President Donald Trump could be just weeks away from fulfilling his threat to explode the Obamacare market by halting crucial payments to health insurance companies, and House Speaker Paul Ryan (R-Wis.) has declared he’s not planning to do anything about it.
During a telephone call Tuesday evening, White House Office of Management and Budget Director Mick Mulvaney told House Minority Leader Nancy Pelosi (D-Calif.) that the Trump administration may withhold next month’s distribution of cost-sharing reduction payments, or CSRs, according to a House Democratic aide who asked not to be identified. Those payments reimburse insurers who serve the lowest-income people who get coverage from the Affordable Care Act’s health insurance exchanges.
Democrats have been pushing to make sure those payments continue ― either by having the Trump administration continue to dispense them, by relying on its own authority to do so, or by having Congress appropriate the money directly. An obvious vehicle for the latter would be the omnibus spending bill, now under consideration in Congress, that is supposed to fund government operations past April 30.
“Pelosi reiterated the Democratic negotiators’ position that CSR payments must be included in the omnibus. Mulvaney indicated that, while the Trump administration had continued the CSR payments, they had not yet decided whether they would make the May payment,” the aide wrote in an email.
A spokesperson for the Office of Management and Budget disputed some parts of this account, but did not deny Mulvaney’s comments about the possibility of stopping insurer payments after May. And in written statement, Mulvaney made clear the administration was not eager to see the subsidies as part of the omnibus spending bill ― calling them “an 11th hour bailout of Obamacare.”
Over on Capitol Hill, Ryan confirmed that the omnibus spending bill won’t include the funding. “Obviously CSRs, we’re not doing that. That is not in an appropriation bill. That is something separate that the administration does,” Ryan said.
The consequences of halting these payments to health insurance companies could be devastating for people who buy coverage on their own, rather than through employers. Insurers would face higher costs, and in many states they could respond by cancelling coverage for the rest of 2017.
Even to the extent insurers decided to stay in the markets, this year or next, they would have to raise premiums for 2018 by an average of 19 percent, according a projection by the Henry J. Kaiser Family Foundation.
The possibility doesn’t appear to be hypothetical. On an earnings call Wednesday morning, Anthem Blue Cross Blue Shield, the nation’s second-biggest insurer and largest player on the health insurance exchanges, said it expected to raise rates by 20 percent ― or maybe pull out of markets altogether ― if CSR funding stopped.
That’s why the insurance lobby, other health care interest groups and business organizations like the U.S. Chamber of Commerce have made maintaining this funding a key priority.
Trump repeatedly has threatened to allow the Obamacare insurance markets to wither under his watch either through inaction or by halting federal payments to health insurance companies. He’s made the threats both before and after last month’s collapse of the House Republican effort to repeal the Affordable Care Act and enact a measure that would cover 24 million fewer people.
Trump’s odd gambit is that voters will blame Democrats ― the party that enacted the Affordable Care Act ― rather than Republicans ― the party that controls the entire federal government now ― for the fallout from his actions. Polls have repeatedly indicated the opposite ― that voters will hold Trump and the Republicans responsible for what happens to health insurance.
But amid House Republican indecision about health care reform overall and the messy process of keeping the federal government from shutting down despite GOP control of Congress and the White House, Mulvaney’s and Ryan’s statements indicate that threat could become a reality soon.
Cost-sharing reduction payments have been a critical part of the Affordable Care Act since its benefits took effect in 2014, not a post-facto provision added to the law to “bail out” insurance companies as Mulvaney implied.
Under the Affordable Care Act, the poorest enrollees into private health plans purchased through the exchanges receive two forms of assistance. The first are the tax credits that reduce monthly insurance premiums, which are available to people who earn up to four times the federal poverty level, or $48,240 a year for a single person. Those whose incomes are below 250 percent of poverty, or $30,150 for a single person also are eligible for cost-sharing reductions that make out-of-pocket costs like deductibles and co-payments lower, as well.
Health insurance companies are required by the law to reduce these out-of-pocket costs for qualified customers, and then the federal government is obliged to reimburse them for the lost money. Insurers would still have to cut cost-sharing for enrollees even if the government payments weren’t made, and absorb the losses that would result.
The reason the money may stop flowing and that Trump has the authority to unilaterally end them stems from a 2014 lawsuit House Republicans filed against former President Barack Obama’s administration. The House GOP argued that Obama unlawfully made these payments without Congress authorizing the spending.
While the Affordable Care Act sets out the obligations on insurers to provide lower cost-sharing to eligible customers and the process by which the government pays them back, Republicans maintain Congress still needs to appropriate the actual dollars.
Last year, a federal judge ruled for the GOP, prompting the Obama administration to appeal. The judge agreed to stay the decision, allowing the federal government to continue making payments as the case works its way up through the courts.
When Trump became president, his administration became the defendant in the case. The Trump administration and House Republicans obtained delays from the appeals court while they decided how to proceed.
Like Obama, Trump has continued to make the payments in the meantime, but has always had the power to end them at any point. That point may come next month. Congress could have appropriated the funding earlier and resolved the dispute in that fashion. At several points in the last few weeks, prominent Republicans indicated they were inclined to go along ― perhaps as part of the spending bill that Democrats and Republicans are now negotiating.
But Ryan made clear Wednesday that’s not currently on the table, as far as he’s concerned.
Matt Fuller contributed reporting.
— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
Post a Comment