In summary

The Trump administration will cut off health care subsidies to insurers that help cut health care costs for low-income Americans, the White House announced yesterday. California Attorney General Xavier Becerra responded promptly, threatening to sue the administration to protect the health subsidies.

The Trump administration will cut off health care subsidies to insurers that help cut health care costs for low-income Americans, the White House announced  yesterday.

California Attorney General Xavier Becerra immediately threatened to sue the administration to protect the health subsidies.

Health care experts say not issuing the assistance to cover health care costs for the neediest could derail the health insurance exchanges and will push up the price of premiums and cause some insurers to leave the marketplace.

In a statement, the administration said it “cannot lawfully” make the payments anymore. Nationwide, those payments are estimated to be worth about $7 billion this year, about $800 million of which is earmarked for California. Former President Barack Obama began the subsidy payments, despite the lack of approval by Congress.

“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” a White House statement read. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

The subsidies help individuals and families that earn between 100 and 250 percent of the federal poverty level buy health insurance on the exchanges.

Covered California, the state-run insurance exchange, announced its new pricing Wednesday and planned for the possible cuts Trump announced a day later. The program added a surcharge to the price of Silver-tier plans to make up for any potential loss of the assistance from the federal government, Covered California said. As a result, the state projects that premiums for four of five consumers will remain the same or decrease, including those who do not qualify for subsidies and those who buy directly from health insurers.

As of March, there were 1.2 million Californians receiving subsidies through the Affordable Care Act, also known as Obamacare.

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Elizabeth Aguilera

Elizabeth Aguilera is an award-winning multimedia journalist who covers health and social services for CalMatters. She joined CalMatters in 2016 from Southern California Public Radio/KPCC 89.3 where she...