The Trump administration will continue to fund critical Obamacare payments for the month of August despite the president’s repeated threat to yank them.
The White House confirmed on Wednesday that the cost sharing reduction (CSR) payments would continue to go to insurers to help offset the cost of providing poorer Americans with lower out-of-pocket costs.
The payments became the subject of a lawsuit between the Obama administration and the Republican-controlled House in 2015. The House argued the way the CSRs were paid through the executive branch was illegal, and a judge ruled in their favour in 2016.
The Obama administration appealed the ruling, allowing the payments to continue.
Trump has dangled the possibility of cutting off CSRs in numerous tweets, calling them “bailouts” for insurers and threatening to let Obamacare “collapse.”
The Congressional Budget Office released a report on Tuesday that projected gross premiums would increase for people in the Obamacare exchanges by 20% more than its baseline projection in 2018 if the CSRs are cut off. While this would be offset by subsides for most consumers in the marketplaces, there is a possibility premiums for some would rise.
The larger impact, according to the CBO, is that the federal deficit would balloon by $US194 billion by 2026 compared to the baseline projection due to increased subsidy payments.
A substantial number of insurers offering plans in the exchanges around the country warned that they would increase their premiums for 2018 if the payments are stopped, but what that would mean for consumers is unclear.
The White House has said the CSR payments will be paid on a month-by-month basis going foward.
The Senate Health, Education, Labour, and Pensions committee plans to consider a bipartisan bill when it returns after the August recess that would, in part, fund the CSRs for two years.