Trump’s abrupt termination of cost-sharing reductions

Trump Administration Takes Action to Abide by the Law and Constitution, Discontinue CSR Payments

U.S. Department of Health & Human Services, October 12, 2017

U.S. Health and Human Services Acting Secretary Eric Hargan and Centers for Medicare & Medicaid Services Administrator Seema Verma released the following statement announcing that cost-sharing reductions payments will be discontinued immediately based on a legal opinion from the Attorney General:

“It has been clear for many years that Obamacare is bad policy.  It is also bad law. The Obama Administration unfortunately went ahead and made CSR payments to insurance companies after requesting - but never ultimately receiving - an appropriation from Congress as required by law.  In 2014, the House of Representatives was forced to sue the previous Administration to stop this unconstitutional executive action. In 2016, a federal court ruled that the Administration had circumvented the appropriations process, and was unlawfully using unappropriated money to fund reimbursements due to insurers.  After a thorough legal review by HHS, Treasury, OMB, and an opinion from the Attorney General, we believe that the last Administration overstepped the legal boundaries drawn by our Constitution.  Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”

HHS Memo with opinion of Attorney General Jefferson B. Sessions III:

CBO: The Effects of Terminating Payments for Cost-Sharing Reductions:

NYT: 12 ways Trump is scaling back Obamacare:


Executive Order: Promoting Healthcare Choice and Competition Across the United States

The White House, October 12, 2017

Among the myriad areas where current regulations limit choice and competition, my Administration will prioritize three areas for improvement in the near term: association health plans (AHPs), short-term, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs).



By Don McCanne, M.D.

In order to make health care more affordable for lower-income individuals, the Affordable Care Act required that credits (cost-sharing reductions or CSR) be paid to the insurers to cover a portion of the cost sharing. Republicans chose to block these payments by refusing to appropriate the funds required, forcing the Obama administration to use an alternative source of funds - a move which is now under legal challenge (use link above to see Attorney General Sessions’ opinion).

The Trump administration has now ordered the immediate termination of the CSR payments.

The Congressional Budget Office has previously provided an analysis of the consequences of terminating the CSR payments (see link above). There are too many variables to predict with certainty what will happen, but the action at least is likely to be disruptive to the silver plans offered in the exchanges (the silver plans being the ones that quality for the CSR payments).

Also yesterday President Trump issued an Executive Order instructing agencies to modify regulations for association health plans (AHPs), short-term, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs). Again, because of variables in implementation of this executive order, the impact is uncertain, but it is likely to be quite negative.

The New York Times has listed other ways in which Trump’s administration is scaling back the Affordable Care Act (see link above). All of these measures together will certainly increase the number of uninsured, reduce health care benefits covered by the innovative plans, while increasing exposure to financial risk. Too many patients will end up sicker and poorer.

At a time when there is a surge of interest in single payer reform - an improved Medicare for all - the pushback against the Trump chicanery could expedite the political processes required to advance health care justice to all. We should be sure that the nation understands that there is a much better way out, but also that they will have to demand that change.

Stay informed! Visit to sign up for daily email updates.