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April 13, 2017

White House considers cost-sharing payments as health reform bargaining tool, officials say

Daily Briefing

President Trump on Wednesday said he has yet to make a decision on whether to continue insurer cost-sharing payments called for under the Affordable Care Act, but three administration officials say Trump is considering withholding the payments in an attempt to force Democrats to negotiate on health care.

HHS issues two statements on cost-sharing subsidies

Trump's comments come after the New York Times on Monday reported that HHS in a statement said the administration would continue paying the subsidies while a lawsuit challenging the payments continues. However, on Tuesday HHS issued a new statement challenging the Times' article, saying the administration still is "deciding its position on this matter."

Politico reports two administration officials familiar with the discussions said Trump prompted HHS to issue the second statement over concerns that the first could weaken his negotiating position. HHS declined to comment on the statements.

But, according to Politico, one senior official said, "POTUS wants to use [the subsidies] as leverage." The official added, "When Obamacare fails on its own, the Dems will want to come to the table."

According to Modern Healthcare, the administration has until next month to decide on whether to continue to pursue the lawsuit itself, but in the interim, insurers and health care organizations have urged the administration to explain how it will approach the payments, which they say are essential to the ACA exchange's success. Insurers must decide within the next two months whether to offer individual plans for 2018 and their premium costs.

Trump's comments on cost-sharing subsidies

Trump addressed the controversy in an interview with the Wall Street Journal Wednesday, arguing the payments were not "authorized by Congress," adding, "I'm going to have to make a decision."

Trump said that without the cost-sharing payments the ACA will essentially be dead next month, and according to The Hill, he said the potential fallout is "part of the reason that I may go the other way" and allow the payments to continue. He said, "The longer I'm behind this desk and you have Obamacare, the more I would own it."

However, Trump indicated he was still weighing his decision. "I haven't made my viewpoint clear yet. I don't want people to get hurt. ...What I think should happen and will happen is the Democrats will start calling me and negotiating," he said.

He added that Senate Democratic leader Chuck Schumer "should be calling me and begging me to help him save Obamacare, along with [Rep.] Nancy Pelosi [D-Calif.]."

In response, Schumer said that Democrats' "position remains unchanged: drop repeal, stop undermining our health care system, and we will certainly sit down and talk about ways to improve the Affordable Care Act." He said that Trump's comments indicated the president was "threatening to hold hostage health care for millions of Americans … to achieve a political goal of repeal that would take health care away from millions more," adding, "This cynical strategy will fail."

Businesses urge Trump admin to continue payments

Several health care organizations and the U.S. Chamber of Commerce on Wednesday sent a letter to Trump calling on the administration to continue the cost-sharing payments to insurers, Modern Healthcare reports.

The signatories included:

  • America's Health Insurance Plans;
  • the American Academy of Family Physicians;
  • the American Benefits Council;
  • the American Hospital Association;
  • the American Medical Association;
  • the Blue Cross Blue Shield Association; and
  • the Federation of American Hospitals.

In the letter, the groups warned that if the cost-sharing reductions do not continue health plans could pull out of the market in 2018, potentially leaving consumers in certain areas with few choices for coverage.

They wrote, "The most critical action to help stabilize the individual market for 2017 and 2018 is to remove uncertainty about continued funding for cost sharing reductions" (Bender et al., Wall Street Journal, 4/12; Diamond/Dawsey, Politico, 4/12; Sullivan, The Hill, 4/12; Meyer, Modern Healthcare, 4/12; Abutaleb, Reuters, 4/12; Sullivan, The Hill, 4/12).

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