Obamacare Subsidies a Focal Point In Government-Funding Showdown

Republicans dropped demands for a border wall, but the health care fight remains.

Senate Minority Leader Chuck Schumer, accompanied by Sen. Debbie Stabenow, during a media availability after a policy luncheon on Tuesday.
AP Photo/Alex Brandon
Alex Rogers and Daniel Newhauser
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Alex Rogers and Daniel Newhauser
April 25, 2017, 8 p.m.

Talk of paying for a border wall this week fell away on Tuesday, revealing the real battle lines in a must-pass bill to keep the federal government running: whether to fund a provision that helps low-income Americans buy health insurance.

With only three days to spare before government funding expires, the greatest immediate question before Congress is whether the Trump administration will continue providing subsidies to insurers to help lower out-of-pocket costs for about 7 million low-income Americans under the Affordable Care Act.

The idea has some support among Republicans. Several GOP senators said Tuesday they would support Congress appropriating the money in the funding bill in order to keep the marketplace stable. “I think we need to ensure that Americans keep their coverage,” said Republican Sen. Bill Cassidy. But many conservatives, especially in the House, will loathe funding a piece of Obamacare that they have in the past characterized as a bailout.

So Democrats, led by Senate Minority Leader Chuck Schumer, House Minority Leader Nancy Pelosi, and House Appropriations Committee ranking member Nita Lowey, say they are giving Republicans an opportunity to bail themselves out of an awkward position.

In 2014, House Republicans sued the Obama administration for issuing the subsidies without consulting Congress. They argued that since the subsidies were never authorized during the congressional appropriations process, the White House violated Congress’s rights. That court case is still pending, but since Donald Trump is now president, Republicans essentially control both sides of the argument.

Trump could drop the executive branch’s defense of the case and end the subsidies at any time. Alternately, if the House prevails in the lawsuit, the subsidies would be struck down. But without them, the Affordable Care Act’s insurance markets would be severely damaged, and since the GOP’s efforts to replace Obamacare flopped last month, Trump and House Republicans could be blamed for any disruptions to the marketplace.

So Democrats are saying that it is actually in Trump’s and Congress’s interest to do away with any ambiguity surrounding the subsidies. Democrats are pushing for language to clarify that Congress does indeed authorize the subsidies, according to a Democratic leadership aide.

Doing so would, in effect, force House Republicans to vote for a bill that renders their lawsuit moot and upholds a section of a law they revile. But leaving it to a judge to decide whether millions of low-income Americans can afford health care could be risky, especially for the party that controls both chambers of Congress and the White House.

“Republicans created this problem for themselves,” House Democratic Whip Steny Hoyer said in a statement. “President Trump can instruct his administration today to make clear that the cost sharing reduction payments will continue to be made. If President Trump does not continue cost sharing reduction payments, or House Republicans succeed in stopping the subsidies in the courts, millions of Americans will be adversely impacted.”

The subsidies would cost the federal government $10 billion in 2018, according to the Kaiser Family Foundation. But it would actually cost even more to get rid of them—about $12.3 billion—since tax credits would have to rise as premiums increase.

Trump must sign a bill by Saturday to keep the government up and running. Congress is considering a bill that would extend the roughly $1 trillion government spending rate through September, but it is likely lawmakers will need first to pass a short-term measure to avoid a shutdown this weekend and give negotiators a few more days to pass the legislation.

“It appears that way, but I will not support an extended CR. I will not vote for it. And I don’t think a number of my colleagues will either,” said Republican Sen. John McCain, who has long said he will not support a long-term continuing resolution.

While it remains unclear how Congress will address the subsidies, Republicans offered a proposal to Democrats on Tuesday that did not fund a wall on the U.S.-Mexico border, lowering the possibility of a partial shutdown. The Trump administration as recently as last week had insisted on including money for a border wall in this bill. But the administration backed off due to the broad opposition from Democrats and concerns from some Republicans. The bill is expected to include other substantial funding for border security.

As the fight over the Obamacare subsidies remains the biggest hurdle, Democrats have also raised other, relatively minor concerns, including whether to backfill a Medicaid funding shortfall in Puerto Rico and whether to fund health benefits for coal miners.

Appropriators are anxious to wrap up this year’s appropriations process so they can move on to writing bills to fund the government for fiscal year 2018. They are already behind because they had to focus on funding for the rest of fiscal year 2017 and because of the presidential transition.

“We’ve got 12 appropriations bills to mark up for 2018, which we have not started yet. We’re usually done with that process by this time,” GOP Rep. Tom Rooney said. “We’ve got less than 12 working weeks before the August break, which means we couldn’t get them all done even if we wanted to.”

Adam Wollner contributed to this article.
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