The Trump administration punted Monday on a long-awaited decision about the legality of critical Obamacare payments, asking a federal appeals court for more time to sort out competing demands, and leaving the insurance markets scrambling to figure out what to do next year.
Attorneys for the Justice Department and House of Representatives requested 90 more days to figure out how to unwind a long-running court battle over the payments, known as “cost-sharing reductions,” that pay insurers who lose money on low-income customers under Obamacare.
Lawyers for the administration said they need more time to figure out a permanent solution, which they hope will involve Congress passing a repeal of Obamacare.
In the meantime, however, more insurers could withdraw from the Obamacare exchanges, frightened that they will lose money without the taxpayer-funded payments, Democrats said.
“Unfortunately, by kicking the can down the road once again, the administration is continuing to sow uncertainty in the markets that will hurt millions of Americans,” Senate Minority Leader Charles E. Schumer said.
President Obama had been making the payments over the objections of Congress, which stripped the money out of the president’s budgets. The House GOP had sued and a federal district court sided with them, finding the payments to be unauthorized and illegal.
The Obama administration appealed, and the case is now sitting with a circuit court — but now with a Republican in the White House, leaving President Trump to figure out what to do with payments that reached $7 billion last year.
Without a final resolution, insurers say they’re going to request bigger rate increases from regulators because they don’t know if they’ll be reimbursed for their higher costs.
Estimates from the nonpartisan Kaiser Family Foundation said insurers would hike their premiums by 20 percent, on average, to compensate for any lack of cost-sharing subsidies.
The main insurers’ lobby, America’s Health Insurance plans, said Monday the group’s “position and unwavering focus on cost-sharing subsidies remains the same — we need swift, immediate action and long-term certainty on this critical program.”
Democrats say the solution is to have Congress authorize the payments. They tried to force the money into the 2017 spending bill earlier this month.
Mr. Trump and congressional Republican leaders resisted, saying that the administration will keep making the payments — for now — while they search for a longer-term answer.
Passing an Obamacare repeal bill, for instance, would allow Republicans to vote for an extension of the cost-sharing payments, while casting it as a transitional policy instead of a way to shore up Obamacare.
Recent polling suggests they’ll pay a political price if they fumble the handoff.
The Kaiser foundation recently found that three in five Americans, including a majority of Republicans, say that because Mr. Trump and congressional Republicans control the government, they will be responsible for any problems with Obamacare moving forward.
The president has said Democrats should come to the negotiating table to offer suggestions for replacing Obamacare.
By using the payments as leverage, however, Mr. Trump risks shifting the blame for shaky insurance markets from Democrats — whose program fell short of enrollment targets, sending rates skyward — to his own party.
“When combined with ACA repeal-and-replace discussions in Congress, issuers face significant uncertainty heading into 2018, which will likely impact pricing and participation decisions,” said Elizabeth Carpenter, senior vice president at Avalere Health, a D.C.-based consultancy.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
Please read our comment policy before commenting.