As the Washington Nationals and the Chicago Cubs duked it out in the National League Division Series, the Trump administration decided to drop some rather big news around midnight: they’re ending the constitutionally questionable Obamacare subsidy payments to health insurers. After reviewing the policy, the White House said it could legally no longer afford to keep these payments coming. These subsidies are a key provision of the law (via Politico):
President Donald Trump plans to cut off subsidy payments to insurers selling Obamacare coverage in his most aggressive move yet to undermine his predecessor's health care law.
The subsidies, which are worth an estimated $7 billion this year and are paid out in monthly installments, may stop almost immediately since Congress hasn’t appropriated funding for the program.
The decision — which leaked out only hours after Trump signed an executive order calling for new regulations to encourage cheap, loosely regulated health plans — delivered a double whammy to Obamacare after months of failed GOP efforts to repeal the law. With open enrollment for the 2018 plan year set to launch in two weeks, the moves seem aimed at dismantling the law through executive actions.
Press Secretary Sarah Huckabee Sanders confirmed the decision in a statement emailed to reporters Thursday night.
“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,” she said. “In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments. …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.”
BREAKING: White House says it cannot lawfully pay subsidies to health insurance companies under President Obama's health care law.
— The Associated Press (@AP) October 13, 2017
(1) Obamacare was not working.
— Gabriel Malor (@gabrielmalor) October 13, 2017
(2) CSR payments were never lawful.
(3) Congress must act.
(4) We're doomed.
President obeys court order. Oh, the humanity. https://t.co/ySWT6f4PGi
— Michael F. Cannon (@mfcannon) October 13, 2017
Executive, legislative & judicial branches now agree Obama's unilaterally-paid Obamacare subsidies were illegal. Your move, Congress. Gulp!
— Guy Benson (@guypbenson) October 13, 2017
In 2016, a federal judge ruled the payment scheme unconstitutional, but the Obama administration appealed the ruling, allowing the payments to continue. This is borne out of the House GOP’s lawsuit against the Obama administration over the Affordable Care Act (via LA Times c. 5/12/16):
House Republicans won Round 2 in a potentially historic lawsuit Thursday when a federal judge declared the Obama administration was unconstitutionally spending money to subsidize health insurers without obtaining an appropriation from Congress.
Last year, U.S. District Court Judge Rosemary Collyer broke new ground by ruling the GOP-controlled House of Representatives had legal standing to sue the president over how he was enforcing his signature healthcare law.
[…]
Two years ago, House Republicans sued Obama under then-Speaker John Boehner and claimed the president had violated the law by delaying enforcement of several provisions of the Affordable Care Act.
But lawyers later focused on the reimbursements for health insurers that had received little attention before. They said these payments would come to $175 billion over a decade.
The healthcare law says insurers who enroll eligible, low-income Americans shall cover the costs of their deductibles and co-payments, but promises the federal government “shall make periodic and timely payments” to cover those costs.
The law is not entirely clear on where this money will come from, however.
I’m sure Guy will have a more detailed analysis on this development, so be on the lookout for that post. In the meantime, you can expect a liberal meltdown.
Join the conversation as a VIP Member