The Trump administration has decided to cut off crucial Obamacare subsidies that help reduce health care costs for lower-income Americans, a serious attack on the stability of the health care law’s insurance markets.
President Trump has been threatening to end the payments — know as cost-sharing reduction subsidies or CSRs — for months, but is finally following through after Republicans in Congress once again failed to repeal and replace Obamacare late last month.
The White House announced late Thursday that the administration would stop the payments. The move comes as the Trump administration is also cutting funding for Obamacare outreach and pursuing new regulations to blow holes in the law, changes that collectively threaten a program through which millions of Americans purchase insurance.
The cost-sharing payments, which were created as part of the health care law but were then the subject of a lawsuit from House Republicans, help compensate health insurers for lowering the copays and deductibles that their lower-income customers must pay.
A federal judge has found the payments to be illegal without any further congressional action. Both Republicans and Democrats in Congress have expressed an openness to funding the subsidies, which would remove Trump’s ability to nix them, but no action has yet been taken.
Some health insurers had already increased their premiums for Obamacare plans in 2018 by as much as 20 percent because of Trump’s threats to cut off the payments. A permanent end to the subsidies could imperil the law’s marketplaces in the long term and lead to even bigger price hikes in future years.
Health plans could potentially sue the Trump administration to force the payments to be made, as they have on earlier occasions when Republicans sought to cut off federal funding provided under Obamacare. States have also taken steps to prepare for the possibility Trump would pull the payments, and most 2018 rates have already been…