Yesterday, President Donald Trump signed an executive order halting cost-sharing reduction payments intended to help low-income Americans get healthcare. The subsidies were a major component of the Affordable Care Act, and the order is an obvious move by the President to undermine the nation's health insurance law, following the Republican-controlled Congress's repeated failures to repeal "Obamacare." Hundreds of thousands of New Yorkers—not to mention millions of Americans—rely on these subsidies, and now, New York Attorney General Eric Schneiderman is suing the Trump administration in an effort to block the White House from spiking them.
The federal government currently pays about $7 billion to insurers so they can offer lower-cost plans, and help poor Americans with out-of-pocket costs. But Congress has never funded the subsidies, and yesterday the White House called them "unlawful," claiming the government could not pay for them.
"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," the White House said in a statement. "Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people."
Trump also signed executive orders that will change parts of the ACA, permitting small businesses and individuals to purchase cheaper plans with less coverage, and gutting some consumer protections. Critics of Trump's executive order warn the cheaper-plans-with-less-coverage option will inevitably drive up insurance costs for Americans with serious medical conditions, and cause more insurers to abandon the ACA marketplaces.
Schneiderman's office addressed the move in a statement yesterday. "Having failed to persuade a Republican Congress to repeal the Affordable Care Act (ACA), President Trump now appears to be trying to accomplish by executive fiat what he could not through Congress — treating New Yorkers as political pawns in his effort to sabotage the health care market," he said, vowing to fight "any action that violates the law" or steps on New Yorker's constitutional rights.
He will now sue to defend the subsidies, per a statement released last night:
Hundreds of thousands of New York families rely on the Affordable Care Act’s subsidies for their health care - and again and again, President Trump has threatened to cut off these subsidies to undermine our healthcare system and force Congress to the negotiating table. That's unacceptable.
I will not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost.
This summer, the courts granted our intervention to defend these vital subsidies and the quality, affordable health care they ensure for millions of families across the country. Our coalition of states stands ready to sue if President Trump cuts them off.
Trump's executive orders are expected to increase insurance premiums and potentially cost the government an extra $2.3 billion next year, according to NPR.
Leading Democrats in Congress excoriated the president's executive orders.
"Sadly, instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans' health premiums," House Minority Leader Nancy Pelosi, and Senate Minority Leader Senator Chuck Schumer said in a joint statement. "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."
Earlier this month, Trump undermined the ACA by rolling back rules mandating employers include birth control coverage in their health insurance plans. The rollback makes it easier for employers to object for moral or religious reasons, a move that could cost hundreds of thousands of women access to no copay birth control.
