Updated at 11:40 p.m. ET
The Trump administration said Thursday that it would end the Affordable Care Act’s cost-sharing reduction payments designed to help low-income Americans get health care. Not paying the subsidies, health care experts have warned, could send the health insurance exchanges into turmoil.
The payments, which started under the Obama administration, had been continued by President Trump, despite his strong opposition to the ACA. But the subsidies had never been funded by Congress, and the White House on Thursday said since there was no appropriation for it, “the Government cannot lawfully make the cost-sharing reduction payments.”
“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,” the White House said in a statement. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
The decision ends speculation about whether the Trump administration would continue making the monthly payments to insurers. That money particularly helps people earning between 100 percent and 250 percent of the poverty level pay for the insurance and health care they get through the exchanges set up by the Affordable Care Act, also known as Obamacare.
Ending the payments could cause premiums to spike, push insurers out of the marketplace, and even cost the government $2.3 billion more than it would otherwise spend, according to one analysis.
t was not clear when the payments, known as CSRs, would end.
The news was not received well by Democratic leaders on Capitol Hill. In a joint statement, House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Sen. Chuck Schumer, D-N.Y., called the move “a spiteful act of vast, pointless sabotage.”
If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!
— Donald J. Trump (@realDonaldTrump) July 29, 2017
“Sadly, instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans’ health premiums,” the leaders said in a statement. “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.”
The CSRs are a key part of keeping Obamacare working, but they have been threatened since 2014. That’s when House Republicans filed a lawsuit against the Obama administration, arguing that the CSRs are unconstitutional because Congress had not appropriated the money — rather, the administration was paying the money on its own.