WASHINGTON — President Donald Trump may be using Obamacare subsidy payments as a political bargaining chip to get the Senate to try one more time to repeal and replace former President Barack Obama’s landmark health care legislation.
A White House spokesman told The Daily Caller News Foundation that the Trump administration will continue making Obamacare subsidy payments through August. These payments are for a little known feature of Obamacare–cost-sharing reductions (CSRs)–that help low-to-moderate income individuals purchase health insurance. (RELATED: Trump Will Continue Paying Obamacare Subsidies)
The administration has been making CSR payments on a month-to-month basis, in the face of an impending lawsuit filed in 2014.
The House filed suit against the Obama administration in 2014 under the leadership of former Speaker John Boehner, claiming it was illegally reimbursing marketplace insurers for CSRs.
After nearly two years of deliberation, a federal district court concluded the House’s claim had legal standing and allowed the case to move forward in May, 2016.
The Obama administration appealed the decision, which was followed up with three Republican delays, including one under the Trump administration. Both parties in the suit are set to go before a judge once again in late October.
Senators are scheduled to return to Washington on Sept. 5 after the month-long August recess. Republican leadership has its eyes locked in on pushing tax reform, which the administration and K street believe will make its way through Congress and onto Trump’s desk in November. (RELATED: White House Lays Out Ambitious Deadline For Tax Reform)
The president might have another plan for senators when they return to Washington, one that would revive health care reform and put tax reform, which has the most promise of passing both chambers of Congress, on the backburner. Trump wants the Senate to fulfill its promises to repeal and replace Obamacare, and inaction is not an option, a White House spokesman told TheDCNF Thursday afternoon.
To force senators’ hands to address health care reform another time, Trump may be looking to cut off federal funding for Obamacare subsidy payments. The president threatened to end these payments twice after the Senate failed to overhaul Obamacare in late July. (RELATED: Trump Threatens To Cut Obamacare Subsidy Payments)
The strategy, while risky, definitely has some teeth to it, as it puts insurance companies and members of Congress in a tight spot.
Health insurance providers are on the hook for $7 billion in CSRs in 2017 and another $10 billion in 2018. If Trump decides to cut funding, he puts insurers who are already paying out billions in CSRs in hot water, leaving them without any chance of reimbursement from the federal government.
Due to the way Obamacare is structured, if Trump chooses to not reimburse insurers for CSRs, insurers would be forced to increase plan premiums. Insurers will not simply eat the difference between what the enrollee pays and what they are left to cover. The excess cost will be shifted to the larger consumer base through higher premiums.
The Congressional Budget Office (CBO) announced Tuesday afternoon that premiums would rise 20 percent in 2018 and 25 percent in 2020 if Trump’s administration stops paying out Obamacare subsidies.
Higher premiums would, in turn, put members of Congress in a rough position with their constituents. The chief point of contention with Obamacare for consumers are the higher premiums. If the premium problem gets worse after Trump stops funding CSRs, and Congress chooses not to call the president’s bluff, the blame will fall on congressmen as much as it will the administration.
Tax reform and infrastructure–two of the pillars of the president’s policy platform–seem like the obvious paths forward for both the administration and Republicans trying ardently to score the first major legislative victory of Trump’s presidency.
The Senate failed three times to come to a consensus on health care reform in late July. Following the rather humiliating defeat wherein 3 Republican senators–John McCain of Arizona, Lisa Murkowski of Alaska and Susan Collins of Maine–voted down the party’s last-ditch proposal to overhaul the American health care system, a handful of senators in leadership called for the party to move towards tax reform and drop health care entirely.
Democrats have even signaled their willingness to work with Republicans to accomplish comprehensive tax reform, and infrastructure has long been a campaign platform of the Democratic Party. Yet, the president has repeatedly said that health care must come before tax reform and infrastructure–a point he does not appear to be backing away from.
If the Senate were to try picking up the repeal effort once more, they would be doing it under the Senate’s budget reconciliation process, which requires that every provision or amendment have a direct impact on the budget. It also allows Senate leadership to bypass a Democratic filibuster and pass a reform bill with only 50-yes votes, with Vice President Mike Pence acting as the tie breaker.
Senators would only be able to use the 2017 reconciliation process through September 30, at that point Congress would have to pass another budget resolution to continue to use the legislative loophole to push health care reform. The Senate Parliamentarian considering whether or not the Senate could continue to use the 2017 rules past the September 30 date, a move that has no precedent
Congress has other looming threats, like the impending debt ceiling crisis, that could not only thwart another swipe at repealing Obamacare, but could work to upend the timeline for the administration’s other legislative priorities. Lawmakers in the House and a third of the Senate will be up for re-election in 2018, which means the legislative body has only four months to focus on policy before honing in on the campaign trail.
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