Trump Administration Cancels Illegal Obamacare Insurer Subsidies

Washington — Following a “thorough legal review,” the Trump administration announced last night that it “believe[s] that the last Administration overstepped the legal boundaries” by distributing Cost Sharing Reduction (CSR) payments to insurance companies without a congressional appropriation. As a result, the Trump administration “will discontinue these payments immediately.” Heritage Action released the following statement from chief executive officer Michael A. Needham:

“The Trump administration deserves tremendous credit for understanding those payments are unlawful and for halting them immediately. While some lawmakers will use this as an excuse to pursue ‘bipartisan market stabilization’ measures, Obamacare is a fundamentally flawed law that cannot be saved, repaired or bailed out. The president and his administration understand this and are eager for serious congressional action. In the interim, the administration should also overturn OPM’s 2013-era guidance that authorized illegal Obamacare subsidies for lawmakers and congressional staff to continue pressuring lawmakers to repeal Obamacare.”

The Heritage Foundation’s senior research fellow in health care policy Ed Haislmaier added:

“Congressional action to continue these subsidies will not help stabilize the broader individual-market, which is suffering under Obamacare’s burdensome regulatory regime. To be clear, the CSRs prop up the subsidized Obamacare exchange market, but would do absolutely nothing to stabilize the broader, unsubsidized individual market. What is instead needed to stabilize the unsubsidized market is the removal of Obamacare’s cost increasing insurance mandates and misguided regulations.”

Heritage Action: Republicans Should Prohibit Obamacare’s Congressional Exemption (July 2017)
Heritage: Here Are 7 Implications of Ending Obamacare’s Cost Sharing Reduction Payments (August 2017)
Heritage Action: No Mandate to Bail Out Obamacare (August 2017)