IN A BRASH move likely to roil insurance markets, President Donald Trump will “immediately” halt payments to insurers under the Obama-era health care law he has been trying to unravel for months.
The Health and Human Services department made the announcement in a statement late last night. “We will discontinue these payments immediately,” said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma.
In a separate statement, the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorisation by Congress.
However, the administration had been making the payments from month to month, even as Trump threatened to cut them off to force Democrats to negotiate over health care. The subsidies help lower copays and deductibles for people with modest incomes.
Halting the payments would trigger a spike in premiums for next year, unless Trump reverses course or Congress authorises the money. The next payments are due around next Friday.
The top two Democrats in Congress sharply denounced the Trump plan in a joint statement.
“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” said House and Senate Democratic leaders Nancy Pelosi of California and Chuck Schumer of New York.
“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.”
The president’s action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorised by federal law, and say the president’s position is reckless.
“We are prepared to sue,” said California Attorney General Xavier Becerra. “We’ve taken the Trump Administration to court before and won.”
Word of Trump’s plan came on a day when the president had also signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama’s Affordable Care Act.
Frustrated over setbacks in Congress, Trump is wielding his executive powers to bring the “repeal and replace” debate to a head. He appears to be following through on his vow to punish Democrats and insurers after the failure of GOP health care legislation.
On Twitter, Trump has termed the payments to insurers a “bailout,” but it’s unclear if the President will get Democrats to negotiate by stopping payment.
Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year.
That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising. Insurers, hospitals, doctors’ groups, state officials and the US Chamber of Commerce have urged the administration to keep paying.
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