Facing shutdown, Democrats shift on insurance payments

House Democratic Whip Steny Hoyer on Tuesday said that Obamacare payments for insurers should not be part of negotiations over a government funding bill, a shift from a position Democratic leaders took earlier this month.

“This is not a negotiation with the Democrats,” the Maryland lawmaker said. “The president needs to make a determination on whether he is going to follow the law that was passed and provide these payments.”

Asked by a reporter whether he would encourage Democrats to reject a bill that did not include funding for the subsidies, Hoyer replied, “We believe the president ought to fund it. It doesn’t need to be in the [spending bill]. The president has the authority to go ahead and do it. And he ought to do it.”

Democrats this month had said they would be pushing to include the funds, called “cost-sharing reduction subsidies,” in the spending bill, though such a move risks strong opposition from House Republicans and could result in a partial government shutdown. The subsidies reimburse insurers for reducing out-of-pocket medical expenses for low-income people and are being allocated. They could be halted through a court order or by the Trump administration dropping an Obama administration appeal.

Without the subsidies, insurers would look to raise premiums or leave the Obamacare exchanges, both of which would cause people to lose coverage. According to an analysis from the Kaiser Family Foundation, spending from the federal government also would increase.

The precarious future of the funds dates to a lawsuit House Republicans brought against the Obama administration, in which they argued the funds were illegally being paid because they must be allocated through Congress. Democrats and the Obama administration countered that the funds are provided in Obamacare, as Hoyer said during the press conference, but a federal judge sided with the House in the lawsuit, which was later appealed by the Obama administration.

The Trump administration this week offered to pay for the subsidies in exchange for Democratic support on funding a border wall between Mexico and the United States, but Democrats called the proposition a “non-starter.” On Tuesday, aides said that negotiations over the wall had been dropped from the spending package.

It’s not clear what the next move will be from Republicans regarding the subsidies. Senate Majority Leader Mitch McConnell, R-Ky., did not speak specifically about the funds during a press conference, but said broadly that he hoped lawmakers could reach an agreement on the spending bill “in the next few days.” A deal must be reached by April 28 to avoid a partial government shutdown.

Some Republicans, including Reps. Tom Cole of Oklahoma and Greg Walden of Oregon, have said they would be willing to allow for the payments.

When asked about whether the subsidies should be allocated, Sen. Bill Cassidy, R-La., replied: “I think it is good to clean up the mess. I think we need to ensure that Americans keep their coverage. It has to be appropriated by Congress.”

Washington Examiner reporters Al Weaver and Robert King contributed to this report.

UPDATE: Hoyer’s office later released a follow-up statement on the matter: “Cost-sharing reductions are and should continue to be permanent, mandatory funding. That is the law. While having clarifying language in the omnibus would be helpful, it is not a quid pro quo that Republicans are giving to us to get funding for a border wall or other partisan priorities. Republicans created this problem for themselves. President Trump can instruct his administration today to make clear that the cost-sharing reduction payments will continue to be made. If President Trump does not continue cost-sharing reduction payments, or House Republicans succeed in stopping the subsidies in the courts, millions of Americans will be adversely impacted. Republicans know that and should recognize that continuing cost-sharing reduction payments is something that they need to do for the American people, not as a ‘give’ to Democrats'”

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