President Donald Trump’s administration and House leadership are working on a solution to ensure the federal government continues to provide Obamacare subsidy payments to low and moderate income individuals.
The president and Speaker of the House Paul Ryan are expected to file a motion Monday with the U.S. Court of Appeals for the District of Columbia Circuit, seeking an extra 90 days in the ongoing battle over funding Obamacare cost-sharing reductions (CSRs).
Under the leadership of former Speaker John Boehner, the House filed suit against the Obama administration in 2014, claiming it was illegally reimbursing marketplace insurers for a little known feature of Obamacare: CSRs.
Obamacare requires insurers to provide CSRs to low and moderate income individuals who participate in the exchanges. To make consumers put more “skin in the game,” Obamacare effectively raised deductibles to levels that are tough for many Americans to meet without some financial support — a consequence of bringing millions of new consumers into the health insurance marketplace. CSRs were instituted to help insurers with the costs of the deductibles patients can’t otherwise meet.
Boehner believed that under Obamacare, CSRs require an annual appropriation from Congress. Essentially, lawmakers should consider, debate and agree upon the program’s funding each year during budget hearings.
The House argued that because Congress had never explicitly appropriated the funds for those payments, the administration’s actions were unconstitutional. After nearly two years of deliberation, Senior Judge of the U.S.District Court for the District of Columbia Rosemary M. Collyer concluded the House’s claim had legal standing and allowed the case move forward May 12, 2016.
The Obama administration then appealed the decision. The case remains open with no definitive ruling. Republicans have pushed back the court date twice. In February, the court approved a hold until May 22 that Trump and Ryan sought. (RELATED: 3 Events That Could Rattle Obamacare Reform)
The president reportedly told aides in the Oval Office Tuesday that he is willing to cut funding for CSRs and Obamacare subsidies all together. Trump believes he has nothing to lose in gutting them. He reportedly said that if lawmakers want to keep paying CSRs, they can find a way.
Trump and Republican leadership’s decision to seek a continuance in the case could have some troubling effects on the insurance market, as it creates a great deal of uncertainty in the marketplace.
Essentially, uncertainty for insurance providers as to whether or not the administration will continue paying CSRs ensues with no end in sight. Insurers may make hasty decisions or try to compensate for the uncertainty in other means, like raising prices for other consumer groups to make up the difference or by withdrawing from insurance markets altogether.
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