President Trump is trying to force Congress to try yet again to repeal and replace the Affordable Care Act by threatening to withhold the law’s cost-sharing reduction payments to health insurance companies participating on the exchanges.
Trump tweeted on Saturday: “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” The latter is referring to subsidies made available to members of Congress and their staff, similar to those made by employers to pay for their workers’ health insurance premiums.
On Monday, the President kept up his threat, tweeting, “If ObamaCare is hurting people, & it is, why shouldn’t it hurt the insurance companies & why should Congress not be paying what public pays?”
The requirement for the federal government to make CSR payments were put in the ACA to help insurers offset health care costs for low-income Americans receiving subsidies, and the next payment is due on August 21.Health and Human Services Secretary Tom Price said Sunday said on NBC’s “Meet the Press” that the administration’s “job is to follow the law of the land” and that “we take that responsibility very seriously and we will continue to do so.”
But when asked by Chris Wallace on “Fox News Sunday” whether Trump is going to cut off the CSR payments, White House counselor Kellyanne Conway said, “He’s going to make that decision this week, and that’s a decision that only he can make.”
Conway added that the president “will not accept those who said, quote, ‘it’s time to move on,’” an apparent reference to Senate Majority Leader Mitch McConnell’s comments that he’ll move on to other legislative business now that the latest repeal and replacement effort failed on Friday, according to Bloomberg.
Andrew Slavitt, acting administrator of the Centers for Medicare and Medicaid Services in the Obama administration, told Bloomberg that the impact of cutting off subsidy payments “will be felt by the middle class who will pay more to subsidize low income” people.
Industry experts for months have been warning of dire consequences should the Trump administration cease making CSR payments, according to Business Insider.
“If cost-sharing subsidy payments are pulled, insurers would still have to provide lower deductible plans to low-income consumers, but they wouldn't get paid the $7 billion a year it costs to do that," Larry Levitt, a senior vice president at the Kaiser Family Foundation, told Business Insiderin an April email. “In theory, insurers could raise premiums to make up the losses, but there would be uncertainty associated with that.”
To offset the loss of money from the CSR payments, insurers would have to raise premiums by an average of 19 percent more than the current projected increase for 2018, according to a Kaiser study. Some states could face even higher price hikes, such as 27 percent above current projections in Mississippi.
“Ending the cost-sharing payments would be a clear signal from the Trump administration that they are not aiming to run the ACA marketplace effectively, so insurers would likely just throw up their hands and leave the market,” Levitt writes. “The uncertainty and ambiguity is already giving insurers pause about staying in the market for 2018.”
Insurance companies have until late September to raise rates and finalize their coverage areas for 2018, according to Business Insider.
“If there is not more clarity on what the administration will do, a large number of insurers will most likely abandon the market, and the 12.2 million Americans in the exchanges will be left with little choice for coverage in 2018,” Business Insiderwrites.
Douglas Holtz-Eakin, president of the American Action Forum, writes that if Trump makes good on his threat, Congress would then be put “in the position of having to appropriate the necessary $8 billion or so” to fund the CSR payments.
Alternatively, the Trump administration could continue the CSR payments, and also its appeal of the 2014 lawsuit the Republican-controlled House, that the Administration did not have the authority to make the CSR payments without an explicit Congressional appropriation. The original defendant was the Obama administration, but now that Trump is president, the lawsuit’s name has been changed to United States House of Representatives v. Price, et al, in reference to HSS Secretary Price.
“It’s not clear what happens now,” Holtz-Eakin writes. “The only thing that is clear is that the CSR issue has been a factor in participation and pricing decisions for 2018, and a source of possible disruption in 2017.
Liberal groups are gearing up to fight Trump’s efforts to “sabotage” the ACA, now that the repeal and replacement effort has failed, according to Axios.
“In the 48 hours since progressives won the repeal vote, there were more than 170 rallies and events all over the country to fight back against repeal and sabotage,” Progressive activist Jesse Ferguson emailed Axios.
Meanwhile Sen. Susan Collins (R-Maine), one of the senators to reject the GOP’s “skinny repeal bill,” said on CNN’s “State of the Union” “I certainly hope the administration does not do anything in the meantime to hasten that collapse.”
Instead, she said, the Senate, through committee action, should produce a series of bills aimed at addressing pressing issues in health care — with the most immediate priority being to stabilize the insurance markets.
“The ball is really in our court right now,” Collins said. “Our job is not done.”