Trump weighs cutting off Obamacare subsidies, governors beg to keep them

By Robert Donachie

A bipartisan group of governors reached out to President Trump Wednesday to urge him to continue paying out Obamacare subsidies in order to keep the health insurance marketplace stable.

Democrat and Republican governors issued a statement to the president Wednesday, requesting that he not follow through with his threats to cut off federal funding for cost-sharing reductions (CSRs)–subsidies that help low to moderate income individuals purchase health insurance on the Obamacare state exchanges.

Trump threatened to cut off funding for Obamacare subsidy payments Monday morning, echoing a statement he made Saturday as he continues to push Congress to repeal and replace Obamacare.

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STARVE IT: If Trump chooses not to reimburse insurers for CSRs, insurers would be forced to increase plan premiums.

Trump tweeted Monday that “If ObamaCare is hurting people, & it is, why shouldn’t it hurt the insurance companies & why should Congress not be paying what public pays?”

“The Administration has the opportunity to stabilize the health insurance market across our nation and ensure that our residents can continue to access affordable health care coverage,” according to the statement by the Health and Human Services Committee of the National Governors Association. “A first critical step … is to fully fund CSRs (cost-sharing reduction payments) for the remainder of calendar year 2017 through 2018.”

The governors are on message with what major health insurance providers and insurance lobbying groups are also telling the administration. The federal government is slated to pay out $7 billion in CSRs in 2017 and $10 billion in 2018.

Due to the way Obamacare is structured, if Trump chooses not to reimburse insurers for CSRs, insurers would be forced to increase plan premiums. Insurance companies will not simply eat the difference between what the enrollee pays and what they are left to cover. The excess cost would be shifted to the larger consumer base through higher premiums. Essentially, the market would be further unstabilized if the administration stop funding these subsidies, which it is currently doing on a month-to-month basis.

Senators are scheduled to hold further hearings on health care reform once they return to Washington in September after the August recess concludes.

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