President Trump's threat to use Obamacare payments to leverage support from Democrats follows one of his recommendations for business success in "The Art of the Deal," but polls and expert projections suggest that a decision to withhold billions from health insurance companies could not only cost him politically but result in dire consequences for those who rely on medical coverage.
The funds, called "cost-sharing reduction" subsidies, help insurance companies reduce out-of-pocket medical expenses for low-income people who buy coverage on Obamacare's exchanges. Though they are currently being distributed to insurance companies, their future remains uncertain because of ongoing litigation about whether they were illegally distributed, as well as lack of clarity from Republicans on the future of Obamacare.
The ramifications of ending these payments, which are expected to total $7 billion in 2017, are projected to be so explosive that experts have dubbed taking this route the "nuclear option" for undoing Obamacare.
"Many counties could have literally no insurer," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation. "And then there would be no way for people to get tax credits for help people pay for their premiums. It's a complicated domino effect."
The situation hinges on a lawsuit House Republicans filed against the Obama administration in 2014, arguing that the cost-sharing subsidies were unconstitutional because they should have been appropriated through Congress. After a federal judge sided with their position, the Obama administration appealed the case and Republicans moved to delay it earlier this year after Trump won the Oval Office.
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05.05.2024