President Trump recently threatened to withhold Obamacare subsidies, a move that would tank Obamacare in many states and force Democrats to strike a deal on fixing health care.
In an interview in the Oval Office, President Trump signaled that he might consider withholding payments to insurers. Obama pushed for these payments to insurance companies to stabilize the Obamacare exchanges, although conservatives contend that the insurance handouts are unconstitutional. The absence of the health subsidies could cause the collapse of Obamacare, forcing lawmakers on both sides of the aisle to strike a deal.
The Obamacare subsidies reduce co-payments and deductibles for health insurers to lower the costs associated with low-income Obamacare recipients.
Trump reiterated his commitment to repealing Obamacare, saying, “I’m going to get health care done.”
Although Trump believes that repealing the Obamacare subsidies will force a deal between Republicans and Democrats, he remains concerned about creating turbulence in the market. Trump said, “Obamacare is dead next month if it doesn’t get that money.” He continued, “I haven’t made my viewpoint clear yet. I don’t want people to get hurt …What I think should happen and will happen is the Democrats will start calling me and negotiating.”
Conservatives argue that Obama lacked the authority to dole out billions of dollars of insurance subsidies, arguing that Congress never appropriated money for that purpose. Under former Speaker John Boehner, House Republicans sued the Obama administration to prevent it from doling out the subsidies.
In 2016 a federal judge ruled against the Obama administration but allowed the Obama White House to continue providing Obamacare subsidies while the administration appealed the decision. Republicans sought to delay the court case after Trump was elected president.
Trump said, “It wasn’t authorized by Congress; I’m going to have to make a decision.”
Speaker Paul Ryan (R-WI) said he would prefer the administration continue funding the payments.
Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader (D-CA) signaled that they would be unwilling to discuss a deal with President Trump that would undermine the efficacy of Obamacare. Schumer said that Trump was “threatening to hold hostage health care for millions of Americans…to achieve a political goal of repeal that would take health care away from millions more. This cynical strategy will fail.”
State insurance markets face increasing volatility. Humana announced in February that it will drop out of Obamacare exchanges in 2018. Aetna CEO Mark Bertolini declared that Obamacare is “in a death spiral,” and suggested they may withdraw from Obamacare exchanges entirely. Anthem announced that they might exit a large number of Obamacare exchanges next year.
After Ryancare failed to garner enough votes in the House, Trump tweeted that Democrats will come around to make a deal with him once Obamacare implodes.
The Democrats will make a deal with me on healthcare as soon as ObamaCare folds – not long. Do not worry, we are in very good shape!
— Donald J. Trump (@realDonaldTrump) March 28, 2017