Trump urges Democrats to fix ‘broken mess’ after scrapping key ObamaCare subsidies
President’s decision to scrap subsidies to health insurance firms drew swift condemnation from political rivals and threats from state attorneys general in New York and California
US President Donald Trump on Friday urged Democrats to reach a health care deal after cutting off ObamaCare subsidies to health insurance companies for low-income patients in a forceful move that sparked threats of legal action and fears of chaos in insurance markets.
“ObamaCare is a broken mess,” Trump tweeted early on Friday. “Piece by piece we will now begin the process of giving America the great HealthCare it deserves!”
The decision is the most dramatic action Trump has taken yet to weaken the Affordable Care Act, former president Barack Obama’s signature health care law, which extended insurance to 20 million Americans.
ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!
— Donald J. Trump (@realDonaldTrump) October 13, 2017
Hard to believe that the Democrats, who have gone so far LEFT that they are no longer recognizable, are fighting so hard for Sanctuary crime
— Donald J. Trump (@realDonaldTrump) October 13, 2017
The move drew swift condemnation from Democrats and threats from state attorneys general in New York and California to file lawsuits. Trump, a Republican, urged opponents to reach out to him.
“The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!” Trump said in another tweet on Friday.
Trump has been frustrated by Republicans’ failure to repeal and replace the law, thwarting a promise he made during his successful 2016 presidential campaign.
His decision is likely to please those among his political base who detest the ObamaCare system, which many Republicans have attacked as an unnecessary government intrusion in Americans’ health care.
In a nod to that same constituency, the president signed an executive order on Thursday to make it easier for Americans to buy bare-bones health insurance plans exempt from ObamaCare requirements.
Senate Democratic Leader Chuck Schumer and House Democratic Leader Nancy Pelosi derided the subsidies cut-off in a joint statement, saying Trump would single-handedly push Americans’ health care premiums higher.
“It is a spiteful act of vast, pointless sabotage levelled at working families and the middle class in every corner of America,” they said. “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.”
Insurers and proponents of ObamaCare have implored Trump for months to commit to making the payments, which are worth billions of dollars. Several insurers have cited uncertainty over the payments when increasing premiums for 2018 or exiting insurance markets altogether.
Health care stocks have edged lower in recent days. Ending the payments could hurt shares of insurers such as Anthem, Molina Healthcare, Cigna Corp and Centene Corp, which are offering plans on ObamaCare markets for 2018.
Trump has made the payments, which are guaranteed to insurers under ObamaCare to help lower out-of-pocket medical expenses for low income consumers, each month since taking office in January. But he has repeatedly threatened to cut them off and disparaged them as a “bailout” for insurance companies.
For Kathryn Haydon and her husband, who bought insurance under the law’s marketplace three years ago as struggling college students in Arkansas, the subsidies reduced the cost of their US$310 plan by about US$250, leaving them to pay US$60 each month.
“If the subsidy was not there, we would have gone without health insurance,” she said. “Our finances were extremely tight at the time for us … we would have just hoped there were no catastrophes.”
The White House said late on Thursday that it could not lawfully pay the subsidies any more.
A White House statement said based on guidance from the Justice Department, “the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under ObamaCare.”
“In light of this analysis, the government cannot lawfully make the cost-sharing reduction payments,” it said.
New York Attorney General Eric Schneiderman said he was prepared to lead other attorneys general in a lawsuit.
“I will not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost,” he wrote.
The payments are the subject of a lawsuit brought by House Republicans against the Obama administration that alleged they were unlawful because they needed to be appropriated by Congress. A judge for the federal district court for the District of Columbia ruled in favour of the Republicans, and the Obama administration appealed the ruling.
The Trump administration took over the lawsuit and had delayed deciding whether to continue the Obama administration’s appeal or terminate the subsidies, but in April, Trump began threatening to stop the payments.
That case became more complicated in August when a US appeal court allowed 16 Democratic state attorneys general to defend the payments and have a say in the legal fight.
The political turbulence has affected insurers’ decisions.
Anthem, one of the largest remaining ObamaCare insurers, in August scaled back its offerings in Nevada and Georgia and blamed the moves in part on uncertainty over the payments.
Blue Cross and Blue Shield of North Carolina earlier this year raised premiums by more than 20 per cent, but said it would have only raised premiums by about 9 per cent if Trump agreed to fund the payments.
The non-partisan Congressional Budget Office estimated that cutting off the payments would cause premiums to rise 20 per cent in 2018, and that 5 per cent of Americans would live in areas that do not have an insurer in the individual market in 2018.
Trump has taken other steps to undermine ObamaCare. Last week, his administration allowed businesses and non-profit organisations to seek exemptions from ObamaCare’s mandate that employers provide birth control in health insurance with no co-payment.
The administration also slashed the ObamaCare advertising and outreach budget and halved the open enrolment period.