In the latest blow to former President Barack Obama's signature healthcare bill, President Donald Trump is set to scrap key subsidy payments to insurers, the administration's most aggressive move to undermine Obamacare yet.
The announcement to end cost-sharing reduction (CSR) payments followed an executive order from the president aimed at allowing healthy, young Americans to buy inexpensive healthcare plans outside of Obamacare's restrictions.
While the administration has continued making CSR payments to insurers since taking office, the president has often threatened to cancel the payments worth an estimated $7 billion this year.
“Based on guidance from the Department of Justice,” the White House said in a statement, “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 Congressional Budget Office reported in August that ending the CSR subsidies would send premiums skyrocketing for those supported by the payments while also increasing the federal deficit by $194 billion by 2026.
However the Trump administration argues it cannot legally continue to make CSR payments without Congress's approval. "It has been clear for many years that Obamacare is bad policy. It is also bad law,” Health and Human Services Acting Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement Thursday night.
“The Obama administration unfortunately went ahead and made CSR payments to insurance companies after requesting — but never ultimately receiving — an appropriation from Congress as required by law. After a thorough legal review by HHS, Treasury, OMB, and an opinion from the attorney general, we believe that the last administration overstepped the legal boundaries drawn by our Constitution.”
The statement continues, “Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”
But Democrats are pushing back. In a joint statement, House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) slammed the president's plan to end CSR payments, saying the president will “singlehandedly hike Americans’ health premiums.”
“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” the top Democrats added. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”
Trump, however, launched an early Friday morning Twitter storm defending the move:
The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!
— Donald J. Trump (@realDonaldTrump) October 13, 2017
“ObamaCare is a broken mess,” Trump added in another tweet. “Piece by piece we will now begin the process of giving America the great HealthCare it deserves!”