April 12, 2017 / 9:32 PM / 4 months ago

Trump may halt insurer payments to force Democrats to table on healthcare

U.S. President Donald Trump addresses a joint news conference with NATO Secretary General Jens Stoltenberg in the East Room at the White House in Washington, U.S., April 12, 2017.Jonathan Ernst

WASHINGTON (Reuters) - U.S. President Donald Trump told The Wall Street Journal on Wednesday that he might consider withholding billions of dollars of Obamacare payments to health insurers to force Democrats back to the negotiating table on healthcare.

Insurers and major medical groups have warned that not funding the payments, called cost-sharing reduction subsidies, which help cover out-of-pocket medical expenses for low-income Americans, could wreak havoc in the individual insurance markets. Trump told The Wall Street Journal that by withholding the payments, Democrats will call him to negotiate.

Major medical and insurance groups penned a letter to Trump on Wednesday urging him to maintain funding for the subsidies, which amount to about $7 billion a year and are paid directly to insurers. They help cover premiums, deductibles and other medical expenses for about 7 million people who purchase health insurance on the individual health insurance market.

House of Representatives Republicans sued the Obama administration for funding the subsidies, which they argue have to be appropriated by Congress. A federal judge in May 2016 ruled in favor of the Republicans, prompting an appeal by the Obama administration. The case is pending in the U.S. Court of Appeals for the District of Columbia Circuit.

Major insurers, including Humana Inc and Aetna, have left or announced their intention to leave the Obamacare exchanges, citing multi-million-dollar losses and patient populations that are far costlier and sicker than they expected. They warned that withholding the subsidies would destabilize the market further and leave millions of consumers with little or no choice in picking a health insurance plan.

Reporting by Yasmeen Abutaleb; Editing by Chizu Nomiyama and Leslie Adler

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