Trump administration to continue funding insurer subsidies

The Trump administration has asked for a 90-day delay on its decision to appeal a case brought by House Republicans against ObamaCare subsidies paid to insurers.

The payments will continue during the appeals process, which avoids an immediate crisis with the ObamaCare insurance market but still leaves insurers uncertain about the future.

According to an official court filing, the House and the administration are continuing to discuss a solution that would eliminate the need for the court to rule on the appeal, including potential legislation such as the American Healthcare Act.

{mosads}The lawsuit is centered around an estimated $7 billion a year in cost-sharing reductions (CSRs) paid to insurance companies. Insurers participating in ObamaCare rely on the subsidies so they can reduce customers’ out-of-pocket costs, such as deductibles for low-income people.

House Republicans in 2014 sued former President Obama’s administration over those payments, arguing they should have been funded through a congressional appropriation. Last year, a federal judge ruled in favor of the House, but the administration appealed and the money has kept flowing while the appeals process runs its course.

The Trump administration could still decide to drop the appeal at any time. According to a spokeswoman for the Department of Health and Human Services, the subsidies have been paid for May, but there have been no promises made about whether the payments will continue. 

“Going forward, we are weighing our options and still evaluating the issues,” Alleigh Marré, the spokeswoman, said in a statement.

She added that Congress “could resolve any uncertainty about the payments” by approving the House GOP’s healthcare bill “and reforming Obamacare’s failed funding structure.”

President Trump has previously threatened to use the payments to insurers as leverage to bring Democrats to the negotiating table for ObamaCare repeal talks. He’s also tried to use the subsidies to get Democrats to support paying for a border wall, offering one dollar in the payments for every dollar spent on the wall.

House and Senate Democrats were immediately critical of the decision to ask for a delay. In a statement, Senate Democratic leader Charles Schumer (N.Y.) accused the administration of “kicking the can down the road” and called for the subsidies to be funded permanently.
 
“Clearly by today’s action and their decision to make the next payment, the White House realizes that eliminating cost sharing reduction payments would cause chaos in the markets, and they would get the blame,” Schumer said. 

“The administration is continuing to sow uncertainty in the markets that will hurt millions of Americans.”

House Democratic Leader Nancy Pelosi (Calif.) also criticized the administration for delaying, rather than solving, the lawsuit. 

“At a critical period when insurers are deciding premiums for next year, Republicans are pouring uncertainty into the health insurance marketplaces,” Pelosi said.

The insurance industry expressed relief at the delay, but insurers stressed they need certainty.

Insurers need to decide by June whether they will continue to operate in the ObamaCare exchanges, and if the court grants the administration’s request for a delay, companies will have finalized their 2018 premium requests before the end of the three-month window.

“We need swift, immediate action and long-term certainty on this critical program,” Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, said in a statement. “It is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care.”
 
By forcing insurers to price for uncertainty, former Acting CMS Administrator Andy Slavitt on Twitter said the strategy from the Trump administration is to “go for broke” to “force Trumpcare.”
 
If the administration ended the lawsuit, the damage to the marketplace would be explicitly blamed on Republicans, Slavitt said. But Slavitt noted that by continuing to defer the lawsuit, the damage to the marketplace will be the same, but can be blamed on a failing ObamaCare rather than Republican actions.