Congress, White House Resolve Gov’t Shutdown Threats Over O’Care Subsidies

A major impasse to Congress coming to a deal to keep the government funded past Friday was overcome on Wednesday, with signals from the White House that it would continue to pay Obamacare subsidies that Democrats wanted explicitly guaranteed in the funding legislation being negotiated. Earlier in the day, House Speaker Paul Ryan said appropriating the payments wouldn’t be in the funding bill.

Democratic leaders issued statements Wednesday afternoon that seemed to confirm reports that the White House had offered assurances to lawmakers that the payments would continue, at least in the short-term, despite President Trump’s previous suggestions that he would use them as leverage to force Democrats to negotiate on dismantling the Affordable Care Act.

“It is good that once again the president seems to be backing off his threat to hold health care and government funding hostage,” Senate Minority Leader Chuck Schumer (D-NY)  said in a statement, adding that there other issues still being resolved in the government funding negotiations.

“I am pleased that the White House confirmed what I’ve been asking for: that they will uphold their commitment under the law to continue making cost sharing reduction payments,” House Minority Whip Steny Hoyer (D-MD) said in his own statement.

House Republicans sued the Obama administration in 2014 over the subsidies, which were being made out of the Treasury Department, alleging they were illegal because they were not explicitly appropriated by Congress. A federal judge agreed last year but allowed them to continue while her decision in favor of the Republicans was appealed by the Obama administration.

The payments became a flashpoint in the current government funding battle after Trump, earlier this month, speculated that if he withheld the payments Democrats would come to the table on replacing Obamacare. Dems responded by making the payments a priority in their funding negotiations, though this week some Democrats were waffling on whether they would shut down the government over them.

The payments subsidize insurers for keeping out-of-pocket costs down for low-income consumers, as mandated by the ACA. If eliminated, it’s anticipated that insurers would be forced to jack up premiums to make up the revenue shortfall or withdraw from ACA exchanges entirely, risking a collapse of the individual market.

Even though the government funding crisis over the payments appears to have been averted, that still doesn’t answer questions about their longterm fate, specifically where the lawsuit is concerned.

Since Trump was elected, it has been unclear whether the Justice Department under his administration was going to continue to defend them, and a pause on the legal proceedings was granted by the appeals court until May for the parties to figure out their next move.

Hoyer, in his statement, pointed to the current legal uncertainty and argued that it was now “incumbent upon House Republicans to withdraw their lawsuit that seeks to block these payments.”

A top insurer group echoed his desire for a more action to be taken on cementing their longterm fate.

“We continue to need clarity,” Kristine Grow, a spokeswoman for America’s Health Insurance Plans, said in an email to TPM in response to the Dems’ statements.

Meanwhile, some Republicans pointed to the legal case as reason for the White House not to continue the subsidies.

“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,” Rep. Mark Walker (R-NC), chairman of the Republican Study Committee, said in a statement. “Therefore, we believe making these payments without congressional approval is both clearly illegal and unconstitutional, as the district court held in House v. Price.”