U.S. President Donald Trump defended his administration's decision to cut off premium support subsidies in the Affordable Care Act early Friday and challenged Democratic lawmakers to return to the negotiating table as the two sides continue to spar over healthcare and tax reform.
Trump said late Thursday that the government would stop paying so-called 'cost-sharing reduction subsidies', or payments to insurance companies that help lower-income families with co-pays and healthcare costs. The White House said the payments, a key plank of the Obamacare program, were an "unlawful bailout of insurance companies" and "yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system."
"The Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare," the White House said in a statement late Thursday. "In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments."
The move threatens to reignite partisan political tensions between Republican and Democratic lawmakers just as the President attempts to broker a deal between the two factions on his signature tax reform plans.
"Instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans' health premiums. It is a spiteful act of vast, pointless sabotage," Democrats said in statement.
Republican House Speaker Paul Ryan, however, hit back, saying in a statement that "Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with the Trump administration to provide the American people a better system."
Cessation of the payments will likely cost insurers around $10 billion next year, according to the Congressional Budget Office, and are estimated to have totalled $7 billion this year.
Stocks which could be immediately impacted by the changes, which will begin next week, include Anthem Inc (ANTM) - Get Report , Molina Healthcare Inc (MOH) - Get Report , Cigna Corporation (CI) - Get Report and Centene Corp. (CNC) - Get Report