Democrats and some Republicans are fighting attempts by President Trump to label payments to insurers for lowering deductibles for poor people as "bailouts."
The pushback could play a key role in landing enough political support for a short-term bipartisan deal to stabilize Obamacare's exchanges, including making the insurer payments. Lawmakers and experts say the cost-sharing reduction payments to lower deductibles and co-pays, known as CSRs, are honoring an agreement to reimburse Obamacare insurers and are not bailouts.
Trump has shown little interest in a bipartisan healthcare package after the Senate's narrow defeat of legislation to partially repeal and replace Obamacare late last month.
Soon after the Senate voted 49-51 on July 28 against a "skinny" repeal bill, President Trump tweeted that if a new healthcare bill isn't brought up again, then "BAILOUTS for insurance companies" would end soon.
Trump likely was referring to cost-sharing reduction payments. He has the power to decide whether to make the payments and hasn't told insurers if they will be made next year.
In 2016, the Obama administration paid $7 billion in cost-sharing payments to insurers.
But a centrist Republican said that the cost-sharing payments aren't a bailout.
"When I hear them described as insurance company bailout that is just not an accurate description," said Sen. Susan Collins, R-Maine. Collins was one of three Republicans — alongside Lisa Murkowski of Alaska and John McCain of Arizona — who voted to sink the skinny bill aimed at starting new repeal talks with the House.
"The reason we have CSRs is to help low-income people who are only between 100-200 percent of the poverty rate afford out-of-pocket costs," Collins said.
A version of the Senate's repeal and replace Obamacare bill included funding for the CSRs for 2018 and 2019.
Other Republicans have called for continuing the payments, including Rep. Kevin Brady, R-Texas, chairman of the powerful House Ways and Means Committee. Sen. Lamar Alexander, R-Tenn., called for Trump to continue the payments at least until he can craft a bipartisan proposal with Sen. Patty Murray, D-Wash., to fund the payments for next year. Alexander and Murray are the chairman and top Democrat, respectively, on the Senate Health, Education, Labor and Pensions Committee.
Some experts say it is inappropriate to call the CSRs a "bailout."
"The insurance companies now by law are required to lower the deductibles under the Affordable Care Act," said Cynthia Cox, associated director of health reform for the nonpartisan Kaiser Family Foundation. "Also in the law it says they would receive reimbursement for those costs."
Democrats said Trump is trying to actively sabotage Obamacare's exchanges by not making the payments.
Senate Minority Leader Chuck Schumer pointed out last week that some insurers are planning to raise insurance rates more than planned if the CSR payments aren't made, adding that three states said premiums would be 20 percent higher if cost-sharing payments aren't made in 2018.
Obamacare supporter and independent analyst Charles Gaba estimated that carriers in 40 states are requesting an average 28 percent price hike in 2018 if CSRs aren't made. If the payments are made, the increase would be half that.
Schumer bashed Trump on the Senate floor Aug. 1 for threatening to withhold the payments.
"Why would he raise people's rates?" Schumer said. "His only stated reason is petty, childish and unpresidential. He will get back at people because his hope to repeal and replace was rejected."
But further complicating the matter is the legality of the payments. The House sued the Obama administration in 2014 over the payments, saying they were illegal because they weren't appropriated by Congress.
A federal judge agreed with the House, but stayed her ruling until after the 2016 election. The White House changed hands, but the Trump administration hasn't decided what to do about the lawsuit.
The White House could drop the Obama administration's appeal, which would let the judge's ruling stand. That would mean Congress would have to fund the payments.
Insurers have to sign their final contracts with the federal government to sell Obamacare plans by Sept. 27. That date could be changed, however, to give Congress time to pass legislation to make the payments.
Open enrollment for 2018 plans is set to start on Nov. 1.