Last week, the Trump administration began dismantling the Obama administration's Affordable Care Act by exempting employers from the federal requirement to provide insurance coverage for contraception, from birth control pills to abortion drugs and devices, in their health insurance plans if it conflicts with their sincerely held religious or moral beliefs.
"These payments are not a bailout - they are passed from the federal government through health plans to medical providers to help lower costs for patients who see a doctor to treat their cancer or fill a prescription for a life-saving medication", they said.
The Obama administration maintained it did not need to seek congressional approval for the payments, and since 2014 made CSR payments to lower deductibles for millions of low-income consumers. So if the government doesn't reimburse the insurers, they'll make up the money by charging higher premiums for coverage.
Those types of plans wouldn't be subject to "costly Obamacare mandates and rules" according to Trump. So when premiums rise, the subsidies rise in tandem. The House of Representatives in May passed Republican legislation to gut Obamacare.
But those who get no subsidies are exposed to the full brunt of cost increases that could reach well into the double digits in many states next year.
Ending the payments, which cost about $7billion total this year, was one of Trump's campaign promises before he was elected in 2016.
Some insurers are likely to sue the administration over the failure to make payments, believing they are entitled to them under the Affordable Care Act, which, much to Trump's chagrin, is still law of the land. A judge agreed but allowed the administration to continue making the payments during an appeal.
The most immediate threat to the stability of ACA marketplaces could come from these short-term health plans, since many large national insurers already offer these plans, analysts told the Times. He repeated that characterization on Twitter Friday.
"The government can not lawfully make the cost-sharing reduction payments", the White House said in a statement. "Costs will go up and choices will be restricted", the Blue Cross Blue Shield Association and America's Health Insurance Plans said in a joint statement.
The order allows for a broader interpretation of the Employee Retirement Income Security Act (ERISA), which could, according to a White House statement, "potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees", in addition to expanding coverage through short-term and low-priced limited duration insurance (STLDI). Under the president's directive, these plans wouldn't abide by the Affordable Care Act's consumer protections and benefits rules, something that has caused concern among many policy experts.
The two moves Thursday could split the health care market.
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