Trump, Congress punt again on critical Obamacare subsidies

Winners and losers of the Republican health care bill
Winners and losers of the Republican health care bill

Health insurers are not going to like this.

The Trump administration and Congress are once again delaying their decision to fund Obamacare's cost-sharing subsidies, according to a motion filed in the U.S. Court of Appeals on Monday. The move gives them another three months to come to a resolution.

The payments reduce the deductibles and co-pays for more than half of enrollees on the Obamacare exchanges. They are expected to cost $7 billion this year.

These subsidies are crucial to Obamacare's survival, at least in the near term. If the subsidies stop, insurers will likely try to pull out of the Obamacare exchanges immediately.

Related: Obamacare: What's going right. What's going wrong

Insurers also want more guarantees about the subsidies' future before they commit to participating in the exchanges in 2018. Several carriers have already said they are pulling out of Obamacare next year, due in part to the uncertainty in Washington D.C. over the health reform law. Others are announcing big rate increases for next year and may raise them further if Congress cuts off the subsidies. They don't want to wait until the end of August to find out the fate of the subsidies.

"We need swift, immediate action and long-term certainty on this critical program," said Cathryn Donaldson, spokeswoman for America's Health Insurance Plans, a lobbying group. "It is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care."

AHIP, along with the U.S. Chamber of Commerce, the American Medical Association, the American Hospital Association, BlueCross BlueShield Association and others, wrote a letter to Senate leaders on Friday asking lawmakers to guarantee the subsidies will be funded through 2018.

The cost-sharing subsidies were at the center of a court battle between House Republicans and the Obama administration. Seeking to bring down Obamacare, the House filed suit against the administration in 2014, arguing the payments to insurers were illegal because Congress never appropriated the money.

A district court judge last year ruled in favor of the House, finding the subsidies were illegal and must stop. However, she stayed her decision and the Obama administration filed an appeal. The Trump administration inherited the case, but has not come to a resolution with House Republicans. Both parties already filed once for a three-month delay.

Last week, attorney generals from 15 states, plus the District of Columbia, filed a motion with the Court of Appeals to intervene in the case, arguing that the continued delay is hurting their insurance markets and their residents. They argue that they can no longer rely on the Trump administration to defend the health reform law.

Related: Aetna to Obamacare: We're outta' here

The subsidies continue to be paid during the appeal, but the Trump administration has given mixed messages about how much longer they will continue.

"Going forward, we are weighing our options and still evaluating the issues," said Alleigh Marre, spokeswoman for the Department of Health and Human Services. "Congress could resolve any uncertainty about the payments by passing the AHCA and reforming Obamacare's failed funding structure."

A spokeswoman for House Speaker Paul Ryan did not return a request for comment.

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