Trump celebrates healthcare stocks tanking after executive order ending key Obamacare subsidies

  • Trump announced Thursday an end to Obamacare’s payments to insurance companies, which helped lower insurance costs for poor Americans.
  • Many healthcare industry stocks took a dive in trading Friday.
  • Trump celebrated the plunge in a tweet Saturday morning.

President Donald Trump celebrated his most recent executive order on Twitter Saturday morning, saying that he is “very proud” of his decision to end the Affordable Care Act’s cost-sharing-reduction payments, a move that could wreck the ACA’s individual insurance exchanges and send healthcare costs soaring for many Americans.

Trump, who announced ending the payments Thursday night, celebrated that stocks related to the healthcare industry took a sharp dive on Friday after the news.

“Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!” Trump tweeted early Saturday morning.

UnitedHealth and Cigna tanked early Friday morning, but had mostly recovered by the close of trading. Anthem and Humana, meanwhile, fell 3.11% and 1.54% by the end of Friday. Centene and Molina Healthcare, which both have significant Medicaid business and offer some individual insurance plans, dropped 3.33% and 3.37% respectively.

Trump further said on Twitter that he is “very proud” of his executive order, adding that it would “allow greatly expanded access and far lower costs for HealthCare.”

The payments ended by Trump’s executive order were introduced by the ACA, the law better known as Obamacare, to help offset the cost to insurers of offering affordable plans to poor Americans. Insurers have repeatedly warned that if the payments were cut off, they would be forced to raise premiums to make up the financial loss.

After multiple failures by Republicans to pass legislation to overhaul the US healthcare system, Trump has pursued measures to undermine the stability of the ACA, the landmark healthcare law also known as Obamacare.

Announcing the executive order Thursday, the White House said it could not “lawfully” make the payments because “there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare.”

The CSR payments have long been disputed. The Republican-controlled House of Representatives sued the Obama administration in 2014, arguing the payments were illegal since they were being appropriated by the executive branch instead of Congress, which never authorised them.

A federal court ruled in favour of the House, but the Obama administration appealed the ruling, allowing the payments to continue. The Trump administration has kicked the can down the road on the appeal and appropriated the payments on a monthly basis, attempting to use them as leverage in multiple negotiations with Democrats.

In August, a federal judge ruled that 17 states and the District of Columbia could continue the lawsuit even if the Trump administration pulled out of the appeal since the end of the payments would directly affect residents. This could allow the payments to continue despite the announced decision to end them.

Democrats have repeatedly sought to appropriate the payments through congressional action, most recently in bipartisan talks between Republican Sen. Lamar Alexander, the chairman of the Senate Committee on Health, Education, Labour, and Pensions, and the ranking member of that committee, Democratic Sen. Patty Murray.

House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer decried Trump’s actions in a statement released minutes after the decision was announced.

“Sadly, instead of working to lower health costs for Americans, it seems President Trump will single-handedly hike Americans’ health premiums,” they said. “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America. 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.”

Many Republicans have resisted the idea of Congress appropriating the payments, but some moderate GOP members think it is necessary to maintain stability in the insurance exchanges.

“Cutting health care subsidies will mean more uninsured in my district,” Republican Rep. Ileana Ros-Lehtinen tweeted, adding that the president “promised more access, affordable coverage,” but that this would do the opposite.

House Speaker Paul Ryan applauded the decision on procedural grounds, saying the method of appropriating the payments through the executive branch was illegal.

“Today’s decision by the Trump administration to end the appeal of that ruling preserves a monumental affirmation of Congress’s authority and the separation of powers,” Paul said in a statement. “Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with Trump administration to provide the American people a better system.”

How much ending the payments could destabilize the exchanges is a subject of debate. Some health-policy experts have said that without the payments, the individual insurance exchanges could be devastated as insurers leave and premiums skyrocket. The nonpartisan Congressional Budget Office, however, has found that while the move would cause some pain in the short term for the exchanges, they would eventually find their footing.

Earlier Thursday, Trump signed an executive order to allow two types of healthcare plans that would let people skirt some Obamacare regulations — a move he said was designed to undermine the healthcare law. Experts have said that the introduction of these plans could increase costs for sicker Americans.

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