Oct 13, 2017, 6:10 AM ET

Trump to end Obamacare subsidies that help low-income Americans

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The White House announced Thursday night that the administration will slash Obamacare subsidy payments to insurers.

The "cost-sharing reduction payments," worth an estimated $7 billion this year, are intended to reduce out-of-pocket costs for low-income Americans on Obamacare.

These subsidies are paid out in monthly installments and cutting them will likely further roil the already unstable insurance market. The nonpartisan Congressional Budget Office (CBO) has determined such a move would immediately bump up the number of uninsured people.

Health and Human Services says the payments will be discontinued immediately.

Trump tweeted about the situation on Friday morning, saying Obamacare was "imploding."

White House Press Secretary Sarah Sanders said in a written statement that the Departments of Justice and Health and Human Services concluded that it would be unlawful to continue the payments, because there are no appropriations. Both Attorney General Jeff Sessions and Acting Health and Human Services Secretary Eric Hargan released statements to that effect -- saying the payments overstepped legal bounds because Congress is responsible for appropriating money.

"The Government cannot lawfully make the cost-sharing reduction payments," Sanders said. "The United States House of Representatives sued the previous administration in Federal court for making these payments without such an appropriation, and the court agreed that the payments were not lawful."

House Speaker Paul Ryan, R-Wisc., reiterated Sanders' point in a late-night statement on Thursday.

"Under our Constitution, the power of the purse belongs to Congress, not the executive branch," Ryan said. "Today's decision by the Trump administration to end the appeal of that ruling preserves a monumental affirmation of Congress's authority and the separation of powers. Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with Trump administration to provide the American people a better system."

The president has threatened for months on cutting these payments, with many insurers already planning for this possibility. Lawmakers have also been anticipating the action. One bipartisan group has been working to find a solution to preserve these payments and shore up the markets. The pressure will now grow on them to act.

Democratic Congressional leaders were quick to react to a Politico news report Thursday night that the Trump administration was expected to announce that it would cease the subsidy payments.

House Democratic leader Nancy Pelosi and Senate Democratic leader Chuck Schumer issued a joint calling the action "pointless sabotage."

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

The move by the White House comes after the president on Thursday signed an executive order directing his administration to look into increasing access to Association Health Plans and short-term limited duration insurance. The president says the plans have the potential to make health insurance more affordable, but critics argue that the plans would not cover basic health benefits, like maternity care and prescription drugs.

Former Barack Obama administration official Austan Goolsbee defended his former boss's plan in an interview on MSNBC late Thursday.

"This is crazy town," the former chair for Obama's Council of Economic Advisers said. "This is a decision that is opposed by every major medical organization, the doctors, the nurses, the hospitals, the insurance companies, the consumer groups and every other leading expert group has opposed this decision."

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  • akzidenzgrotesk

    "Obamacare has proven itself to be a fatally flawed law"

    Only because the very concept of for profit health care is ITSELF a fatally flawed idea from the beginning. As perfectly evidenced by the horrors perpetrated by the system for the decades before Obamacare very slightly mitigated them. But noooooo, let's not talk about that at all.

  • janice sexton

    Obamacare has went broke

  • Keith

    There are a few questions to consider here.
    1. Were these government payments to insurers included in the ACA?
    2. If they were, how can an EO revoke them? If they weren’t, how come they are being paid out?
    3. If the payments were not legal, what is the fix?
    4. If necessary, couldn’t Congress still appropriate the funds? Maybe if there was any interest in bipartisanship, but we haven’t seen that on any scale in decades.

  • Jrducky

    I hope his supporters realize that this hurts them the most!!!

  • Warren Wagner

    Well, that's just too damn bad for those "Major Medical Organizations". They, and their kickbackers(Pelosi, Clinton, both Pres. and Sec., and Obama, et al) been fleecing Apmerica for years. Pharmaceutical companies have made trillions, not millions or billions. They could pay off the national debt in a heartbeat. They'd charge you first, but they could do it. America's tired of this crap. Every patient is basically a "lower income" person. Dr's, hospitals, insurance providers, pharmaceutical companies charge so damn much. Once you get in their clutches you're in debt for life. And sooner or later they get everyone

  • linmarco

    " Though he slay me, yet will I trust him..." ...Job 13:15. The poor who were in misery when he came into office, but voted for him anyway, will now see more of it. He has convinced them although they are suffering that he has made sure another group, they considered their inferiors, is suffering even more. Well surprise of surprises. He has miscalculated. That group was here from day one and knows how to endure suffering much better than the poor souls dumb enough to believe him. God help us.

  • Evan German

    The only expert group that matters is the American people. They are the experts in how much health care they can and should get for the money they pay. Trump's opinion does not matter at all, he has an agenda that does not care about American lives and health. All he cares about is campaign promises made from the world of Health Care IGNORANCE! I say Congress should immediately assemble and pass a bill restoring these payments and condemning the bullying acts that got them there. They should also begin debate on a bill to severely restrict Executive Orders until Trump is no longer President. That bill should also take long enough to pass that Trumps' push for the budget, no govt shutdown, and tax reform must be delayed until next year, with language and appropriate press conferencing to ensure that Trump takes the blame for all of those delays.

  • Guthrum

    This is money that goes to the insurance companies; that is the few that are still left. Few will be affected.
    The Supreme Court has ruled on this.
    Congress should get involved and pass some sort of tax credit or increase the medical expense deduction.
    These rising insurance costs have to be dealt with. Some people are spending half their income on medical insurance. The AHA did not get all those healthy people to sign up as was promised.

  • tet1953

    Trump says his EOs will lower costs and provide great health care for everybody. He couldn't say that if it wasn't true. I mean, that would be illegal, right? /s

  • michael

    False headline for article as the subsidies halted are SUBSIDIES TO INSURANCE COMPANIES. The subsidies to people for purchasing insurance continue. This is just plain old mischaracterization or propaganda.

  • Red Hawk

    Does this idiot realize he's screwing over his base? Does he really think they'll blame Obama?

  • Kobrakai7272

    Dictionary dot com defines implode as "to burst inward". Destroying something from the outside by cutting off funding is quite the opposite.

  • tet1953

    Trump is breaking it, but if the GOP doesn't fix it they will be blamed in 2018. 70% of all voters don't want this. Thanks Trump!

  • kritikosman

    Obscenity in the mad house!

  • Jacques

    Maybe somebody should have read it before they passed it.

  • c.g.

    Hope the gullibles who get kicked off health care
    programs have THEMSELVES to blame....

    For all of those voters out there who chose not to vote in the presidential election or voted for a 3rd party candidate as a protest....I also hope they get kicked off health care..
    .
    Just like the nuts who voted for Comrade Trump and now are having their relatives deported by him...ha,ha....they are now surprised since their relative was one of the "good illegals"....ha..

    People were warned about Comrade Trump when he ran for office and his history of being a liar and conman went back decades.....it should be no surprise to anyone that he has continued to lie and con the American people once he was elected.
    Elections have consequences.....

  • DFW-Texas 🇺🇸

    Congress already authorizes (CSR) $44 Billion in subsidies for the ACA, the additional asked for by healthcare insurance companies was never approved through Congress, that's why the President has written an EO to undue the past administrations EO, wasn't constitutional. Only Congress can authorize the dollars needed.

    What President Trump signed was an EO to stop the additional $7 Billion Government payments to insurance companies that lower "co pays", not the subsidies that people receive to help pay their premiums.

  • c.g.

    Can't wait to get back to the "good ole days" when people were routinely kicked off health care when they got too sick, or they had a baby born with disabilities. The lawyers will start making a lot more money when people are going thru bankruptcy when they can't afford their medical care. And lets start all those fund raisors for those who can't afford medical care to keep them alive....

    Yes, the Comrade Trump/GOP way of kicking people off health care ....that really makes America Great Again...ha,ha.