One-Two Punch to the ACA: First An Executive Order, Now Trump Halts Cost Subsidies to Health Insurers


Late yesterday, the White House stated that it would immediately stop the funding for billions of dollars in Affordable Care Act (ACA) subsidies. The explanation is that, based on guidance from the Justice Department, the Department of Health and Human Services (HHS) has determined there is no appropriation for the payments and the government can’t lawfully make the payments. HHS was more specific, saying the payments “will be discontinued immediately” and citing a legal opinion from Attorney General Jeff Sessions.

“We believe that the last Administration overstepped the legal boundaries drawn by our Constitution,” acting HHS Secretary Eric Hargan and Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in a joint statement, “Congress has not appropriated money for [the payments], and we will discontinue these payments immediately.”

This move, coupled with yesterday’s Executive Order (see yesterday’s blog) appear to be intended to force Congress to act by either shoring up the ACA or repealing and replacing the ACA. Negotiations between Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) on a short-term package of changes to the ACA now has new urgency. This package has been expected to include funding for the cost-sharing reductions in exchange for additional state flexibility on ACA regulations. If no legislative action is taken, the ACA exchanges may face major premium increases and disruption in the coming months.

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