President Donald Trump has frequently suggested that Obamacare is “collapsing” and predicted that statewide marketplaces will soon cease to function. But if the health care law doesn’t fall off a cliff on its own, he appears more than willing to give it a push.
On Friday —amid a storm of Russia-related leaks and news of the president’s imminent departure for Saudi Arabia — Politico reported that Trump has quietly decided to end approximately $7 billion annually in cost-sharing subsidies for low-income people who purchase their health care on the Obamacare exchanges. Each year, these payments help reduce the co-payments and deductibles of approximately 7 million low-income people who get their insurance on the marketplaces.
Ending these payments wouldn’t just hurt those 7 million people. Without those subsidies to keep their lower deductible plans afloat, some insurance companies would likely exit the Obamacare marketplaces — or hike their premiums to compensate for the shortfall. The result could be a devastating ripple effect through the entire private marketplace system.
Trump has threatened to kill off the cost-sharing subsidies before, but seemed to back down after House Minority Leader Nancy Pelosi (D-CA) said Democrats would be willing to shut down the government if continued payments weren’t guaranteed.
On Friday, eight concerned parties — including the American Medical Association, BlueCross BlueShield, the Federation of American Hospitals, and the U.S. Chamber of Commerce — sent a joint letter to the Senate leadership of both parties, urging them to pass legislation that would ensure the cost-sharing payments continue.
“The individual market is their only option for getting coverage. Unless CSRs [cost sharing reductions] are funded, a tremendous number of Americans will simply go without coverage and move to the ranks of the uninsured,” they wrote. “This threatens not just their own health and financial stability, but also the economic stability of their communities.”