There is widespread agreement that the move will lead to higher premiums, a potential exodus of insurers from the Obamacare markets and add nearly $200 billion to the federal deficit.
On Thursday, President Trump dropped an executive order on healthcare that wasn't entirely straightforward but may result in higher insurance premiums on polices that don't offer many consumer protections.
President Trump has made the payments, guaranteed to insurers under Obamacare to help lower out-of-pocket medical expenses for low-income consumers, each month since taking office in January. So when premiums rise, the subsidies rise in tandem.
His decision is likely to please those among his political base who detest the Obamacare system, which many Republicans have attacked for years as an unneeded government intrusion in Americans' healthcare.
But those who get no subsidies are exposed to the full brunt of cost increases that could reach well into the double digits in many states next year. "They just have to buy their own insurance", Emanuel, one of the architects of the ACA, told Morning Edition Friday.
The "cost-sharing reduction payments", worth an estimated $7 billion this year, are meant to reduce out-of-pocket costs for low-income Americans on Obamacare. The association health plans could attract young, healthy people and leave a sicker, more expensive patient pool in the individual insurance markets created under Obamacare, driving up premiums.
Under the Obama administration, such short-term plans could not last more than three months, but Trump plans to extend that duration to almost a year.
The payments are the subject of a lawsuit brought by House Republicans against the Obama administration that alleged they were unlawful because they needed to be appropriated by Congress. A judge agreed but allowed the administration to continue making the payments during an appeal.
The president has threatened for months on cutting these payments, with many insurers already planning for this possibility. He repeated that characterization on Twitter Friday.
The White House announced Thursday night that the administration will slash Obamacare subsidy payments to insurers.
It directs Trump's administration to work toward an increase in the use of association health plans, which would allow small business owners to join together in groups to purchase health insurance for themselves and their employees.
In a nod to that same constituency, the president signed an executive order earlier on Thursday to make it easier for Americans to buy bare-bones health insurance plans.
Trump's order weakens Obamacare in part by giving people more access to plans that do not cover essential health benefits such as maternity and newborn care, prescription drugs, and mental health and addiction treatment.
This additional assistance can be especially important because many low-cost health plans force consumers to pay very high deductibles before their medical care is covered.
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