Trump Ends ACA Insurer Payments

After mentioning it for months, President Donald Trump has officially decided to stop paying the cost-sharing reduction subsidies that help insurers keep premiums down for lower-income Americans.

In a statement that went out late Thursday, press secretary Sarah Huckabee Sanders said that the administration determined through guidance from HHS and the Department of Justice that continuing the Affordable Care Act (ACA)’s payments to insurers would not be lawful.

“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,” she wrote in the statement. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

Early Friday, the president took to Twitter to tweet about the decision:

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

During a press conference earlier in the day when he signed the executive order to allow the sale of health insurance across state lines, the president discussed how he was now taking steps to unravel the ACA.

“Since I've started running and since I became president of the United States, I just keep hearing ‘repeal and replace, repeal and replace.’ Well, we're starting that process, and we're starting it in a very positive manner,” Trump said.

Following the surprise announcement from the Trump administration, House Democratic Leader Nancy Pelosi, California, and Senate Democratic Leader Chuck Schumer, New York, issued a joint statement claiming that the president was risking the healthcare of millions of Americans.

“Sadly, instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans’ health premiums,” they said.

They added that the move indicates that the president is walking away from bipartisan efforts that are taking place in the Senate to put in place policies to shore up the individual marketplace and help lower premiums.

One of the policies floated by Senators Lamar Alexander, R-Tennessee, and Patty Murray, D-Washington, of the Senate Health Education Labor and Pensions Committee, was to guarantee funding for the cost-sharing subsidies, since Trump has threatened cutting them off in the past.

In August, the Congressional Budget Office and the Joint Committee on Taxation released a report on what the impact of ending the cost-sharing reduction payments would mean. They found that premiums would increase by about 20% in the short term, but that an increase in the government subsidies to individuals purchasing silver plans would mean individuals wouldn’t necessarily feel the increase. As a result, the federal government would, ultimately, have to pay more, which would increase the federal deficit by $194 billion from 2017 through 2026.