Trump ponies up August cost-sharing payments for Obamacare

Fear that the Trump administration would make good on the presidents threats to stop payments to insurers for Obamacare has subsided, for now, after a spokesman said all August payments would be made.

The payments go to insurers to cover subsidies and out-of-pocket expenses for people enrolled in medical insurance through the Affordable Care Act.

It is estimated that the federal government will pay about $7 billion in 2017 and cover about 6 million people enrolled in the program. The funds go toward compensating insurers for providing insurance to low and moderate-income Americans and providing discounts that include co-payments and deductibles as mandated by the act. By the end of last year, 1.4 million Californians were enrolled in private insurance through Covered California, the state’s exchange that administers the Affordable Care Act.  Of those, nearly 89 percent receive federal subsidies.

The announcement is expected to help bring some stability to the markets, but experts note that the long-term prognosis is still up in the air. It’s unclear if the administration will enforce the requirement that all Americans purchase health insurance or face a fine.

According to the Congressional Budget Office, health care insurance premiums for many Americans using Obamacare would increase 20 percent if President Trump cuts off insurer payments. Last month Trump tweeted: “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”

Critics of administration’s approach say Trump must commit to the program.

“This cat-and-mouse game every month has to stop,” Leslie Dach, director of the Obamacare advocacy group Protect Our Care Campaign, told CNBC. “As the nonpartisan CBO and Kaiser Family Foundation concluded in recent reports, just the threat of not making these payments has caused insurers to jack up prices next year and has injected uncertainty into the market for consumers and insurers alike.”

After the announcement that this month’s subsidies will be paid, Tennessee Republican Sen. Lamar Alexander said Congress should act to ensure that the funds will be paid through next year.