Washington: President Donald Trump’s decision to cut off critical payments to health insurance companies ratcheted up the pressure on Congress on Friday to take action to protect consumers from soaring premiums, while also adding a combustible new issue to negotiations to avert a government shutdown this year.
Trump’s move, announced on Thursday night, could cause chaos in insurance markets, sending insurers fleeing from the Affordable Care Act’s marketplaces, raising the federal government’s costs and pricing out some consumers. It came just hours after he signed an executive order that also undermined the health law by encouraging the development of lower-cost insurance policies not subject to the Affordable Care Act’s rigorous coverage standards.
But the president suggested on Friday that he was trying to get Democrats to the negotiating table.
“If the Democrats were smart, what they’d do is come and negotiate something where people could really get the kind of health care that they deserve,” Trump told reporters, insisting that the subsidies were “making insurance companies rich.”
He kept up the drumbeat on Friday night, writing on Twitter:
“ObamaCare is causing such grief and tragedy for so many. It is being dismantled but in the meantime, premiums & deductibles are way up!”
The subsidies, known as cost-sharing reduction payments, go to insurance companies to offset the cost of reducing out-of-pocket expenses like deductibles and co-payments for low-income customers. Under the Affordable Care Act, insurers will still have to help those customers, but without the help of Washington, they say, they will increase premiums. And with their profits squeezed, they could abandon the marketplaces.
Even before Trump’s decision, senators Lamar Alexander, the Republican from Tennessee, and Patty Murray, the Democrat from Washington, were working on legislation to extend the subsidies, paired with other measures to offer states more flexibility regulating health plans offered under President Barack Obama’s health law.
But Republicans in Congress are divided. Some worry that ending the subsidies would hurt their constituents. Others are loath to do anything that could be seen as propping up the health law they had promised to tear down.
For their part, Democrats are convinced that any blame for rising premiums and shrinking choices will fall on Republicans, who control the White House and Congress. After spending the year trying to preserve the Affordable Care Act, Democrats did not appear ready on Friday to make major concessions.
“Unless our Republican colleagues act, the American people will know exactly where to place the blame when their premiums shoot up and when millions lose coverage,” said senator Chuck Schumer of New York, the Democratic leader.
The uncertainty over the payments to insurers has loomed over Congress for months, but Trump’s action is forcing lawmakers to confront the issue head on less than three weeks before the start of the annual open enrollment season under the Affordable Care Act.
Even with the president’s move, it was far from clear whether lawmakers could agree on steps to continue the payments. The negotiations between Alexander and Murray had stalled over how much latitude to give states seeking waivers from requirements of the Affordable Care Act.
Still, Murray expressed optimism and called on Republican leaders to support the efforts.
About 7 million people benefit from the cost-sharing subsidies. The president’s decision, by destabilising insurance markets and driving up premiums, could adversely affect millions of others who buy insurance on their own and do not receive federal subsidies, health policy experts said.
Representative Tom Reed, the Republican from New York, who is the co-chairman of a bipartisan group of lawmakers called the Problem Solvers Caucus, said Trump’s decision “increased the stakes” for Congress to take action. More than two months ago, Reed’s group offered a series of proposals to shore up insurance markets, including funding the subsidies.
“It’s only going to get worse as this marketplace continues to destabilise,” Reed said. “If we stay where we are and do nothing, I think this is going to be a pox on all of our houses.”
Representative Mark Meadows, the Republican from North Carolina, chairman of the hard-line conservative House Freedom Caucus, said he had been in discussions with other Republicans over proposals to drive down premiums that could be tied to a continuation of the subsidies for insurers.
“The fundamental question is, what do you get in terms of relief for insurance premiums and health care costs, broadly, in exchange for continuing a bailout to the insurance companies in the short run or long run?” Meadows said.
As lawmakers mulled how to move forward, doctors, hospitals, insurers, state insurance commissioners and advocates for patients denounced Trump’s decision.
“Our patients will ultimately pay the price,” said Dr David O. Barbe, president of the American Medical Association. “We urge Congress to accelerate its efforts to reinstate these payments before further damage is done.”
Governors also weighed in, expressing alarm at the termination of the subsidies. “We are deeply concerned that the administration has declined to continue these payments, further increasing uncertainty for state marketplaces,” the National Governors Association said.
Govrnor Brian Sandoval of Nevada, a Republican, told The Nevada Independent that the president’s decision was “going to hurt kids.” He continued: “It’s going to hurt families. It’s going to hurt individuals. It’s going to hurt people with mental health issues. It’s going to hurt veterans. It’s going to hurt everybody.”
The attorneys general of 18 states, including California, Massachusetts and New York, filed suit on Friday to prevent any interruption in the payments.
But the Trump administration insisted that a federal district judge was right in ruling last year that the payments were unconstitutional because Congress never explicitly provided money for them.
“Congress has the power of the purse, and it is up to Congress to decide which programmes it will and will not fund,” Attorney General Jeff Sessions said in a legal opinion, adding: “The executive branch cannot unilaterally spend money that Congress has not appropriated.”
The cost-sharing subsidies are available to people with incomes of 100 per cent to 250 per cent of the federal poverty level, or about $12,060 to $30,150 a year for an individual.
“Cost-sharing reductions are critical to low-income Americans,” representative Carlos Curbelo, the Republican from Florida, wrote on Twitter. “Congress should guarantee their funding through the appropriations process.”
