Trump Administration to Continue PPACA Subsidies to Insurance Companies––for Now

Successful GOP lawsuit, now under appeal, claims payments are illegal

The Trump administration says that it is willing to continue paying subsidies to health insurance companies under the Patient Protection and Affordable Care Act (PPACA), according to an article in The New York Times. The decision flies in the face of House Republicans, who say the payments are unconstitutional because Congress never authorized them.

The future of the payments has been in doubt because of a lawsuit filed in 2014 by GOP House members, who argued that the Obama administration was paying the subsidies illegally. Without these cash infusions, the PPACA’s insurance markets could quickly collapse, the article says.

A federal District Court judge agreed with the Republicans’ argument and ordered a halt to the payments, but she suspended her order to allow the government to appeal.

The Trump administration has not indicated its position on the pending appeal. Asked to clarify, the Department of Health and Human Services told the Times: “The precedent is that while the lawsuit is being litigated, the cost-sharing subsidies will be funded. It would be fair for you to report that there has been no policy change in the current administration.”

The PPACA requires insurers to reduce deductibles and other out-of-pocket costs for certain low-income consumers. The so-called “cost-sharing subsidies,” which cost the government $7 billion a year, compensate insurers for these discounts.

Because of the uncertainty about the future of the PPACA, insurers say they will demand higher premiums to compensate for the risk if they stay in the market next year, the Times reports.

Source: The New York Times; April 10, 2017.