White House reverses O-Care subsidy cuts

The White House is reversing course and protecting ObamaCare's cost-sharing subsidies from cuts under the across-the-board budget sequester.

The move is the latest executive action by the Obama administration to avoid bad consequences for the healthcare law, and is sure to elicit criticism from Republicans.


The change was revealed in this week's report from the White House budget office explaining how the sequester will impact spending in 2015.

Last year, the Office of Management and Budget (OMB) said the subsidies would face a roughly 7 percent cut under sequestration.

Budget officials changed that in their latest report, removing the subsides from a list of programs the sequester will hit.

The about-face was first discovered by the Committee for a Responsible Federal Budget, which said the move "could be considered a big win" for ObamaCare.

"Over the coming ten years, this exemption effectively translates to about $10 billion in restored cost-sharing subsidies," wrote research director Loren Adler.

The cost-sharing subsidies are the lesser-known cousin of ObamaCare's tax credits, which make health plans more affordable.

The payments, which go directly to insurance companies, are intended to help low-income people decrease spending on medical co-pays, deductibles and other out-of-pocket costs.

The better known subsidies were not subject to sequester cuts because they are administered as tax credits.

Now, officials have chosen to combine administration of the two subsidies, meaning the cost-sharing payments are not subject to cuts, either.