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July 31, 2017

In tweetstorm, Trump threatens end to 'bailouts' for insurers, lawmakers

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President Trump in a series of tweets Saturday called on Republican lawmakers not to give up on efforts to repeal and replace the Affordable Care Act (ACA), warning that "bailouts" for insurers and members of Congress could end "if a new health care bill is not approved quickly."

Why investing in consumer loyalty is a no-regrets strategy

Trump's tweets follow Senate Majority Leader Mitch McConnell's (R-Ky.) statement that Senate lawmakers should "move on" after the Senate early Friday morning voted 49-51 to reject Republicans' third health reform plan.  White House adviser Kellyanne Conway on "Fox News Sunday" said, "The president will not accept those who said it's, quote, 'time to move on.'"

Trump attacks Senate rules

Trump's tweets began with several calls for McConnell to bypass the Senate's legislative filibuster rules. Doing so would allow ordinary legislation to pass on a simple majority vote.

He wrote, "The very outdated filibuster rule must go. Budget reconciliation is killing R's in Senate. Mitch M, go to 51 Votes NOW and WIN. IT'S TIME!" He added that Republicans "look like fools and are just wasting time."

McConnell has said he opposes removing the filibuster rule for legislation, and as the Washington Post's "The Fix" reports, those rules had little to do with the failed health reform bills, which were being considered under special Senate reconciliation rules that allow budget-related legislation to pass by a simple majority.

Trump threatens insurer, congressional subsidies

Trump later appeared to threaten to stop paying the ACA's cost-sharing reduction (CSR) payments to insurers, as well as to change Office of Management and Budget rules that currently allow lawmakers and congressional staffers to maintain their employer contribution while enrolling in coverage through Washington, D.C.'s small business exchange. According to Politico, Trump has the authority to alter lawmakers' health care benefits.

Trump wrote, "If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!"

In an appearance Sunday on CNN's "State of the Union," White House budget director Mick Mulvaney sought to clarify Trump's tweets. Mulvaney explained, "What he's saying is, look, if Obamacare is hurting the American people—and it is—then why shouldn't it hurt insurance companies and more importantly, perhaps for this discussion, members of Congress?"

The Trump administration has been making cost-sharing reduction payments called for by the ACA to insurers on a monthly basis, but has not given any indication on whether the administration will make future payments.

Conway on "Fox News Sunday" said Trump would decide this week whether to continue making the payments. The payments, totaling about $7 billion annually, reimburse insurers for lowering out-of-pocket costs—such as deductibles and copayments—for certain low-income enrollees. The payments are currently being challenged by the House in court. Politico's "Pulse" reports that senior administration officials are expected to discuss the issue with Trump Tuesday.

If Trump discontinues the payments, insurers would still be required to give the out-of-pocket cost discounts under the ACA, but the federal government wouldn't be able to compensate insurers without an explicit appropriation from Congress.

Some insurers have said they would scale back or withdraw from the exchanges without greater certainty that CSR payments will continue, and others have said the uncertainty would result in larger premium rate increases. According to "Pulse," some insurers also have signaled they would file lawsuits if the payments are not made.

According to the Wall Street Journal, the next set of payments is due in three weeks, and insurers face a mid-August deadline to file premium rates for the 2018 coverage year. Insurers must make final decisions about whether or not to participate in the exchanges by late September.

White House officials say health reform debate is not over yet

Both Conway and Mulvaney suggested Trump is hoping senators can come up with a new, passable health reform plan.

Mulvaney on CNN's "State of the Union," said, "In the White House's view, they can't move on in the Senate," adding, "They need to stay, they need to work, they need to pass something."

However, Reuters reports that House lawmakers have already left for their August recess and the Senate is expected to adjourn by mid-August. Further, Sen. John McCain (R-Ariz.), one of three GOP senators who voted no Friday, has returned home to begin cancer treatment and in a statement said he would not return to Congress until after the August recess, meaning senators would have one less vote that could potentially help pass a new bill (Haberman, New York Times, 7/29; Diamond, "Pulse," Politico, 7/31; Yen, AP/Sacramento Bee, 7/30; Wilde Mathews, Wall Street Journal, 7/28; Radnofsky, Wall Street Journal, 7/29; Selk, "The Fix," Washington Post, 7/29; Demko, Politico, 7/30; Cornwell, Reuters, 7/30; Thomsen, The Hill, 7/30; Everett et al., Politico, 7/29).

Why investing in consumer loyalty is a no-regrets strategy

Join us on Friday, August 4 at 1 p.m. ET to learn how to generate consumer loyalty and why investing in loyalty is a no-regrets strategy regardless of business model—and no matter what happens with the ACA.

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