

The White House announced late Thursday that President Trump plans to “immediately” end payments to insurers selling Obamacare—a move that will likely bring about a legal challenge. 

Trump is hoping his decision will bring Democrats to the negotiating table to work out a “fix” to the “imploding” law. 

“The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!” he tweeted early Friday morning. "ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!"

The aggressive measure is just the latest action the president’s taken in his efforts to repeal and replace Obamacare after congressional Republicans have failed time and again in delivering on their seven-year promise. Earlier Thursday he signed an executive order to make lower-premium healthcare plans more widely available. 

Trump has repeatedly threatened to end the cost sharing reduction (CSR) payments, which have been made on a monthly basis. They are estimated to be worth $7 billion this year, according to The Hill

"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," the White House announced in a statement Thursday evening.

Acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma said the payments will be discontinued “immediately.”

White House Press Secretary Sarah Huckabee Sanders called the payments “unlawful.”

"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. Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people," she said.

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Democratic pushback was swift. 

In a joint statement, House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer said the move will increase premiums for Americans by roughly 20 percent or more. 

"If these reports are true,” the Democrats said, “the president is walking away from the good-faith, bipartisan Alexander-Murray negotiations and risking the health care of millions of Americans.”

They also called the move a "spiteful act of vast, pointless sabotage.”

House Speaker Paul Ryan on the other hand praised the president’s decision.

"Today’s decision ... preserves a monumental affirmation of Congress’s authority and the separation of powers," he said in a statement. "Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with Trump administration to provide the American people a better system.”