Trump's ObamaCare subsidy cutoff triggers political war

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Trump: Insurance companies made a fortune with subsidies

President Trump says if Democrats were smart, they'd come to the White House and negotiate better health care.

President Trump touched off a political melee Friday after his administration announced it would “immediately” halt payments to insurers under ObamaCare, with Democrats claiming the move will “break” insurance markets – and the president saying Democrats should come to the negotiating table to “fix” the law if they’re so concerned.

"The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!" he said in a pre-dawn tweet on Friday.

He added, "ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!"

The Justice Department took swift action, notifying a federal appeals court in Washington, D.C., in connection with a related lawsuit that an upcoming Oct. 18 payment “will not occur.”

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Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi – the top two congressional Democrats – blasted the move, in the latest indication that their political dalliance with the president on immigration and budget issues is over for now.

“Sadly, instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans’ health premiums,” they said in a written statement. “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America. Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”

Sen. Dianne Feinstein, D-Calif., who is running for reelection, said without congressional action, Trump’s “decision to stop reimbursing insurance companies for the cost of reducing co-pays for low-income enrollees will break individual insurance markets across the country.”

Sen. Chuck Schumer and Rep. Nancy Pelosi, seen here meeting with President Trump, are not happy with the president's latest move on ObamaCare. (AP)

The Department of Health and Human Services had made the announcement in a statement late Thursday. "We will discontinue these payments immediately," said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. Sign-up season for subsidized private insurance starts Nov. 1, in less than three weeks, with about 9 million people currently covered.

In a separate statement, the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. Officials said a legal opinion from the Justice Department supports that conclusion.

However, the administration had been making the payments from month to month, even as Trump threatened to cut them off to force Democrats to negotiate over health care. The subsidies help lower copays and deductibles for people with modest incomes.

The decision is one of the most significant steps taken in the president’s bid to ultimately “repeal and replace” what’s considered the signature legislation of his White House predecessor.

Trump's decision was expected to rattle already-unsteady insurance marketplaces. The president has previously threatened to end the payments, which help reduce health insurance copays and deductibles for people with modest incomes, but remain under a legal cloud.

Trump has privately told at least one lawmaker that the payments may continue if a bipartisan deal is reached on health care, The Wall Street Journal reported.

The president's action has already triggered a lawsuit from the attorney general of North Carolina. Its likely more will come from other states, as Xavier Becerra, California’s attorney general, called the decision “sabotage,” and promised a lawsuit.

They contend the subsidies to insurers are fully authorized by federal law, and the president's position is reckless.

The decision came after Trump on Thursday signed an executive order to make lower-premium health insurance plans more widely available.

Trump employed the executive order after the Republican-controlled Congress has been unable to pass a plan to repeal and replace ObamaCare.

The president says he still wants Congress repeal and replace the Obama health care law. But he says his order will give people more competition, more choices and lower premiums.

The Associated Press contributed to this report.