The Trump Administration Won't Sabotage Obamacare—Yet

In its second about-face this week, the White House said it would continue making subsidy payments to insurers as part of the Affordable Care Act. Democrats were demanding the money as part of negotiations to avert a government shutdown.

Tom Price, the secretary of health and human services, and Mick Mulvaney, Trump's budget director (Andrew Harnik / AP)

The Trump administration won’t try to wreck the Affordable Care Act on its own quite yet, telling Democrats it plans to continue making payments to health insurers considered crucial for the law’s stability.

Reince Priebus, the White House chief of staff, informed Democratic leaders of the administration’s plans by phone on Wednesday in an effort to resolve one of the final obstacles in negotiations over legislation to keep the government open past Friday. It was the second about-face for the White House in the budget talks this week; on Monday night the president said he would back off a demand for a down payment from Congress for his southern border wall.

“Our major concerns in these negotiations have been about funding for the wall and uncertainty about the [cost-sharing reduction] payments crucial to the stability of the marketplaces under the Affordable Care Act,” House Minority Leader Nancy Pelosi said Wednesday afternoon. “We’ve now made progress on both of these fronts.” Pelosi said there were other issues that remained unresolved in the spending-bill talks, but the prospect of a government shutdown has decreased. If by Friday Congress doesn’t pass an omnibus appropriations bill funding the government through September, lawmakers are expected to approve a stopgap measure to buy them some more time.

The subsidies help insurers offset the cost of covering older and sicker customers under the law, which bans discrimination based on age or preexisting medical conditions. But they have been the subject of litigation since 2014, when House Republicans filed a lawsuit alleging that the Obama administration was making the payments without the express authorization of Congress. The House won an initial victory in the case, and Trump has twice threatened to withhold the payments—first as leverage to get Democrats to cooperate with efforts to repeal Obamacare and then in a bid to win their support for funding the wall.

But the White House has now backed off both times, in part because it is under pressure both from the insurance industry and from some Republican lawmakers, who fear a political backlash if their constituents suffer premium increases or lose their insurance as a result of the missed payments.

Conservatives, on the other hand, were unhappy with the reversal. “The Constitution provides that ‘No money may be drawn from the Treasury, but in consequence of appropriations made by law.’ Congress has made no appropriation for Obamacare cost-sharing reduction payments,” said Representative Mark Walker of North Carolina, chairman of the conservative Republican Study Committee. “Therefore, we believe making these payments without congressional approval is both clearly illegal and unconstitutional, as the district court held in House v. Price.” Democrats have already criticized the Trump administration for trying to undermine Obamacare in other ways even as Republicans stumbled in their efforts to repeal it. But withholding the subsidy payments was seen as far more damaging to the law’s short-term stability.

The move on Wednesday was not a total victory for Democrats, however. Pelosi and other lawmakers had pushed for the spending bill they’re now negotiating to include language requiring the administration to continue the subsidies. The White House rejected that demand, with budget chief Mick Mulvaney saying the president would not sign legislation with that provision included. So while the administration has decided to continue the Obamacare payments on its own, there’s nothing to stop it from halting them down the road.