Late Thursday night, the White House announced that the Trump administration would stop supporting a key component of Obamacare: cost-sharing subsidies, which are given to insurance companies that reduce co-pays and deductibles for people who receive insurance through the Affordable Care Act. Since Trump took office in January, the administration has been paying these subsidies on a month by month basis, rather than on a year by year basis, which was done under President Obama.
On the surface, this is clearly designed to weaken Obamacare as much as he can since a full repeal of the ACA could not pass in Congress. However, aside from having the optics of a victory that his base will support, this move will have major effects on both insurance companies as well as though who receive coverage through Obamacare, which is more than 10 million Americans.
Basically, since the subsidies are mandated under the ACA, they will not go away entirely, but the major change is that insurance companies will not be paid for them by the federal government. This means that people’s premiums and rates will likely go up to make up for the loss of the subsidies, and some insurers may even go as far as pulling out from the Obamacare exchanges entirely, which could potentially leave millions of Americans without medical coverage.
The move to cut the subsidies is very controversial, and is already being met with much criticism and backlash. The cuts are expected to be met with a flurry of lawsuits from insurance companies, state regulators, and consumer advocates that will seek to force the administration to make the payments, arguing that they are required by law.