Trump's 2nd Move Could Be Crippling to ObamaCare

He's ending crucial subsidies to insurers, but a potential deal to save them is in the works
By Rob Quinn,  Newser Staff
Posted Oct 13, 2017 3:14 AM CDT
Updated Oct 13, 2017 6:50 AM CDT
Trump Makes Another Big Move Against ObamaCare
President Trump speaks before signing an executive order on health care in the Roosevelt Room of the White House on Thursday.   (AP Photo/Evan Vucci)

In a move that analysts say could be a devastating blow to ObamaCare, President Trump is ending one of the health care bill's crucial subsidies. White House press secretary Sarah Huckabee Sanders confirmed Thursday night that the federal government will stop "cost-sharing reduction" payments to health insurers, which help millions of people afford insurance they get through ObamaCare's exchanges, Politico reports. Sanders called the payments a "bailout of insurance companies" and "another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system." Related coverage:

  • The impact: The Washington Post likens the decision to "throwing a bomb into the marketplaces" created by ObamaCare. Insurers have said this is the strongest step Trump could take to undermine the law, because rising costs would force them to bail without the promise of getting reimbursed. The alternative could be to remain, but to raise premiums to levels most couldn't afford. The New York Times also calls the subsidies "essential" to the Affordable Care Act.
  • Trump's possible offer: "The Democrats ObamaCare is imploding," the president tweeted Friday morning. "Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!" The last part might be the most telling. The Wall Street Journal reports that Trump has told at least one lawmaker that he's open to preserving the payments if a bipartisan deal is struck on health care.
  • All eyes on this: Trump is referring to a deal being negotiated by GOP Sen. Lamar Alexander and Democratic Sen. Patty Murray. Under the broad strokes, the subsidies would be continued, a win for Democrats, but states would get more flexibility to avoid ObamaCare rules, a win for Republicans, per the Journal.
  • Big deadline: Open enrollment for the ObamaCare exchanges begins in less than three weeks, raising pressure for a quick resolution.
  • Background: A federal court declared the subsidies illegal last year, though the decision is being appealed. The subsidies add up to around $7 billion this year, a figure expected to steadily rise in coming years. The attorneys general of California and New York vowed Thursday night that they would challenge the latest move in court, while Nancy Pelosi and Chuck Schumer called it "a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America."
  • Second move: Earlier Thursday, Trump signed an executive order that's expected to undermine ObamaCare in a different way.
(Read more ObamaCare stories.)

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