Friday, October 13, 2017 1:00 am
Trump to end ACA cost sharing
Move puts health law's marketplaces at risk
WASHINGTON – President Donald Trump is throwing a bomb into the insurance marketplaces created under the Affordable Care Act, choosing to end critical payments to health insurers that help millions of lower-income Americans afford coverage.
The decision follows an executive order Thursday to allow alternative health plans that skirt the law's requirements.
The White House confirmed late Thursday that it would halt federal payments for cost-sharing reductions, although a statement did not specify when. According to two people briefed on the decision, the cutoff will be as of November. The subsidies total about $7 billion this year.
Trump has threatened for months to stop the payments, which help eligible consumers afford their deductibles and other out-of-pocket expenses, but held off while other administration officials warned him that such a move would cause an implosion of the ACA marketplaces that could be blamed on Republicans.
Health insurers and state regulators have been in a state of high anxiety over the prospect of the marketplaces cratering because of such White House action. The fifth year's open-enrollment season for consumers to buy coverage through ACA exchanges will open in less than three weeks, and insurers have said that stopping the cost-sharing payments would be the single greatest step the Trump administration could take to harm the marketplaces – and the law.
Ending the payments is grounds for any insurer to back out of its contract to sell health plans for 2018.
The cost-sharing reductions have long been the subject of a political and legal seesaw. Congressional Republicans argued that the sprawling 2010 health care law that established the subsidies does not include specific language providing appropriations to cover the government's cost.
House Republicans sued HHS over the payments during former President Barack Obama's second term. A federal court agreed that they were illegal, and the case has been pending before the U.S. Court of Appeals for the D.C. Circuit.
“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,” a statement from the White House said.
While the administration will now argue that Congress should appropriate the funds if it wants them to continue, such a proposal will face a serious hurdle on Capitol Hill.
The cost-sharing payments are separate from a different subsidy that provides federal assistance on premiums to more than four-fifths of the 10 million Americans with ACA coverage.
Word of the president's decision came just hours after he signed the executive order intended to circumvent the ACA by making it easier for individuals and small businesses to buy alternative types of health insurance with lower prices, fewer benefits and weaker government protections.
The White House and allies portrayed the president's move as wielding administrative powers to accomplish what congressional Republicans have failed to achieve: fostering more coverage choices while tearing down the law's insurance marketplaces.