Policy

Trump Controls Key Funding Move in Health Care Fight

President could stop cost-sharing subsidy payments to insurers

President Donald Trump could choose to stop cost-sharing subsidy payments to health insurers. (Chip Somodevilla/Getty Images)

If President Donald Trump wants to “let Obamacare fail” as he says, there’s a ready way for him to give it a push.

So far, the Trump administration and House Republicans have agreed to keep frozen a case in a Washington appeals court over appropriations as part of a push to repeal and replace the 2010 health care law. The case is left over from when House Republicans sued the Obama administration in 2014.

But Trump could simply pull the plug on the government’s appeal. Part of such a move could cement in place a lower court ruling that ordered the Obama administration to stop subsidy payments to health insurance providers under the law.

Right now, there’s nobody involved in the case who could stop him except House Republicans.

Insurers have called the payments “critical,” and made the issue a chief lobbying priority. Democratic attorneys general from 15 states and the District of Columbia have sought to intervene in the lawsuit to defend the continued payments, saying the lower court’s ruling threatens the availability of health insurance for millions of their residents.

Allowing the lower court ruling to stand “would cause insurers to raise premiums and withdraw from the Exchanges, force more residents to forgo insurance, and increase the States’ uncompensated care and administrative costs,” the attorneys general said in a court filing Monday.

The Trump administration continued to make the payments, called cost-sharing subsidies, that help especially low-income people afford the co-pays, deductibles and other out-of-pocket costs associated with their health insurance policies. A Congressional Budget Office and Joint Committee on Taxation estimate from January pegged outlays for cost-sharing subsidies at $7 billion in fiscal 2017, rising to $12 billion in fiscal 2020.

The pause in the appeal means the lower court’s decision to stop those payments has never gone into effect, helping to keep the insurance market stable while lawmakers come up with legislation that could end the controversy and make the appeal moot.

But that was while the legislative push continued. The GOP effort to overhaul the U.S. health insurance system collapsed Monday night. Now, Republicans are scrambling for a way forward. 

Owning Obamacare

Trump took to Twitter to hint at what his next actions could be.

“As I have always said, let ObamaCare fail and then come together and do a great healthcare plan. Stay tuned!” Trump tweeted Tuesday.

He backed that up in a statement to reporters later in the day.

“I think we’re probably in that position where we’ll just let Obamacare fail,” the president said. “We’re not going to own it. I’m not going to own it. I can tell you the Republicans are not going to own it. We’ll let Obamacare fail and then the Democrats are going to come to us and they’re going to say, ‘How do we fix it, how do we fix it,’ or, ‘How do we come up with a new plan?’ ”

Trump later added: “By the way, Obamacare isn’t failing, it’s failed. It’s gone.”

It’s unclear where Republicans stand on the subsidies now. The Obama administration had treated the subsidy payments as mandatory spending, but the judge in this case ruled that Congress must appropriate money annually for those subsidies.

Sen. Jeanne Shaheen, D-N.H., went to the Senate floor Tuesday to ask for unanimous consent that the Senate pass a bill that would clarify that cost-sharing reduction subsidies are mandatory funding. Senate Majority Whip John Cornyn, R-Texas, objected.

The Democratic attorneys general, in their effort to intervene in the case, argue that the uncertainty of the Trump administration’s continued payments of the subsidies has already hurt the insurance markets.

Because the administration “has refused to guarantee that it will make CSR payments in 2018, insurers have sought to raise premiums and announced that they will withdraw from Exchanges,” they said in Monday’s court filing.

Top Republicans, including appropriators, have said they are willing to make the payments as they seek to dismantle the health care law, despite a previous unwillingness to do so under the Obama administration that sparked the lawsuit in the first place. House Republicans filed the lawsuit in response to a series of President Barack Obama’s unilateral executive actions that they said were unconstitutional.

The attorneys general who joined the motion include those from California, New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, Washington and the District of Columbia. 

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