Hours after he signed an executive order that set up association health insurance plans that could be bought across state lines, President Trump signaled that he intends to end Obamacare subsidies to insurance companies, according to Politico. Two reasons exist for the decision. First, the subsidies, while authorized under the affordable care act, were never appropriated by Congress and therefore are illegal. The second and perhaps more important reason was to put pressure on Washington lawmakers to repeal and replace Obamacare altogether. Members Of Congress of both parties are not pleased.

The subsidy served to tamp down on premiums

The $7 billion a year subsidy helped to tamp down on premiums for the Obamacare plans, thus making them more affordable. By all accounts, the payouts were not working that well, since increases in premiums have tended to be in double digits year after year in many of the state markets. Nevertheless, it could be argued that things would have been worse without the subsidies.

Congress reacts with fury and consternation

Democratic members of Congress responded with anger, understandably. The decision to cut off the subsidies, though required by law and a strict adherence to the Constitution, will tend to undermine the Obamacare markets and accelerate their death spiral.

Democrats are already accusing the president of deliberately sabotaging the Affordable Care Act.

Even some Republicans are nervous. They fear that if too many of their constituents are priced out of their Obamacare health insurance policies, that they will suffer at the polls.

What happens now?

What happens going forward largely depends on the Congress.

Lawmakers could vote to appropriate the subsidy money formally. However, Trump and congressional Republicans are likely to extract a price for doing so, which will be, in effect, a Repeal and Replace measure, though it may not be called that.

What President Trump has done with his executive order and now the decision to cut off insurance subsidies is political hardball at its finest.

Congress has thus far defied him where it comes to ending Obamacare. He has served notice that the Affordable Care Act is going away anyway. It was bound to nevertheless because the structure that depended on young, healthy people to subsidize the old and the sick in health insurance plans with strictly defined benefits is not working in the real world.

Of course, litigation is likely to ensue. Democrats, when they fail to get what they want in the legislative realm, always run to the courts. The matter may go all the way to the Supreme Court before all is said and done. In the meantime, health insurance markets are still in turmoil and the simple act of going to see the doctor has become complicated and problematic.
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