Trump to end key ACA subsidies, a move that will threaten the law’s marketplaces

Trump to end key ACA subsidies, a move that will threaten the law’s marketplaces

President Trump is throwing a bomb into the insurance marketplaces created under the Affordable Care Act, choosing to end critical payments to health insurers that help millions of lower-income Americans afford coverage. The decision coincides with an executive order on Thursday to allow alternative health plans that skirt the law’s requirements.

The White House confirmed late Thursday that it would halt federal payments for cost-sharing reductions, although a statement did not specify when. Another statement a short time later by top officials at the Health and Human Services Department said the cutoff would be immediate. The subsidies total about $7 billion this year.

Trump has threatened for months to stop the payments, which go to insurers that are required by the laws to help eligible consumers afford their deductibles and other out-of-pocket expenses. But he held off while other administration officials warned him that such a move would cause an implosion of the ACA marketplaces that could be blamed on Republicans, according to two individuals briefed on the decision.

President Trump is throwing a bomb into the insurance marketplaces created under the Affordable Care Act, choosing to end critical payments to health insurers that help millions of lower-income Americans afford coverage. The decision coincides with an executive order on Thursday to allow alternative health plans that skirt the law’s requirements.

The White House confirmed late Thursday that it would halt federal payments for cost-sharing reductions, although a statement did not specify when. Another statement a short time later by top officials at the Health and Human Services Department said the cutoff would be immediate. The subsidies total about $7 billion this year.

Trump has threatened for months to stop the payments, which go to insurers that are required by the laws to help eligible consumers afford their deductibles and other out-of-pocket expenses. But he held off while other administration officials warned him that such a move would cause an implosion of the ACA marketplaces that could be blamed on Republicans, according to two individuals briefed on the decision.

Health insurers and state regulators have been in a state of high anxiety over the prospect of the marketplaces cratering because of such White House action. The fifth year’s open-enrollment season for consumers to buy coverage through ACA exchanges will open in less than three weeks, and insurers have said that stopping the cost-sharing payments would be the single greatest step the Trump administration could take to damage the marketplaces — and the law.

Ending the payments is grounds for any insurer to back out of its federal contract to sell health plans for 2018. Some states’ regulators directed ACA insurers to add a surcharge in case the payments were not made — but insurers elsewhere could be left in a position in which they still must give consumers the discounts but will not be reimbursed