The White House announced late Thursday that the administration has concluded it can no longer legally make critical Obamacare “cost-sharing” payments, dealing another blow to the struggling 2010 health law.
The payments had specifically been denied by Congress but President Obama had made them anyway, drawing a rebuke from a court who said he was overstepping his powers. The case has raged for months, and both the Obama and Trump administrations had continued making payments – until now.
White House press secretary Sarah Huckabee Sanders, in a statement, said the Justice Department has concluded the judge’s ruling is correct, and there is no valid legal ability to make the payments.
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” Mrs. Sanders said. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
The statement doesn’t explicitly say Mr. Trump won’t make the payments anymore, but given the administration’s legal argument that appears likely.
The cost-sharing payments go to insurance companies to pay for reimbursements for low-income customers’ out-of-pocket costs.
Without the payments, insurers have said they would jack up premiums, which would further upend the already shaky economic underpinning the Affordable Care Act.
The move comes just hours after Mr. Trump signed an executive order pushing his administration to allow association health plans, which would allow individuals and small businesses to join up and purchase insurance on the group market across state lines.
The move is a boon for those struggling with high-cost plans, though analysts say it could sap those customers – and their high premiums – from existing markets, leaving the sick and elderly to pay more because their costs are no longer subsidized by the healthy.
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