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18 August 2017, 01:11 | Lucy Hill
President Trump at a listening session with health insurance executives at the White House earlier this year.
Aude Guerrucci Bloomberg Getty Images
President Trump has yet to decide whether he will continue Obamacare's cost-sharing reduction program, which he has repeatedly threatened to remove. After flirting with eliminating these payments to insurance companies, he finally agreed to pay them for the month of August.
The subsidies allow insurance companies to reduce costs for low-income Americans who rely on the Affordable Care Act (ACA).
Insurers are required to lower these costs for qualifying customers, and they rely on the federal Obamacare subsidies in order to make up for their costs. Terminating those subsidies would save the government $8 billion next year and a total of $118 billion through 2026, the budget office said.
But the GOP-led House of Representatives sued the Obama administration in 2014 for paying the reimbursements without having Congress appropriate the money for it. Republicans in Congress, opposed to Obamacare, refused to vote for such spending. The House argued the way the CSRs were paid through the executive branch was illegal, and a judged ruled in their favor in 2016.
While President Trump hasn't made a decision to continue pushing the lawsuit against the Obama administration, multiple Democrat state attorneys have gotten involved, the court giving them permission because they said that they were under-represented by Trump.
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Although many of Trump's advisers oppose the payments, the budget office report Tuesday put them in a hard position. CSR subsidies help lower-to-moderate income people purchase more affordable coverage; 57 percent of those enrolled in the ACA exchanges benefit from this type of subsidy- that's 5.9 million people.
The continuation should be linked to changes in the current law to "give states more flexibility" on the kinds of insurance policies that consumers can buy, he added.
In the wake of Anthem's announcement, Gov. Terry McAuliffe lambasted the Trump Administration, saying it needed "to stop playing politics with people's lives and come together in a bipartisan way" to provide certainty to the insurance industry.
His committee is scheduled to hold bipartisan hearings on stabilizing the health insurance market the week of September 4.
Insurance companies have been pleading with Congress and the administration to continue making CSR payments, as insurance providers are on the hook for $7 billion in CSRs in 2017 and another $10 billion in 2018. "However, this cat-and-mouse game every month has to stop".
A substantial number of insurers offering plans in the exchanges around the country warned that they would increase their premiums for 2018 if the payments are stopped, but what that would mean for consumers is unclear.
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