After Trump O’Care Threats, Dems Signal Potential Gov’t Funding Fight Over Subsidies

House Democratic Leader Nancy Pelosi of California, and Senate Democratic Leader Chuck Schumer of New York speak to reporters about the Congressional Budget Office projection that 14 million people would lose health coverage under the House Republican bill dismantling former President Barack Obama's health care law, on Capitol Hill in Washington, Monday, March, 13, 2017.  (AP Photo/J. Scott Applewhite)
J. Scott Applewhite/AP

Democrats are signaling they’re ready to up the ante after President Donald Trump threatened to end certain Obamacare subsidies – and risk a collapse of the individual market – in a push to make the subsidies a major issue in ongoing government funding negotiations.

Congressional Democrats will seek to create a permanent funding mechanism for the insurer subsidies, which are currently the target of a House GOP lawsuit that claims the payments are illegal because they were not explicitly appropriated by Congress.

The potential showdown over funding the government comes after Trump told the Wall Street Journal on Wednesday that he was considering shutting off the billions of dollars in payments to force Democrats to play along with his efforts to repeal the Affordable Care Act.

“The President’s comments on stopping the Cost Sharing Reduction payments will increase costs, is a threat to the good health of the American people and a threat to keeping government open,” an aide to House Minority Leader Nancy Pelosi (D-CA) told TPM Thursday in an email.

A Democratic Senate aide said in an email that Trump’s Wall Street Journal comments put the subsidies front and center of what Democrats will fight for while hammering out with Republicans a deal that will seek to thwart a government shutdown in the weeks to come.

The decision by Democrats to make the CSR payments a top priority in the government funding negotiations was first reported by the Washington Post. 

The payments subsidize insurers for keeping out-of-pocket costs down for low income consumers, as mandated by the Affordable Care Act. If the payments are halted, it’s anticipated that insurers would raise their premiums by an estimated 19 percent or exit the individual market entirely.

In addition to the larger market ramifications, some 7 million consumers benefit from the subsidies.

The lawsuit, which was brought in 2014 by House Republicans against the Obama administration, has been paused until May for both the House GOP and the Trump administration to figure out their next steps.

In response to Trump’s vow to hold the subsidies hostage to get Democratic cooperation on repeal, top congressional Dems  issued blistering statements that delivered a resounding “no” to his offer.

“This cynical strategy will fail,” said Senate Minority Leader Chuck Schumer (D-NY) in a statement. “Our position remains unchanged: drop repeal, stop undermining our health care system, and we will certainly sit down and talk about ways to improve the Affordable Care Act.”

Sen. Ron Wyden (D-OR), the ranking member of the Senate Finance Committee, which has jurisdiction for the Affordable Care Act, said in a statement that Democrats “will not negotiate with hostage takers.”

“There is no outcome in which the administration sabotaging insurance markets persuades Democrats to pass Trumpcare, a disastrous proposal which would only make our health care system worse,” Wyden said.

Trump, in seeking to use the payments as leverage, finds himself lined up against not only Democrats, but major health care industry groups, and even the Chamber of Commerce, which joined a letter to Trump earlier this week calling for the subsidies to be preserved.