Donald Trump announced that the federal government halt cost-sharing reductions with insurance companies, threatening the stability of the insurance marketplace and raising premiums for all as well as increasing the federal deficit by $194 billion.
Unfortunately, though Trump’s sabotaging the law, he has good reason to end cost-sharing reductions: They’re probably unconstitutional because Congress never appropriated the funds spent by both the Obama and Trump administration.
Congress, and Congress only, has the power of the purse. Whereas parts of the ACA have a permanent appropriation — the tax credits given to low- and middle-income Americans do not have to be reappropriated every year — the cost-sharing reductions are not included in those provisions.
The Obama administration unsuccessfully argued that Congress intended for the cost-sharing reductions to be grouped with tax credits and their permanent appropriation, an argument similar to the intent argument made in King v. Burwell. A federal judge did not buy that reasoning.
We won’t know the case’s ultimate outcome as the Trump administration will drop its appeal (Trump’s decision made it moot). Regardless of intent, or what a court would divine as intent, the hastily-written ACA final text did not permanently appropriate cost-sharing reductions.
And Congress has not appropriated them since the Republicans took over the House of Representatives in 2010.
It must do so now. As mentioned, ceasing the subsidies increases premiums and gives insurance companies a reason to leave the marketplace in 2018. The poor see access to healthcare restricted and the federal government spends more to cover rising premiums.
Let’s be smart and appropriate cost-sharing reductions. Failing to do so hurts everyone.