White House says it cannot lawfully pay ObamaCare subsidies to insurers

Donald Trump.
(Image credit: Mandel Ngan/AFP/Getty Images)

On Thursday night, the White House argued that it cannot lawfully make subsidy payments to insurers who rely on funding to reduce out-of-pocket costs for millions of low-income ObamaCare customers.

The White House said the Justice Department came to this conclusion after analyzing the cost-sharing payments and finding no congressional appropriation for them, and the Department of Health and Human Services said it will end the payments immediately. The subsidies are estimated to cost $7 billion this year, and under the law, insurers still must provide cheaper rates to members even if they no longer receive federal funding. Over the last several months, Trump has threatened to cut off the payments, which he called a "bailout" for insurance companies, and insurance companies have already raised prices in case he followed through. Still, the move is expected to significantly destabilize ObamaCare insurance markets.

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Catherine Garcia, The Week US

Catherine Garcia has worked as a senior writer at The Week since 2014. Her writing and reporting have appeared in Entertainment Weekly, The New York Times, Wirecutter, NBC News and "The Book of Jezebel," among others. She's a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.