Trump threatens to halt Obamacare insurance subsidies

Sen. Lindsey Graham is pushing an alternative proposal to convert federal healthcare spending to state block grants.
By Eric DuVall  |  July 29, 2017 at 3:21 PM
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July 29 (UPI) -- President Donald Trump on Saturday tweeted a threat to stop subsidies to health insurance companies after the Republican effort to repeal and replace the Affordable Care Act collapsed this week.

Trump's threat, which he has made before, is to halt billions in subsidies paid to insurance companies in order to keep health plans sold on government-run exchanges affordable for individuals required to buy them. The insurance industry has said stopping the payments would cause premiums to increase immediately and many insurance companies have said they would withdraw from the exchanges altogether, hastening an existing problem in some states where only a handful of plans are for sale.

As part of budget negotiations earlier this year, Trump pledged to continue the payments through July, but has not made a commitment beyond the end of the month.

"If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!" Trump tweeted.

The subsidies have been a lightning rod for GOP criticism of Obamacare because they were never specifically authorized by Congress, which, under the Constitution, must appropriate all federal funds. House Republicans filed a lawsuit against the Obama White House to halt the payments, saying they were illegal, but the case is still winding its way through federal courts.

Though the Senate's failure to pass a slimmed-down repeal of the ACA went down to a one-vote defeat in Friday's wee hours, a small group of GOP lawmakers are attempting to revive the debate, apparently with Trump's blessing.

Sen. Lindsey Graham, R-S.C., has authored a bill that would keep much of the tax and regulations enshrined under the ACA in tact, but would convert federal healthcare spending to block grants that would be given to states to spend on their own. The result would be a far lighter federal footprint in healthcare policy, but states that opted to accept expanded Medicaid payments would maintain their current level of funding. Deep cuts to Medicaid were a major stumbling block for moderate senators and those representing states already getting the money. The Congressional Budget Office analysis of various GOP efforts to repeal the ACA found that cutting Medicaid would result in more than 20 million Americans losing healthcare coverage over the coming decade.

Politico reported Graham and Republican Sens. Dean Heller of Nevada and Bill Cassidy of Louisiana met with Trump at the White House on Friday night to discuss the legislation and received the president's encouragement to pursue it.

"I had a great meeting with the president and know he remains fully committed to repealing and replacing Obamacare," Graham said after the meeting. "President Trump was optimistic about the Graham-Cassidy-Heller proposal. I will continue to work with President Trump and his team to move the idea forward."

Doing so, however, would mean returning to the start of the same legislative road that led to a dead end this week. It would require Senate Majority Leader Mitch McConnell to call for another vote to open debate on healthcare, one that only passed with a 51-50 majority when Vice President Mike Pence broke a 50-50 tie. Sens. Susan Collins, R-Maine, and Lisa Murkowski, R-Alaska, would have to flip their votes from the first motion to begin debate because the Republican caucus is expected to lose a member, Sen. John McCain, who is returning to Arizona to begin treatment for brain cancer. He is not expected to return to the capital until after the Senate's August recess.

Even if McConnell were able to restart the healthcare debate for Graham's bill, there's no guarantee it would muster 51 votes. Every other GOP proposal thus far has failed to cross the finish line in the Senate.

Additionally, it's unclear how the most conservative members of the House would greet the proposal. The House Freedom Caucus rejected legislation that did not gut Obamacare regulations and taxes, or at least allow states to opt out of them -- neither of which are presently included in Graham's bill.

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