President Trump’s decision to abruptly cut off federal payments to insurers reverberated through the political world Saturday, putting pressure on Congress to take action to address the high premiums that American consumers could face and jolting the insurance industry.
Trump’s move late Thursday to end federal subsidies that help insurance companies reduce out-of-pocket costs for low- and middle-income consumers also could deepen the divide among Republicans over how to tackle the 2010 Affordable Care Act as the market opens in a little more than two weeks for people to sign up for health insurance.
On Saturday, a broad health industry coalition, which includes health insurance companies, hospitals, the American Medical Association and the U.S. Chamber of Commerce, sent a letter to congressional leaders, urging lawmakers to “take action immediately” to revive the payments.
“Millions will face higher premiums, fewer choices and less access to the medical care they need,” if Congress fails to restore the funds, the trade groups argued.
The Republican leaders who control Congress have pledged to dismantle the health law, but some in the GOP have balked, unwilling to risk the political fallout in states where large numbers of their constituents are insured through Obamacare.
In a tweet Saturday, Senate Minority Leader Chuck Schumer, D-N.Y., called Trump’s decision an example of his “failure to lead.”
The president, he said, “throws destructive bones to his base, then tells Congress to fix it.”
Trump’s move to cut the payments came on the heels of his Thursday executive order allowing consumers to buy insurance through association health plans across states lines. The move could help millions of consumers find access to cheaper insurance plans, but it could drive them into alternative plans that skirt the law’s consumer protections and minimum coverage requirements.
In a pair of early morning tweets Saturday, Trump celebrated his strikes against President Obama’s signature health care law and reveled in the damage it had done to insurance stock prices, which fell sharply Friday on news he was ending the subsidies.
“Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!,” he wrote in one tweet.
The Trump administration, and a group of House Republicans who went to court to challenge the subsidies, say the payments violate the Constitution because they were never specifically authorized by Congress, which controls the federal government’s purse strings.
The federal subsidies, which total about $7 billion this year, benefit about 6 million people, many of whom live in states that backed Trump in the 2016 presidential election.
Ending the payments will hit consumers’ wallets because the health-care law still requires insurance companies to lower costs for their poorest customers. Insurers are likely to make up for those lost federal payments by boosting premiums for consumers who buy their own insurance.
The nonpartisan Congressional Budget Office has estimated premiums could surge by 20% with the loss of subsidies.
A group of 19 Democratic state attorneys general is suing to block the move.
Nevada’s Republican Gov. Brian Sandoval also criticized Trump’s actions, telling The Nevada Independentthat ending the payments will be “devastating” to lower-income consumers.
“It’s going to hurt people. It’s going to hurt kids. It’s going to hurt families,” Sandoval said.
But conservatives groups — such as Americans for Prosperity, affiliated with the Koch brothers — have urged Obamacare’s repeal and this week hailed Trump’s actions to weaken the law.
On Capitol Hill, attention now will turn to an effort under way before Trump’s move by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., to craft a bill that would reinstate the payments in exchange for Republican demands that states have greater flexibility in the kinds of insurance plans they could offer under the federal law.
In their Saturday letter to congressional leaders, the health care and business groups said a bipartisan plan should not only guarantee payments for 2017 but continue funding for the next two years.
Schumer has indicated he would like to see the subsides included in a must-pass spending bill Congress will consider this year, which could set up a showdown before a Dec. 8 appropriations deadline and increase the risk of a government shutdown if both sides can’t reach an agreement.
There’s sharp disagreement among Republicans on how to proceed. For instance, Ohio GOP Rep. Jim Jordan, a staunch conservative, told The Hill newspaper “heck no,” when asked whether he supports Congress reviving the payments. He called the subsidies an insurance company “bailout.”
Repealing the Affordable Care Act has been a rallying cry for Republican candidates ever since the law passed seven years ago, but the Senate has repeatedly faltered in efforts to dismantle it this year.
In a speech Friday to the Value Voters Summit, Trump said Congress had forgotten “what their pledges were. So we’re going a little different route.”
“But you know what? In the end, it’s going to be just as effective,” he said.