Trump to halt subsidies to health insurers

US President Donald Trump plans to halt payments to insurers under the Obama-era health care law. (AFP)
Updated 13 October 2017
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Trump to halt subsidies to health insurers

WASHINGTON: In a brash move likely to roil insurance markets, President Donald Trump plans to halt payments to insurers under the Obama-era health care law that he has been trying to unravel for months.
Two people familiar with the decision described the plan late Thursday night, seeking anonymity because they were not authorized to speak publicly.
The White House said in a statement that the government cannot legally continue to pay the so-called cost sharing subsidies because they lack a formal authorization by Congress. The administration has been making the payments from month to month, even as Trump threated to cut them off to force Democrats to negotiate over health care.
The president’s action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorized by federal law, and the president’s position is reckless.
Word of Trump’s plan came on a day when the president had signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama’s Affordable Care Act.
Frustrated over setbacks in Congress, Trump is wielding his executive to bring the “repeal and replace” debate to a head. He appears to be following through on his vow to punish Democrats and insurers after the failure of GOP health care legislation.
On Twitter, Trump has termed the payments to insurers a “bailout,” and administration officials have questioned their legal authorization. It’s unclear if the president will get Democrats to negotiate by stopping payment.
Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year. That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising. Insurers, hospitals, doctors’ groups, state officials and the US Chamber of Commerce have urged the administration to keep paying.
Leading GOP lawmakers have also called for continuing the payments to insurers, at least temporarily, so constituents maintain access to health insurance. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tennessee, is working on such legislation.
The so-called “cost-sharing” subsidies defray out-of-pocket expenses for people with low-to-modest incomes, and can reduce a deductible of $3,500 to a few hundred dollars. Assistance is available to consumers buying individual policies; people with employer coverage are unaffected by the dispute.
Nearly 3 in 5 HealthCare.gov customers qualify for help, an estimated 6 million people or more. The annual cost to the government is currently about $7 billion.
But the subsidies have been under a legal cloud because of a dispute over whether the Obama health care law properly approved the payments to insurers. Adding to the confusion, other parts of the Affordable Care Act clearly direct the government to reimburse the carriers.
For example, the ACA requires insurers to help low-income consumers with their copays and deductibles.
And the law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.
But there’s disagreement over whether the law properly provided a congressional “appropriation,” similar to an instruction to pay. The Constitution says the government shall not spend money unless Congress appropriates it.
House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies.
A district court judge agreed with House Republicans, and the case has been on hold before the US appeals court in Washington. Up to this point the Trump administration continued making the payments, as the Obama administration had done.
A panel of appellate judges recently ruled that a group of states can defend the legality of the subsidies if the Trump administration decides to stop paying.
While the legal issue seems arcane, the impact on consumers would be real.
Independent experts estimate that premiums for a standard “silver” plan will increase by about 19 percent without the subsidies. Insurers can recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there’s no legal question about their appropriation.
Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases.
But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases. It’s also estimated that taxpayers would end up spending more.


Egypt denies Sinai battle is choking off food and medicine supplies

Updated 35 min 48 sec ago
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Egypt denies Sinai battle is choking off food and medicine supplies

  • Human Rights Watch warned of a wider humanitarian crisis if North Sinai continued to be cut off from the Egyptian mainland, saying the army’s actions “border on collective punishment.”
  • Air strikes and raids have killed scores of suspected militants, the military says, as it imposes curfews and tight movement restrictions around towns in North Sinai.

CAIRO: An Egyptian military campaign to defeat Daesh militants in the northern Sinai Peninsula is choking essential food and medical supplies to thousands of residents in the desert region, Human Rights Watch said on Monday. The army denied the charge.
The New York-based organization warned of a wider humanitarian crisis if North Sinai continued to be cut off from the Egyptian mainland, saying the army’s actions “border on collective punishment.”
The army launched an operation in February to crush militants who have waged an insurgency that has killed hundreds of soldiers, police and residents over many years.
Air strikes and raids have killed scores of suspected militants since then, the military says, as it imposes curfews and tight movement restrictions around towns in North Sinai. The army has said it is winning the battle.
A military spokesman denied there were shortages, saying it was providing food and medical support throughout the areas it operated in, The HRW report had used “undocumented sources” in its report, he said.
“Thousands of food parcels have been and are being provided to people in North Sinai,” Col. Tamer Al-Rifai, the spokesman, added.
International news outlets are prevented from traveling to North Sinai to report.
Residents said food supplies, medicine and fuel were insufficient and that movement restrictions meant most people were unable to leave the region, HRW reported.
“A counter-terrorism operation that imperils the flow of essential goods to hundreds of thousands of civilians is unlawful and unlikely to stem violence,” HRW’s Middle East and North Africa director Sarah Leah Whitson said.
The report said authorities had banned the sale of petrol and cut communication lines, water and electricity in some areas of North Sinai including near the border with the Gaza Strip.
Residents told Reuters last month they often waited for hours for bread handouts which were not guaranteed to arrive.
Defeating the militants and restoring security after years of unrest that followed Egypt’s 2011 popular uprising has been a promise of President Abdel Fattah El-Sisi, who was re-elected in March in a landslide victory against no real opposition.
El-Sisi’s critics say he has presided over Egypt’s worst crackdown on dissent. Supporters say such measures are needed to bring stability and improve the country’s hard-hit economy.
In Sinai, analysts and foreign diplomats say heavy-handed military tactics including air strikes and demolitions of populated areas have failed to defeat the insurgency.