The White House will stop paying vital subsidies that offset the costs for insurers of covering lower-income people, White House Press Secretary Sarah Huckabee Sanders confirmed in a statement Thursday.
“The Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies lawfully under Obamacare,” Sanders’ statement said.
There it is. No more cost sharing subsidies. pic.twitter.com/6bkjhpjzDV
— Margot Sanger-Katz (@sangerkatz) October 13, 2017
The statement went on to call the CSR payments “the bailout of insurance companies through unlawful payments.”
The news was first reported by Politico Thursday night and later confirmed by the White House.
The payments, called cost-sharing reductions (CSRs), are the subject of a lawsuit filed by House Republicans during the Obama administration, which House Republicans won. The Obama administration appealed and continued making the payments, which are worth an estimated $7 billion per year.
Trump can simply drop the appeal and stop making the payments, which he’s suggested he may do in the past. The move will will likely trigger lawsuits from insurers who rely on the funding.
Many insurers did anticipate the move. When providers filed their rate requests earlier this year, many who requested increases cited concerns that Trump would stop making the CSR payments as reason for requesting increases.
Politico’s Thursday night report came hours after Trump signed into law an executive order loosening Obamacare restrictions after having tried and failed a number of times to repeal and replace the Affordable Care Act in Congress.
This story has been updated to include the White House statement.