Late Thursday night, the Trump administration announced that cost-sharing reduction payments to health insurers — a key prop for Obamacare — “must stop, effective immediately.”
“CSR payments are prohibited unless and until a valid appropriation exists,” said Attorney General Jeff Sessions in a legal opinion issued to the Department of Health and Human Services and the Treasury Department.
Sessions’ legal opinion reads in part:
As you are aware, the prior administration originally sought an appropriation to fund CSR payments–suggesting it believed such an appropriation was necessary-–but then later concluded that section 1324’s permanent appropriation was available. The U.S. House of Representatives sued, contending that Congress had not appropriated funds for CSR payments. The U.S. District Court for the District of Columbia agreed, holding that section 1324 does not appropriate funds for CSR payments.
The memo notes that the Obama administration appealed the federal court’s decision, and the court put the appeal on hold, to allow time for potential legislative action by Congress, which never happened.
The memo also notes that while Congress did permanently appropriate money for Obamacare’s permanent tax credits, it did not permanently appropriate money “to directly fund the CSR program.”
“Congress has the power of the purse, and it is up to Congress to decide which programs it will and will not fund,” Sessions wrote.
The announcement ending taxpayer subsidies to insurance companies follows President Trump’s signing of an executive order earlier on Thursday that sets the stage for individuals in similar industries to band together for the purpose of buying health insurance, including across state lines.