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Trump Defends Cutting Obamacare Subsidies as Stinging Insurers

Senate Minority Leader Chuck Schumer (D-N.Y.) arrives at a Capitol press conference on Sept. 27, 2017. (Ron Sachs/picture-alliance/dpa/AP Images)

WASHINGTON — President Trump today defended his decision to cut off cost-sharing reduction payments to insurance companies under Obamacare as something “that’s going to be good for everybody,” while Sen. Elizabeth Warren (D-Mass.) charged in a tweet that “cutting off payments that help low-income families afford health insurance is petty, cruel, & just plain dumb.”

The White House announced late Thursday night that the Department of Health and Human Services concluded “there is no appropriation” for the subsidies, and “in light of this analysis, the government cannot lawfully make the cost-sharing reduction payments.”

“The United States House of Representatives sued the previous administration in federal court for making these payments without such an appropriation, and the court agreed that the payments were not lawful,” press secretary Sarah Huckabee Sanders added in a statement. “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system. Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

Senate Majority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) fired back in a joint statement that the move was “a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” and said Trump “will singlehandedly hike Americans’ health premiums.”

“Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it,” they added.

Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.) had recommended over the summer a temporary CSR extension as he and Ranking Member Patty Murray (D-Wash.) work together on Obamacare fixes.

“These payments help to reduce the cost of premiums and co-payments for the roughly 4 percent of insured Americans who get their insurance through the exchanges on the individual market,” Alexander said in June. “These payments help to avoid the real possibility that millions of Americans will literally have zero options for insurance in the individual market in 2018.”

Speaking to reporters on the South Lawn of the White House this afternoon, Trump called the CSR money “a subsidy for insurance companies.”

“Take a look at their stocks. Look where they are. They’re going through the roof. From past, I don’t know about today, but the insurance companies have made a fortune. That money was a subsidy and almost you could say a payoff to insurance companies,” he said. “And what we have to do is come up with great healthcare.”

“…What would be nice if the Democratic leaders could come over to the White House, we’ll negotiate some deal that’s good for everybody. That’s what I’d like. But they’re always a bloc vote against everything. They’re like obstructionists. If they came over, maybe we could make a deal.”

On a conference call today, Schumer said CSRs have reduced prescription drug deductibles by as much as $3,354, and annual out-of-pocket maximums by up to $5,587.

“But these payments aren’t just limited to lower-income Americans. Ending these payments will sabotage the broader individual market, jeopardizing coverage for millions of Americans in the middle class, as well as those struggling to get there,” he said. “According to the CBO, the Congressional Budget Office, cutting off these payments will cause premiums to shoot up by a whopping 20 to 25 percent. So the president, by this action, is raising premiums by 20 to 25 percent.”

Schumer vowed that “we Democrats are going to work very hard to get these cost-sharing payments restored — but remember, there are a whole lot of Republicans who want to get them restored, too.”

“And so I think we’re going to have a very good opportunity in the omnibus to get this done in a bipartisan way, if we can’t get it done sooner,” he added. “…As in the past, threats and bullying is not going to work. In this, politically, he’s in much worse shape than we are. The American people, even a large number of Republicans, are on our side in terms of improving the system, not destroying it. And so I don’t think he has much leverage to threaten or bully.”