Obamacare subsidies remain sticking point in spending bill negotiations

Nancy Pelosi and Chuck Schumer
House Democratic Leader Nancy Pelosi and Senate Democratic Leader Chuck Schumer on Capitol Hill, March 13, 2017. (Photo: J. Scott Applewhite/AP)

WASHINGTON — With a Friday deadline for a government shutdown looming, Democrats and Republicans in Congress are stalled on the issue of continued funding for Obamacare.

House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., have said any short-term spending bill must include language guaranteeing Congress will pay for the Affordable Care Act’s cost-sharing subsidies, which lower health care costs for 7 million people.

Currently, the Trump administration is making those cost-sharing payments to insurance companies as required by the health care law, but a lawsuit by House Republicans — launched when President Obama was in office — could change that.

The lawsuit asserts that only Congress — not the administration — can legally appropriate the billions of dollars owed to insurance companies under Obamacare. If Republicans win their case, the Trump administration will be ordered to stop paying the insurance companies, which could prompt insurance companies to flee the exchanges. (The next scheduled court date in the case is in May.)

It’s also possible that even if Republicans lose in court, the Trump administration could decide to stop making the payments, thereby imperiling the exchanges. Trump has threatened in the past that he would let Obamacare “fail” and blame Democrats. Director of the Office of Management and Budget Mick Mulvaney told Pelosi in a conversation Tuesday night that the administration had not yet decided whether to make the insurance payments that are due in May, according to an aide briefed on the conversation.

A Democratic leadership aide said Tuesday that the spending bill negotiations had deadlocked over the issue, as the White House does not want the Obamacare payments in the emerging spending bill.

Several Senate Republicans said Tuesday the cost-sharing money is crucial to keep the insurance market stable until their party repeals and replaces Obamacare. But it remains unclear if they’ll include the payments in the spending bill that must pass Friday to avert a government shut down.

“We want to keep the market stable,” said Sen. John Thune, R-S.D. “It’s probably going to require that the existing mechanism for doing that, these cost-sharing subsidies, be in place for a while.”

But Thune said he wasn’t sure it was necessary for Congress to take the lead on appropriating the funds right now.

Sen. Bill Cassidy, R-La., said he believes Congress should appropriate the subsidies so that no one loses health coverage. “We have to clean up this mess” of Obamacare, Cassidy added.

Reps. Greg Walden, R-Ore., and Tom Cole, R-Okla., have also indicated they believe Congress should pay the insurance companies, which are owed an estimated $7 billion this year, according to the Congressional Budget Office. (One fact boosting the payments’ chances: Ending them would cost the government more money overall due to increases in the costs of another subsidy, according to an analysis by the Kaiser Family Foundation.)

Not everyone in the Democratic leadership is on board with insisting on the payments, however. House Minority Whip Steny Hoyer, D-Md., told reporters Tuesday that he didn’t think his party should be a part of the negotiation, since he disagrees with the House Republicans that it’s not Trump’s job to appropriate the funds.

“I’m not urging my side to have this as part of the negotiations,” Hoyer told reporters, according to Politico. “The president has the authority to go ahead and do it and he ought to do it.”

It’s likely Congress will ask for a week extension of previous spending levels to avert the shutdown and continue hammering out a deal before funding for the government expires at midnight Friday.

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