SIOUX CITY | Tri-state Republican members of Congress voiced support Friday for President Donald Trump's decision to end costing sharing subsidies for Affordable Care Act policies.
The controversy over the cost-sharing subsidies has simmered in Washington, D.C., for months. Republicans claimed they aren't legal, while Democrats defended them and said killing off the funding would hurt people.
Trump's decision to immediately halt the payments to insurers came after the GOP president signed an executive order calling for new regulations to encourage cheap, loosely regulated health plans. The move delivered a double body blow to Obamacare after months of failed GOP attempts to repeal the 2010 law.
"The Democrats ObamaCare is imploding," Trump said in an early Friday morning tweet. "Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!"
Iowa 4th District Rep. Steve King heartily endorsed Trump's action.
"President Trump’s moves, allowing association health plans to be sold across state lines and ending illegal subsidies to big insurance companies, will improve American health care by increasing competitive market forces. I support the President’s actions," King, a Kiron Republican, said in a statement to the Journal.
U.S. Rep. Kristi Noem, R-S.D., said she supports Trump's move as part of an overall effort to repeal Obamacare.
“Obamacare created a broken system, propped up by government bailouts and ever-increasing burdens on hardworking families. Ultimately, I believe the right decision is to repeal Obamacare and replace it with a system that makes health care more accessible and affordable in this country, which is what I voted to do when the House passed health care reform legislation earlier this year," Noem said in a statement.
In eastern Iowa, Democratic U.S. Rep. Dave Loebsack, a Sioux City native, said the administration’s actions would mean working families will pay more.
“It is time that we come together to fix healthcare, not throw a wrench into the system and harm those who can least afford it,” Loebsack said.
The White House said the federal government cannot legally continue to pay the cost-sharing subsidies because they lack a formal authorization by Congress. The administration had recently been making the payments from month to month.
Under the ACA, cost-sharing reductions are federal payments made to insurers that help eligible consumers afford their deductibles and other out-of-pocket expenses.
The costs of these payments were at $7 billion in fiscal year 2017 and could hit $10 billion in 2018 and $16 billion by 2027, according to estimates by the Congressional Budget Office.
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Halting the payments would trigger a spike in premiums for moderate income people for next year, unless the president reverses course or Congress authorizes the money. The next payments are due near Oct. 20. The sign-up season for subsidized private insurance starts Nov. 1.
In Iowa, about 25,000 people of moderate means qualify for them. The payments also makes coverage more affordable for about 30,000 Nebraskans and 16,000 South Dakotans.
People who qualify for premium tax credits (meaning those who make up for four times the poverty level), will be sheltered from the increased premiums because the value of the tax credits will rise as premiums do. However, for those who don't qualify for the credits, or who don't buy their insurance on the exchanges, prices will go higher.
Big price spikes and insurers dropping out of Iowa's individual insurance market already prompted Iowa's insurance division to ask the Trump administration earlier this year to approve a "stopgap" plan" it devised as insurers were dropping out of the marketplace. Since, regulators have been citing higher prices to push for the plan's approval.
"Basically anyone paying full freight of their premium (above 400 percent FPL) will be priced out of the market," Chance McElhaney, a spokesman for the Iowa Insurance Division, said Friday.
The state's plan would revamp the Affordable Care Act in the state, creating a single standardized plan, a new system for premium tax credits and a reinsurance pool for high cost customers.
The Trump administration still hasn't made a decision on the request. And McElhaney said the administration's decision Thursday to end federal funding for cost-sharing subsidies won't affect the proposal because the state isn't count on that funding stream to pay for the plan.
In August, Minnesota-based Medica announced that it was proposing to raise the average premium on its silver insurance plan in the marketplace by 56.7 percent, about 13 percentage points higher than it previously planned.
At the time, the company said the bigger boost in prices was due to the uncertainty over the future of cost-sharing funds.
King said Trump's action will hopefully increase the likelihood of a repeal of the ACA.
"No Democrat will put up even one vote to repeal, replace, or constructively fix ObamaCare...I do think Trump is creating leverage so that the Senate, then the House will have to act. I'm ready now," King said.
-- Ed Tibbetts of the Quad-City Times and Chelsea Keenan of the Cedar Rapids Gazette contributed to this story.