Congress Stalls: Trump Administration Takes Command of Healthcare Reform

    View Authors October 2017
    The purpose of the Cost-Sharing Reduction (CSR) subsidies authorized by P.L. 111-148, the Patient Protection and Affordable Care Act (ACA), is to decrease out-of-pocket maximums and lower the amounts that qualified individuals pay for deductibles, copayments and coinsurance for marketplace enrollees with incomes below 250% of the poverty level. In 2014, the House of Representatives sued the Obama Administration on funding by the administration of the CSR payments, as Congress did not provide an explicit funding mechanism, called an appropriation. Former US House of Representatives Speaker John Boehner, who is now a senior strategic advisor at our firm, led the charge to file this lawsuit. Additionally, Congressman Jack Kingston, who is now a principal at our firm, played an integral role in questioning the constitutionality of the CSR payments as Chair of the House Appropriations Subcommittee on Labor, Health, and Human Services, and Education (LHHS).

    On May 12, 2016, the federal district court for the District of Columbia ruled that the Obama Administration could not constitutionally reimburse health insurers for the CSR subsidies. Although the CSR program is authorized by Congress, members of Congress opted not to appropriate funds for this specific purpose. The decision reinforced the long-standing position that no federal agency may use public monies from the Treasury unless Congress has made the funds available through appropriations as provided in the US Constitution.

    On October 12, 2017, after its review and acknowledgement of the May 2016 court ruling, the Trump Administration declared that it would immediately cease making CSR payments to health insurers. President Trump’s adherence to the court’s decision to halt CSR payments could result in additional negotiations between Congress and the White House to negotiate a short-term or long-term bill related to healthcare reform. On October 12, President Trump signed an Executive Order (EO) to reform the US healthcare system. Specifically, the order makes changes to Association Health Plans (AHPs), expands coverage through low-cost, short-term limited duration insurance (STLDI) and expands the use of employer-funded Health Reimbursements Arrangements (HRAs) accounts.

    The recent changes by the Trump Administration could shift the political discussion surrounding healthcare reform, including the possibility for a short-term agreement on changes to the ACA. The true impacts of the EO will emerge as relevant departments issue rules and regulations pertaining to its implementation.

    We recognize these changes may affect our clients from a legal or policy prospective. Our Public Policy Healthcare group works closely with our lawyers to help clients understand and address issues. Please feel free to reach out to any of these contacts or your firm lawyer with questions.