SPONSORED:

Trump administration faces decision on ObamaCare payments

Trump administration faces decision on ObamaCare payments
© Getty

The Trump administration will have to decide Monday whether it wants to continue fighting a court decision that could undo one of ObamaCare’s key features.

If the White House drops its appeal in a lawsuit over ObamaCare cost-sharing reduction (CSR) payments to insurers, it could fast-track the end of the health law — something Republicans have made a major campaign promise for years. 

But administration officials are wary of ending the lawsuit, because they know that doing so would send the insurance markets into chaos. Insurers have warned of massive premium hikes or threatened to exit the ObamaCare exchanges completely if the payments don’t continue, and recent polls suggest Republicans would be blamed.

President Trump has publicly waffled on whether he will continue the payments. At times he’s threatened to withhold them, let the ObamaCare markets collapse and blame Democrats. Other times, he’s acknowledged the political risks and said the payments would continue. 

As he decides, the administration remains in a difficult spot, paying money to support a law it is actively trying to repeal. The White House must update the U.S. Court of Appeals for District of Columbia by Monday on how it wants to proceed.

ADVERTISEMENT

An administration official told The Hill that “the White House has told Congress that it will make the May CSR, but has not made any commitment on further payments. No final decisions have been made at this time, and all options are on the table.”


The legal battle at the center of the decision came from a 2014 lawsuit by House Republicans against the Obama administration over an estimated $7 billion a year 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.

When Trump won the election, House Republicans successfully asked for a delay in the case by arguing changes to ObamaCare were likely. The administration could ask for another 90-day delay and let the appeals process continue. 

Tim Jost, a professor emeritus at the Washington and Lee University School of Law, said another delay is likely.

“Trump would like to just not pay the CSRs, but that would cause tremendous problems for insurers,” Jost said. “Certainly they’d raise premiums dramatically for 2018 or not come back at all, and millions of people would probably lose health insurance coverage.”

The lack of commitment from the White House about further payments hasn’t eased insurers’ anxiety.

“The uncertainty not only makes it difficult for plans to develop sound, affordable products but creates great anxiety for working families in need of that coverage,” Ceci Connolly, president and CEO at Alliance of Community Health Plans (ACHP), which represents non-profit insurers, said in a statement provided to The Hill. 

“Without the subsidies, health plans face painful choices."

Senate Republicans, who are trying to stabilize the ObamaCare markets while also attempting to craft a repeal bill, said they understand why the payments need to continue. 

“Objectively, the absence of CSRs introduces uncertainty, and insurance companies hate uncertainty,” Sen. Bill Cassidy (R-La.) said last week. “And I do think we need to stabilize the market.”

Even in the House, some Republicans have said the payments need to continue to keep the markets stable. The House’s ObamaCare repeal bill, which narrowly passed earlier this month, would keep the CSRs until 2020. 

Speaker Paul RyanPaul Davis RyanMcCarthy faces pushback from anxious Republicans over interview comments Pelosi and Trump go a full year without speaking Jordan vows to back McCarthy as leader even if House loses more GOP seats MORE (R-Wis.) has repeatedly said he thinks stopping the payments would destabilize the ObamaCare markets. 

Democrats to include funding for the CSR payments in the year-end spending bill, but lawmakers ultimately left it up to the administration when the White House said it would keep the payments going. 

Congress could still appropriate the payments in a future spending bill, but it will be too late for insurers who need to decide by June whether to continue participating in the exchanges.

Outside of the CSR payments, Jost said the Trump administration has a legal reason for wanting the appeal to continue.

The lawsuit brought by the House was unprecedented in terms of its effect on the constitutional separation of powers. If it’s upheld, there could be precedent for the House to sue a sitting president.

If Democrats retake control of the House in 2018, “presumably Trump doesn’t want to deal with getting sued every time there’s an appropriation disagreement,” Jost said.

Peter Sullivan contributed.