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Paul Ryan May Not Want to Immediately Blow Up Obamacare After All

Mar 31, 2017

The American Health Care Act's (AHCA) failure was never going to assure that the law it was trying to replace, the Affordable Care Act (ACA), would escape unscathed given a highly adversarial White House and Congress. But it appears that Congressional GOP leaders may not be intent on deliberately weakening Obamacare's marketplaces in the near future, if new comments by House Speaker Paul Ryan are any indication.

"While the lawsuit is being litigated then the administration funds these benefits. That’s how they’ve been doing it and I don’t see any change in that," Ryan told reporters on Thursday, referring to a special set of ACA subsidies paid to health insurance companies that the House GOP has been challenging in a federal lawsuit - and the loss of which could cause a mass insurer exodus from Obamacare.

One of the easiest ways for Republicans to hobble, perhaps fatally, the ACA would be for the Trump administration to simply stop paying these so-called "cost-sharing reduction" subsidies, which are given to insurers participating in Obamacare's individual health plan marketplaces in exchange for them reducing the out-of-pocket costs that must be paid by certain lower-income Americans.

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For instance, families earning up one and a half times the federal poverty level may have their deductibles reduced all the way to zero with the help of these subsidies. But they've been under attack by the House GOP for a while now. Republicans sued the Obama administration over these payments to insurers, alleging that they hadn't been appropriated by Congress. The House GOP actually won a suit in federal court; but that's mostly been on ice since the Trump administration took over and Republicans expected to pass their own Obamacare replacement.

Trumpcare's demise raised new questions what comes next for the ACA. President Donald Trump has repeatedly insisted that Obamacare will "explode" on its own, and that Democrats would come begging to deal with him on health care reform. And one simple way to make sure it does explode is to stop paying the cost-sharing subsidies, since doing so would be a massive financial hit to insurance companies (which would still be on the hook for reducing patients' out-of-pocket costs but would no longer receive the funds which help them do so), likely forcing them to abscond from Obamacare's marketplaces altogether.

Ryan's comments suggest that he doesn't support the Trump administration taking that route. And House Energy and Commerce Committee chairman Rep. Greg Walden also tried to assuage insurer and consumer concerns Thursday. "I will do everything I can to make sure the cost-sharing reduction payments get made, especially this year where they were promised by the federal government under the contracts," Walden said. "That’s an obligation not only to insurers but also to the people who took on those plans. We cannot leave them high and dry."

But in the meantime, the lawsuit isn't being dropped. And it's unclear exactly how it will be resolved now that, ironically, the Trump administration and HHS Secretary Tom Price are the defendants. "We don’t want to drop the lawsuit because we believe in the separation of powers," said Ryan. "We believe in Congress retaining its lawmaking power."

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