Trump Administration Asks for Delay on PPACA Subsidy Decision

President leans toward dumping insurer subsidies

President Donald Trump’s administration has asked a U.S. Court of Appeals for another 90 days to resolve a lawsuit brought against the Obama administration by Republicans with regard to the so-called cost-sharing reduction payments mandated by the Patient Protection and Affordable Care Act (PPACA).

The U.S. Department of Justice and House Republicans made the joint request as they “continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action,” such as the GOP’s PPACA replacement plan, known as the American Health Care Act, according to a Bloomberg report.

Currently, the government reimburses insurance companies for offering cost-sharing reduction payments to help lower-income people afford certain health expenses. House Republicans brought a lawsuit against the Obama administration, arguing that it improperly funded the subsidies without a specific appropriation from Congress. The administration argued that there was a permanent appropriation in the PPACA for the payments, but a district judge ruled otherwise last year.

The Obama administration appealed, and the payments continued while the appeal was ongoing. But since taking office, President Trump and other administration officials have suggested that they would not continue the payments, rattling health care insurers who have been pressing lawmakers and the administration for the crucial funding, according to an earlier report posted on the Morning Consult website.

Without the payments, insurers have threatened to drop out of the PPACA’s markets or substantially raise premiums.

The Trump administration could still choose to drop the appeal, although other parties––including state officials, the health industry, and Democrats––are trying to defend the payments, the Bloomberg article states.

Health insurers are in the midst of deciding whether to participate in the PPACA next year, and what to charge customers. Some have already said that they will raise premiums in 2018 because of the uncertainty around the insurer subsidies. The funds, paid directly to insurers each month, have totaled approximately $7.35 billion this year. If the payments are cut off, some insurers might end their insurance plans immediately, Bloomberg suggests.

Sources: Bloomberg; May 22, 2017; and Morning Consult; May 22, 2017.