A routine court filing may bring about the beginning of the end of Obamacare’s insurance exchanges.
On Monday the Trump administration and the House must give a status report to a federal court on an appeal of a lawsuit over insurer subsidies. While the filing seems innocuous, it is an opportunity for Trump to immediately end the insurer subsidies.
If that happens, insurers could raise prices dramatically to cover the lost subsidies or leave the Obamacare exchanges altogether.
Ending an appeal made under the Obama administration is just one of the options. Trump and the House could simply ask for a delay or continue the appeal while they figure out what to do next.
But insurers are searching for any signal that the subsidies, called cost-sharing reduction payments, will be made in 2018 since they are formulating their plans.
The cost-sharing payments, which reimburse insurers for reducing co-pays and deductibles for low-income Obamacare customers, will continue for this month, a White House aide told the Washington Examiner.
It has not made a commitment beyond the next few weeks.
“No final decisions have been made at this time, and all options are on the table,” the aide said.
Insurers are required under Obamacare to lower copays and deductibles for low-income Obamacare customers, with the government reimbursing them.
The federal government paid out $7 billion in cost-sharing payments to about 6 million people last year.
The House filed a lawsuit in 2014 saying that the payments needed to be appropriated by Congress. It charged that the Obama administration had illegally bypassed the legislative branch to make the payments.
A federal judge agreed with the House in 2016 that the payments needed a congressional appropriation. However, the ruling was delayed from going into effect until appeals were exhausted.
The Obama administration appealed the ruling, but Trump hasn’t made a decision whether to continue the appeal.
Reports say that Trump isn’t a big fan of the subsidies. Politico reported Friday that Trump told White House aides on Tuesday that he wants to end the payments.
But members of his administration, chiefly Health and Human Services Secretary Tom Price, are leery of ending the payments due to the fallout from insurers leaving.
Another option is that Trump could drop the appeal and Congress could make an emergency appropriation for the payments.
Lawmakers are under pressure from key lobbying groups to continue making the payments. On Friday a collection of insurance, business, doctor and hospital groups wrote to Senate leadership urging action to keep the insurer payments through next year.
“There is now clear evidence that this uncertainty is undermining the individual insurance market for 2018 and stands to negatively impact millions of people,” the letter said.
Senators have been talking about a short-term bill to stabilize the individual market but haven’t made any final decisions. Insurers want the Senate to act fast, as they face a June 21 deadline to submit rates for healthcare.gov, used by customers in 38 states and the District of Columbia to pick Obamacare plans.
A handful of state-run exchanges have publicly released rates, with many in the double digits. Other insurers have already left.
