U.S. states sue to block Trump Obamacare subsidies cut

[rooster59]

U.S. states sue to block Trump Obamacare subsidies cut

By Yasmeen Abutaleb and Dan Levine

 

U.S. Senator Rand Paul (R-KY) applauds as U.S. President Donald Trump signs an executive order to make it easier for Americans to buy bare-bones health insurance plans and circumvent Obamacare rules at the White House in Washington, U.S., October 12, 2017. REUTERS/Kevin Lamarque

 

WASHINGTON/SAN FRANCISCO (Reuters) - Eighteen U.S. states sued President Donald Trump's administration on Friday to stop him from scrapping a key component of Obamacare, subsidies to insurers that help millions of low-income people pay medical expenses, even as Trump invited Democratic leaders to negotiate a deal.

 

One day after his administration announced plans to end the payments next week, Trump said he would dismantle Obamacare "step by step."

 

His latest action raised concerns about chaos in insurance markets. The subsidies cost $7 billion this year and were estimated at $10 billion for 2018, according to congressional analysts.

 

"As far as the subsidies are concerned, I don't want to make the insurance companies rich," Trump told reporters at the White House. "They're making a fortune by getting that kind of money."

 

Trump's action took aim at a critical element of the 2010 law, his Democratic predecessor Barack Obama's signature domestic policy achievement.

Frustrated by the failure of his fellow Republicans who control both houses of Congress to repeal and replace Obamacare, Trump has taken several steps to chip away at it.

 

Democrats accused Trump of sabotaging the law.

 

Democratic attorneys general from the 18 states as well as Washington, D.C., filed a lawsuit in federal court in California later on Friday. The states include: California, Connecticut, Delaware, Kentucky, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington state.

 

The states will ask the court to force Trump to make the next payment. Legal experts said the states were likely to face an uphill battle in court.

 

"His effort to gut these subsidies with no warning or even a plan to contain the fallout is breathtakingly reckless," New York Attorney General Eric Schneiderman said. "This is an effort simply to blow up the system."

 

The new lawsuit would be separate from a case pending before an appeals court in the District of Columbia in which 16 Democratic state attorneys general are defending the legality of the payments.

 

If the subsidies vanish, low-income Americans who obtain insurance through Obamacare online marketplaces where insurers can sell policies would face higher insurance premiums and out-of-pocket medical costs. It would particularly hurt lower-middle-class families whose incomes are still too high to qualify for certain government assistance.

 

About 10 million people are enrolled in Obamacare through its online marketplaces, and most receive subsidies. Trump's action came just weeks before the period starting on Nov. 1 when individuals have to begin enrolling for 2018 insurance coverage through the law's marketplaces.

 

The administration will not make the next payment to insurers, scheduled for Wednesday, U.S. Attorney General Jeff Sessions said.

 

Senate Democratic leader Chuck Schumer expressed optimism about chances for a deal with Republicans to continue the subsidy payments.

 

"We're going to have a very good opportunity to get this done in a bipartisan way" during negotiations in December on broad federal spending legislation, "if we can't get it done sooner," Schumer told reporters.

 

Trump offered an invitation for Democratic leaders to come to the White House, while also lashing out at them. "We'll negotiate some deal that's good for everybody. But they're always a bloc vote against everything. They're like obstructionists," Trump told reporters.

 

The Senate failed in both July and September to pass legislation backed by Trump to repeal Obamacare due to opposition by a handful of Republican senators. One of them, Susan Collins, a moderate Republican from Maine who had been contemplating running for governor next year, on Friday said she planned to remain in the Senate and would use her voice in reforming the healthcare system.

 

SHARES OF INSURERS, HOSPITALS FALL

 

Hospitals, doctors, health insurers, state insurance commissioners and patient advocates decried Trump's move, saying consumers will ultimately pay the price. They called on Congress to appropriate the funds needed to keep up the subsidy payments.

 

Shares of U.S. hospital companies and health insurers closed down on Friday after the subsidies announcement. Centene Corp <CNC.N> closed down 3.3 percent and Molina Healthcare <MOH.N> closed down 3.4 percent. Among hospital shares, Tenet Healthcare <THC.N> finished 5.1 percent lower and Community Health Systems <CYH.N> declined 4.0 percent.

 

The nonpartisan Congressional Budget Office has estimated that erasing the subsidies would increase the federal deficit by $194 billion over the next decade because the government still would be obligated under other parts of Obamacare to help lower-income people pay for insurance premiums.

 

Trump, who as a candidate last year promised to roll back the law formally called the Affordable Care Act, received applause for his latest action during an appearance on Friday before a group of conservative voters.

 

"It's step by step by step, and that was a very big step yesterday," Trump said. "And one by one, it's going to come down, and we're going to have great healthcare in our country."

 

Earlier on Twitter he called Obamacare "a broken mess" that is "imploding," and referred to the "pet insurance companies" of Democrats.

 

Republicans for seven years had vowed to get rid of Obamacare, but deep intra-party divisions have scuttled their efforts to get legislation through the Senate, where they hold a slim majority.

 

Since taking office in January, Trump threatened many times to cut the subsidies. Health insurers that planned to stay in the Obamacare market prepared for the move in many states by submitting two sets of premium rates to regulators: with and without the subsidies.

 

The National Association of Insurance Commissioners said the change would drive up premium costs for consumers by at least 12 to 15 percent in 2018 and cut more than $1 billion in payments to insurers for 2017.

 

The White House announced the cut-off just hours after Trump signed an order intended to allow insurers to sell lower-cost, bare-bones policies with limited benefits and consumer protections.

 

Republicans have called Obamacare an unnecessary government intrusion into the American healthcare system. Democrats have said the law needs some fixes but noted that it had brought insurance to 20 million people.

 

 

-- © Copyright Reuters 2017-10-14

[Ulic]

Not really sure how that lawsuit is going to go when the court has already ruled that the Obama subsidies given through executive order are illegal as the funding has to be from Congress.

[craigt3365]

2 hours ago, Ulic said:

Not really sure how that lawsuit is going to go when the court has already ruled that the Obama subsidies given through executive order are illegal as the funding has to be from Congress.

The court has not ruled the subsidies are illegal.  Only Trump's legal team.  Thus, the numerous lawsuits.

 

Like the botched travel ban, this EO is going to cost us taxpayers a lot more money.  Trump's such a loser, as are those around him who support this.  Ryan being #1.

 

Please get your facts straight:

https://www.vox.com/policy-and-politics/2017/10/12/16070724/trump-cost-sharing-reductions-pulled

Quote

Rosemary Collyer, the judge hearing the case and a Republican appointee, first ruled in September 2015 that the House did in fact have standing to sue the administration over the payments. She then sided with the House in May 2016, deciding that the CSR payments could not be made without further congressional approval.

BS politics at it's worst.

[johnarth]

1 hour ago, craigt3365 said:

The court has not ruled the subsidies are illegal.  Only Trump's legal team.  Thus, the numerous lawsuits.

 

Like the botched travel ban, this EO is going to cost us taxpayers a lot more money.  Trump's such a loser, as are those around him who support this.  Ryan being #1.

 

Please get your facts straight:

https://www.vox.com/policy-and-politics/2017/10/12/16070724/trump-cost-sharing-reductions-pulled

BS politics at it's worst.

whichever way it goes America/s  rich can see their easy money disappearing they not happy.

[craigt3365]

4 minutes ago, johnarth said:

whichever way it goes America/s  rich can see their easy money disappearing they not happy.

America's rich are doing just fine.  They can afford health care.  It's the poor who are suffering...even more because of Trump.

[MyFriend You]

Good for You President Trump, stop making the Insurance Companies rich.   Not surprising, all the states listed have sanctuary cities in them, and  a high level of welfare recipients................

[jesimps]

18 minutes ago, TunnelRat69 said:

Good for You President Trump, stop making the Insurance Companies rich.   Not surprising, all the states listed have sanctuary cities in them, and  a high level of welfare recipients................

Well said! I have so much respect for this guy, a politician who tries to follow through on his election promises.

Also very brave in the face of the vitriol from the American left, of which we seem to have more than our fair share here in the LOS.

Edited October 14, 2017 by jesimps

[mrfill]

3 hours ago, TunnelRat69 said:

Good for You President Trump, stop making the Insurance Companies rich.   Not surprising, all the states listed have sanctuary cities in them, and  a high level of welfare recipients................

As I understand it, the withdrawal of these subsidies means the insurance companies will increase their premiums and cost middle America more each month. The insurance companies have not been stopped becoming richer - the premium hike will make up for the loss of subsidy and, presumably, the loss of income from those who can't afford the rise. It does assume their remaining customers will be delighted to pay a lot extra. If there is any danger of the insurance companies making a loss, I'm sure they will just walk away, as any business would. A nice thank you to the middle American Trump voters.

[craigt3365]

5 minutes ago, mrfill said:

As I understand it, the withdrawal of these subsidies means the insurance companies will increase their premiums and cost middle America more each month. The insurance companies have not been stopped becoming richer - the premium hike will make up for the loss of subsidy and, presumably, the loss of income from those who can't afford the rise. It does assume their remaining customers will be delighted to pay a lot extra. If there is any danger of the insurance companies making a loss, I'm sure they will just walk away, as any business would. A nice thank you to the middle American Trump voters.

Amazing some just don't get it.  Do they read sites like zerohedge and breitbart? LOL

 

You know how to make insurances companies less rich?  Make health care available to all.  No more health insurance companies.

[MyFriend You]

1 hour ago, mrfill said:

As I understand it, the withdrawal of these subsidies means the insurance companies will increase their premiums and cost middle America more each month. The insurance companies have not been stopped becoming richer - the premium hike will make up for the loss of subsidy and, presumably, the loss of income from those who can't afford the rise. It does assume their remaining customers will be delighted to pay a lot extra. If there is any danger of the insurance companies making a loss, I'm sure they will just walk away, as any business would. A nice thank you to the middle American Trump voters.

I just read even with the subsidies, the Insurance Groups have raised their premiums 20% in both 2016 and 2017.  Since this action has been done after Premiums for 2018 have been assessed there will be no raise next year  -  Maybe Congress  can always freeze current rates until this mess is cleared up or they authorize continuing the subsidies.

[riclag]

6 hours ago, jesimps said:

Well said! I have so much respect for this guy, a politician who tries to follow through on his election promises.

Also very brave in the face of the vitriol from the American left, of which we seem to have more than our fair share here in the LOS.

Gee! I wish I said that

[sirineou]

3 hours ago, craigt3365 said:

Amazing some just don't get it.  Do they read sites like zerohedge and breitbart? LOL

 

You know how to make insurances companies less rich?  Make health care available to all.  No more health insurance companies.

How can I give more than one "like" to the above post?

[Elkski]

I wonder how many of the people bin that photo were forced to be there?  With careers at stake if they said no.  In a few years are they going to tell their grandchildren those were forced smiles and claps?

[Trouble]

6 hours ago, mrfill said:

As I understand it, the withdrawal of these subsidies means the insurance companies will increase their premiums and cost middle America more each month. The insurance companies have not been stopped becoming richer - the premium hike will make up for the loss of subsidy and, presumably, the loss of income from those who can't afford the rise. It does assume their remaining customers will be delighted to pay a lot extra. If there is any danger of the insurance companies making a loss, I'm sure they will just walk away, as any business would. A nice thank you to the middle American Trump voters.

Probably what will happen is more of the insurance companies will continue pulling out of the Obamacare subsidized insurance markets. The result is less choice and more costly plans for those heretofore without insurance. Anthem-Blue Cross has already announced they will pull out of Covered California markets in all but 28 Northern California counties, basically pulling out of all populous counties in California where the big losses occur.  Anthem cited the instability of the markets as the cause. The subsidies were nothing but a payoff to insurance companies to market insurance coverage in a markets that were not profitable.  Obamacare was flawed from the get-go because there was no national debate on the matter BEFORE it was passed into law and no one in Congress had a clue what was in the law they passed. Obviously the concept of how it would be paid for came from a false presumption to begin with. Although insurance companies are said to be making profits from their business overall one must remember that it's not sustainable to have premiums be insufficient to pay claims expenses in any particular market. Basically the Obamacare markets are not profitable, thus the need for government subsidies.  As with most things the government does, and Obamacare was no exception, it's all pie in the sky stuff with fancy projections until put into practice. While I don't consider health care a right of birth, if we are going to try and provide coverage for all Americans we need a whole new plan, not a continually patched old one. It needs to be a phased in program where certain catastrophic coverage is provided as a base line, then over time it needs to be built on little by little to see what works and what doesn't work and what is sustainable and what is not. 

 

 

 

[ilostmypassword]

22 minutes ago, Trouble said:

Probably what will happen is more of the insurance companies will continue pulling out of the Obamacare subsidized insurance markets. The result is less choice and more costly plans for those heretofore without insurance. Anthem-Blue Cross has already announced they will pull out of Covered California markets in all but 28 Northern California counties, basically pulling out of all populous counties in California where the big losses occur.  Anthem cited the instability of the markets as the cause. The subsidies were nothing but a payoff to insurance companies to market insurance coverage in a markets that were not profitable.  Obamacare was flawed from the get-go because there was no national debate on the matter BEFORE it was passed into law and no one in Congress had a clue what was in the law they passed. Obviously the concept of how it would be paid for came from a false presumption to begin with. Although insurance companies are said to be making profits from their business overall one must remember that it's not sustainable to have premiums be insufficient to pay claims expenses in any particular market. Basically the Obamacare markets are not profitable, thus the need for government subsidies.  As with most things the government does, and Obamacare was no exception, it's all pie in the sky stuff with fancy projections until put into practice. While I don't consider health care a right of birth, if we are going to try and provide coverage for all Americans we need a whole new plan, not a continually patched old one. It needs to be a phased in program where certain catastrophic coverage is provided as a base line, then over time it needs to be built on little by little to see what works and what doesn't work and what is sustainable and what is not. 

 

 

 

Nonsense. We have the examples of most of the OECD nations to see what works and what doesn't.  And Obamacare basically took from those plans that use private insurers to provide universal coverage to its citizens. And it took the rest from single payer plans to provide coverage for the poorest citizens.

[mrfill]

23 hours ago, craigt3365 said:

Amazing some just don't get it.  Do they read sites like zerohedge and breitbart? LOL

 

You know how to make insurances companies less rich?  Make health care available to all.  No more health insurance companies.

 

Even that won't fix a lack of humourous observation.