![]() ![]() The lack of continuous funding for cost-sharing subsidies presented a problem for President Obama. Section 1402, however, authorizes a current appropriation, specifically saying the payments shall be made “at such time and in such amount as the Secretary of Health and Human Services specifies.” A current appropriation must be renewed every year. Section 1401 authorizes a permanent appropriation for the premiums, meaning Congress does not have to reauthorize them via annual appropriations. Premiums were reduced by tax credits authorized by the ACA’s section 1401 and out-of-pocket costs were reduced by section 1402’s cost-sharing subsidies.Īlthough they perform the same function of making healthcare costs cheaper for low-income persons, there is a critical difference between sections 14 that explains why the Trump administration cancelled the cost-sharing subsidies and left the premiums in place (which might cause the federal deficit to increase, according to the CBO). Two government spending programs were designed to lower health care premiums and out-of-pocket costs for low-income persons, respectively. It had a three-part structure to achieve its goal: obliging insurers to cover all people, requiring all people to buy insurance, and making insurance affordable. The subsidies were essential for the ACA to lower the uninsured rate. While courts usually rule in favor of Congress’s power, presidents have taken advantage of ambiguity in laws to spend unappropriated funds, which is what happened with the cost-sharing subsidies. MacCollom (1976), “the expenditure of public funds is proper only when authorized by Congress.” However, reality has always been more complicated, with the president sometimes spending unappropriated funds to carry out his executive duties. The case of the cost-sharing subsidies implicates a well-traversed area of constitutional authority: Who controls the spending powers of the federal government? Is it the president, who directs the Treasury, or Congress, which writes laws authorizing outlays from the Treasury? Article I of the Constitution seems to clearly put spending in Congress’s domain, saying, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law…” Indeed, plenty of intellectual energy has been expended affirming that, as the Supreme Court ruled in United States v. But according to a federal court ruling, the cost-sharing subsidies are not continuously funded by the ACA, meaning the Trump administration cannot make the payments without a specific appropriation from Congress. The ACA mandates that insurance companies reduce out-of-pocket costs, like copays and deductibles, for low-income enrollees on the ACA exchanges, and the subsidies fund those reductions. Over the last few weeks, the Trump administration has taken an important step in dismantling the Affordable Care Act by cancelling $7 billion in cost-sharing subsidies that the federal government had been paying to health insurance companies. ![]()
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