Trump will make key ObamaCare subsidy payments in August

Posted August 18, 2017

If President Trump makes good on his promise to stop payments to insurers mandated by the Affordable Care Act (Obamacare) then millions could be left without insurance.

The president has repeatedly said he might end the payments, known as cost-sharing reduction (CSR) payments, which are now slated to cost the government $7 billion during this fiscal year and $10 billion in 2018. President Trump has threatened to end the payments, saying ObamaCare is on track to "implode". Trump has said voters would blame Democrats for any problems with the markets, but few Republican elected officials share that view.

The CBO report released Tuesday said Trump's actions, not the law itself, would be to blame for higher costs.

Ending those payments would also increase the federal deficit, on net, by $194 billion from 2017 through 2026, "M$3 ostly because that change would result in increased costs for premium assistance tax credits", conclude the CBO and JCT.

A White House official confirmed Wednesday that the administration had chose to make this month's payment, which will total about $600 million. The payments had been made illegally.

The announcement drew praise from Sen. That leaves two counties at risk of having no insurers selling plans next year - Menominee County in Wisconsin and Paulding County in Ohio.

"If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!" the president tweeted.

That opposition illustrated the difficulty Alexander and like-minded lawmakers will face in trying to round up Republican support for legislation to stabilize a health care law the party has long wanted to repeal.

Analysts said the number of uninsured would increase by 1 million in 2018, mainly due to insurers dropping out of the marketplace.

Already, industry executives have publicly blamed the uncertainty for higher premiums for next year. And both he and some congressional conservatives like to talk as though continuing CSR subsidies (which help offset the cost of measures insurance companies are required to take under the Affordable Care Act to prevent large out-of-pocket costs for low-income policyholders) is just a "bailout for insurance companies". However, this will only happen if the threats by President Trump to cut some subsidies that usually go to the insurance companies are implemented.

Since early this year, the administration has refused to commit to continue sending the checks. Worries are that, after the July 28 failure of the Republican-controlled Congress to replace to repeal and replace Obamacare as Trump demanded, he could move to undermine the program by not renewing the subsidies at the end of this month.

This will be especially beneficial to enrollees slightly higher on the economic ladder, who receive subsidies but aren't eligible for cost-sharing reduction - and therefore don't have to buy Silver plans. The Constitution says the government shall not spend money unless Congress appropriates it. Last year, a federal judge agreed. The ruling is on hold pending a decision on an appeal started by the Obama administration, which has been handed over to Trump's White House.

This comes from a new CBO report on the likely effects of eliminating Obamacare's CSR subsidies.

The CBO also estimated that there would be an additional 1 million uninsured in 2018 than there are now if Mr Trump ends the subsidy payments.

Because the Congressional Budget Office is a nonpartisan group the opinions coming from that office tend to carry more water.

At issue are the subsidies by which the government reimburses insurers for the cost of offering more affordable health care plans to middle- and low-income Americans. To avoid losing money, some insurers would pull out of the marketplaces. In a letter, leaders of the Colorado Consumer Health Initiative urged state Commissioner of Insurance Marguerite Salazar to push insurers to accept lower premium increases in the individual market, where people buy health insurance on their own. The budget office explicitly said that should the administration fail to make these payments, silver plans will be more expensive meaning that the government will even incur more as the government is also involved in helping Americans pay for these services. That means that when premiums rise, those government subsidies rise as well.