Donald Trump has threatened to stop payments that help millions to afford insurance, amid frustration over his party’s failure to repeal Obamacare

Republicans lawmakers are urging Donald Trump to continue paying critical health insurance subsidies that help lower-income people afford it, amid growing concern that the president will follow through on his threat to cancel them.

Frustrated by his party’s failure to repeal the Affordable Care Act, Trump has dangled the possibility that he would stop the payments – a move that experts say would send insurance markets into turmoil and cause premiums to rise dramatically.

Democrats have called the threat an attempt to “sabotage” the Affordable Care Act, often referred to as Obamacare.

'Wait for the show': how John McCain helped torpedo the Republican health plan Read more

Senator Lamar Alexander, the chairman of the Senate health, education, labor and pensions Committee, announced on Tuesday that his committee would begin holding hearings after Labor Day to discuss bipartisan legislation “to stabilize and strengthen the individual health insurance market” in 2018.

“There are a number of issues with the American healthcare system, but if your house is on fire, you want to put out the fire,” Alexander said in introductory remarks at the start of a committee hearing on Tuesday afternoon. “And the fire in this case is the individual health insurance market. Republicans and Democrats agree on this.”

Alexander publicly called on the president to continue the payments to insurance companies, knowns as cost-sharing reduction (CSR) subsidies. The payments help insurance companies offset low-income customers’ out-of-pocket medical expenses such as deductibles and co-payments.

“Without payment of these cost-sharing reductions Americans will be hurt,” he said.

He described the impact of cutting off the payments, which total an estimated $7bn in 2017 and cover roughly 7 million people. Without the funding, he said, the insurance markets would unravel and insurers would likely exit the marketplaces, leaving consumers with few, or possibly no, coverage options to buy insurance through the marketplace exchanges.

The insurers that stay will likely have to raise insurance premiums in order to offset the loss of the payments. He cited an analysis by the America’s Health Insurance Plans that found insurance premiums would increase by roughly 20%. Middle-class Americans would largely bear the brunt of the increases, as poorer customers could still access the subsidies.

Play Video 1:29 Chuck Schumer praises John McCain for rejecting healthcare bill – video

The announcement was the first attempt by senators of both parties to cooperate on healthcare after a Republican plan to repeal the Affordable Care Act collapsed in dramatic fashion on the chamber floor. On Monday, the Problem Solvers Caucus, a bipartisan group of House members, unveiled a suite of fixes to the healthcare law to stabilize the insurance markets. The most significant of their five proposals would appropriate funding for the law’s cost-sharing subsidies.

Trump has repeatedly raised the possibility that he might cancel the payments to insurance companies in an attempt to undermine the Affordable Care Act.



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

Democrats have accused the administration of trying to inject uncertainty into the insurance market.



“The American people need a president who puts their interests first,” Senate minority leader Chuck Schumer said in a floor speech on Tuesday, “not someone who plays political games with their healthcare.”

On Tuesday, several Republican senators joined Democrats in urging the president to continue payments.



“Just thinking about those families that would be hurt were they not [continued], I think it would be better to continue them,” said Senator Bill Cassidy, a Republican from Louisiana. “And I think it would be better then for Congress to do the constitutional thing and get it appropriated for a year or two.”

Susan Collins, a Republican from Maine who helped thwart the effort to repeal the Affordable Care Act, said it was “absolutely essential” that the president continue funding for the subsidies.

Facebook Twitter Pinterest Republican senator Susan Collins on Capitol Hill in Washington. Photograph: J. Scott Applewhite/AP

“When I hear them described as insurance company bailouts, that is just not an accurate description,” she said. “The reason that we have CSRs is to help low-income people who earn only between 100% and 250% of the poverty rate afford their out-of-pocket costs. That seems to be lost in the debate.”

Trump has referred to the payments as “bailouts” for the insurance companies, implying that the subsidies are compensation for business failings. Rather, they help reimburse insurance companies for the money they lose.

But not all Republicans agree. Senator Ted Cruz of Texas, a fierce critic of the healthcare law who pushed for its full repeal, agreed with Trump: “We need to honor our promise to repeal Obamacare – and billions for the insurance companies isn’t doing that,” Cruz said.

Collins, McCain and Murkowski: Republican trio who defied party to vote no on health bill Read more

During the committee hearing, Alexander said reducing the uncertainty about whether the payments will be continued should bring down premiums in 2018.

“If the president were to approve continuation of cost-sharing subsidies for August and September, and if Congress in September should pass a stabilization plan that includes cost-sharing for one year. It is reasonable to expect that the insurance companies in 2018 would then lower their rates,” he said.

Though Republicans were not able to dismantle the healthcare law this year, its immediate fate lies largely in the hands of the president.

Beyond canceling subsidies, the administration could also refuse to enforce the individual mandate, which requires Americans to purchase healthcare or face a penalty. It could also refuse to help customers sign up for insurance coverage on the marketplace when enrollment opens in November.

“The ball is in the president’s court,” Schumer said. “He can make the payments as the law requires and needs, or he can sabotage our healthcare system.”