President Trump announced a decision to halt subsidy payments to the insurance companies in Obamacare exchanges.
Many of the media response centered on the damage that decision did to President Obama’s signature legislative achievement.
“[Trump] dropped the ax with timing that could inflict maximal disruption on the Affordable Care Act enrollment season,” the Washington Post wrote.
The decision constituted a “failure to lead,” and a “spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” Senate Minority Leader Chuck Schumer of New York was quoted as saying. “This is not how the architects of the Affordable Care Act had intended the program to work,” the Huffington Post reported.
But what the Washington Post did not mention and the Washington Times sidestepped is this: The subsidies are illegal.
“The Trump administration announced late Thursday that it has concluded it can no longer legally make critical Obamacare “cost sharing” payments and will cut them off,” Washington Times reporter Stephen Dinan wrote.
The government paid insurance companies to help them absorb the losses from the Obamacare exchanges’ sickest, most unprofitable customers. Congress wrote a provision allowing for this into the original Obamacare law, but it left it up to the annual appropriations process to actually get the money approved.
Congress never appropriated the money, but the Obama administration continued the payments, which amounted to about $7 billion this year, claiming it clearly was Congress’ intent the payments be made. Members of the U.S. House of Representatives, led by then-speaker John Boehner, R.-Ohio, sued the administration for spending money without congressional approval.
A Republican-appointed federal judge in Washington, D.C., ruled in favor of the members of Congress but allowed the payments to continue until the case could be heard in the U.S. Court of Appeals. In recent days, U.S. Attorney General Jeff Sessions issued a ruling the plaintiffs in the case likely would prevail, so the administration should eliminate the payments. Trump formalized that with his announcement last Thursday.
Mainstream media was not buying it. It will roil markets, they said. It will increase premiums, chase companies out of the market and perhaps create shortages.
The stories also noted that insurers and relevant government agencies had factored the subsidies into their rate plans for the coming year. Congress, which also knew the court case against the payments likely would prevail, had begun bipartisan efforts to address the issue as well. And, as was noted in the Huffington Post, “The Affordable Care Act has been a fragile program from the beginning.”
None took into account the positive impact of the other reforms Trump announced. Experts said that the plan to allow more association plans, in which organizations, such as churches and non-profits, can band together to purchase group insurance, could save consumers money by eliminating the bells and whistles the Obama administration insisted the plans carry.
He also ordered changes to regulations governing short-term policies to lengthen the time they could be in effect from three months to a year and ordered regulations to be reformed so that these and the association plans can be sold across state lines – a change that could create larger risk pools, lower premiums and strengthen the industry considerably.
Trump got little public praise for what could be the most beneficial and momentous week in the history of U.S. health insurance policy. Practicality was restored with the announcement about the associated health plans, temporary health plans and, potentially most exciting, the ability to sell those plans across state lines.
And law and order were re-established on Capitol Hill.
“Under our Constitution, the power of the purse belongs to Congress, not the executive branch,” House Speaker Paul Ryan said. “Today’s decision by the Trump administration to tend the appeal of that ruling preserves a monumental affirmation of Congress’ authority and the separation of powers.”