Cost-sharing reduction payments to insurance companies under the Affordable Care Act will no longer continue, the Trump administration has announced. The White House cited federal court decisions finding no appropriation was ever lawfully enacted.
“Based on guidance from the Department of Justice,” a White House statement released Thursday night said, “the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare.”
“The United States House of Representatives sued the previous administration in Federal court for making these payments without such an appropriation, and the court agreed that the payments were not lawful,” the statement said.
The White House statement, issued by Press Secretary Sarah Huckabee Sanders, ended on a political note.
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” it read. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
Earlier the same day, President Donald Trump signed an executive order allowing small businesses to group together and purchase healthcare plans for their employees across state lines.
Insurance premiums under Obamacare have “skyrocketed,” Trump said before signing the order. He cited premiums in Alaska going up 200 percent and noted that one-third of all US counties have only one insurer on the Obamacare exchange, while some counties may soon have none at all.
While the changes from the executive order may not take effect for at least several months, due to the rule-making process, this late-Thursday decision may be felt sooner, unless a new court finding recognizes legally-instituted appropriations for the cost-sharing reduction payouts.
This fiscal year, the government paid an estimated $ 7 billion to health insurance corporations, according to the Congressional Budget Office.
Trump has lamented the failure of Congress to fulfill his agenda of repealing and replacing Obamacare. The latest legislative attempt, like others preceding it, lacked key support within the GOP.
Make no mistake about it, @POTUS will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.
— Chuck Schumer (@SenSchumer) October 13, 2017
Despite Republican disunity on the matter, Democrats remain adamant in their opposition to Trump’s proposed reforms and executive orders. On Thursday night, Senate Minority Leader Chuck Schumer went on a Twitter tirade against the president.