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September 26, 2017

Trump Should End Obamacare Subsidy Payments Now


President Donald Trump has continued making the monthly Obamacare cost-sharing reduction (CSR) payments—just as President Obama did—even though he has no legal authority to do so. The president has threatened to end them, and now that it appears the Obamacare repeal-and-replace effort has tanked, the time has come to do so. 

The Affordable Care Act requires health insurers to reduce copays and other out-of-pocket costs for low- and moderate-income people buying health insurance through the Obamacare exchanges. And the law requires the federal government to reimburse the insurers to cover the losses from reducing those out-of-pocket costs. 

One big problem: Democrats didn’t actually appropriate the money when they passed the law in 2010 because they thought voters would be so pleased with Obamacare that Democrats would control Congress and the White House for decades. It wasn’t an oversight; it was hubris. 

But under that pesky little thing known as the U.S. Constitution, all federal spending must be appropriated by Congress. 

Once the Obama administration realized the problem administration officials asked Congress to pass an appropriation. But by that time Republicans were in no mood to make such concessions. So Obama just paid the SGR payments anyway as part of his “So sue me!” approach to governing.  

Republicans filed suit and a federal judge agreed. However, Republicans stopped pressing the case and Trump kept making the payments upon taking office thinking—incorrectly, it turns out—the issue would be resolved when repeal and replace passed in the first few months. 

But with the recent (and likely) final repeal-and-replace defeat, it’s time to return to the Constitution and for Trump to stop making the payments. Not because he wants health insurers to raise premiums or continue fleeing the Obamacare exchanges, but because the Constitution says all federal spending must be appropriated by Congress. 

Democrats, especially Barack Obama, health insurers and the media will moan that Trump doesn’t care about people and that he’s destabilizing the insurance market, even though the market began destabilizing immediately after the law took effect. But their complaints are just an indication of how little respect they have for the Constitution and the rule of law. 

If Democrats want the CSR payments to continue, there is one constitutional remedy: Introduce legislation that appropriates the money and pass it through Congress. 

But don’t look for anything more than a tepid effort, if that. Democrats think they gain more political points by calling Trump heartless, echoed by the media, while working to increase support for their much-beloved and long sought-after government-run single-payer health care system.



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