Whatever the fate of the Republican bid to repeal and replace Obamacare, the most immediate threat to the law is President Donald Trump’s ability to cut off key payments to insurance plans that reduce health care costs for millions of Americans.
The White House amplified that threat Tuesday night, according to congressional Democratic aides.
The administration is disputing that — sort of. But White House officials will not actually give any assurances that the payments will continue to be made. That remains the fundamental issue, and we don’t yet have any firm answer from the administration on what’s likely to come of it.
Without the federal payments, health plans would either have to hike their premiums to make up for lost revenue — or, as many experts think is more likely, drop out of the law’s marketplaces entirely.
So cutting off the payments is an existential threat to Obamacare, and Trump can threaten to do so because of an ongoing House Republican lawsuit that challenged the payments during the Obama administration.
A dizzying back-and-forth between House Minority Leader Nancy Pelosi and the White House on Wednesday morning underscored how fraught this issue is — and it didn’t provide any clarity about what would ultimately happen to the payments.
Democrats accused the White House of threatening to stop the payments
Pelosi spoke by phone on Tuesday night with Mick Mulvaney, director of the White House Office of Management and Budget, an aide familiar with the conversation told me. Mulvaney said that the White House had not yet decided whether to make these payments, known as cost-sharing reductions or CSRs, next month.
He also said, according to the aide, that unless Congress acted to approve the payments, the Trump administration would ultimately stop making them.
An OMB spokesperson directly disputed part of this account, saying the reports that Mulvaney said the administration would stop making payments without congressional action were false.
But the OMB official also suggested that the payments would not be included in the government spending bill that Congress must pass at the end of April to prevent a government shutdown — and provided no assurances that they would be made in the future.
If the payments aren’t approved by Congress, they are in Trump’s hands
The whole issue is at a head because some Democrats said they wanted the payments to be funded as part of the government spending bill. Getting funding approved by Congress would remove the threat of Trump deciding to cut off the payments unilaterally.
“This administration has made CSR payments in the past,” Mulvaney said in a statement, “and the only reason some are raising this now is to hold the government hostage and find an excuse to oppose a bipartisan agreement."
However, the OMB official refused to tell me whether the payments would continue to be made.
“The eleventh hour is not the time nor the place for that discussion,” the official said.
House Speaker Paul Ryan also said Wednesday that the Obamacare payments would not be included in the government spending bill.
“That is not in an appropriations bill,” Ryan said during his weekly press conference. “That’s something separate that the administration does.”
CSRs are essential to Obamacare. Trump has taken them hostage.
The cost-sharing reductions are essential to Obamacare. Health plans are required under the law to decrease the costs that lower-income people have to pay out of their pocket for their health care. In return, the federal government is supposed to pay money to the plans to offset the costs of doing so.
About 7 million Americans saw their health care costs lowered by the cost-sharing reductions in 2016, and the federal government paid $7 billion to health plans for bringing down those out-of-pocket costs.
House Republicans sued the Obama administration over the CSR payments in 2014, alleging that they needed congressional approval to make them. They initially prevailed in court, but that ruling was appealed by the Obama administration and the payments were to continue while the lawsuit was ongoing.
But now it’s up to the Trump administration to continue the Obama administration’s defense of the payments. The president thinks this gives him leverage, though public polling suggests that the American people would blame Republicans if something goes wrong with the law.
Trump started making veiled threats this month that he might stop the payments unless Democrats work with him on health care or agree to fund his long-promised Mexican border wall. But Democrats haven’t budged yet.