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A Key Republican Demands Subsidies to Calm Insurance Markets
Kevin Brady, chairman of the House Ways and Means Committee, second from left, at a hearing last month. He says Congress should immediately provide money for subsidy payments to health insurance companies. Credit Al Drago/The New York Times
WASHINGTON — A powerful House Republican said Thursday that Congress should immediately provide money for subsidy payments to health insurance companies, which have been demanding big rate increases or fleeing from Affordable Care Act markets because of President Trump’s threat to cut off the funds.
The Republican, Kevin Brady of Texas, who is the chairman of the House Ways and Means Committee, went out of his way to make clear that he now believes that Congress should continue the subsidies, which compensate insurers for reducing deductibles and other out-of-pocket costs for seven million low-income people.
The Trump administration has sent mixed signals on the issue, as the president seeks leverage to win legislation to repeal the Affordable Care Act. That has destabilized insurance markets and jeopardized a health law that Mr. Trump says is collapsing.
Mr. Trump has said he can stop the payments “anytime I want,” and his budget director, Mick Mulvaney, refers to the subsidies as “Obamacare bailout payments.”
But at a budget hearing on Thursday, Mr. Brady said the payments were needed “to help stabilize the insurance market and help lower premiums for Americans trapped in Obamacare.”
“We should act within our constitutional authority now to temporarily and legally fund cost-sharing reduction payments as we move away from Obamacare,” Mr. Brady said. “Insurers have made clear the lack of certainty is causing 2018 proposed premiums to rise significantly.”
His statement came one day after Senate Republicans said they were coalescing around a bill that would continue the cost-sharing subsidies, even as they tried to repeal much of the Affordable Care Act.
The Republican moves may be a response to political pressure: Democrats say Republicans will be responsible if the government cuts off the cost-sharing payments and premiums then skyrocket or markets collapse in some states.
The health and human services secretary, Tom Price, said the health insurance markets were deteriorating before President Trump took office. Credit Al Drago/The New York Times
The federal government spends $7 billion a year on the subsidies. The money goes directly to insurers, which are required to provide discounts to low-income people regardless of whether the companies are reimbursed by the government.
House Republican leaders had refused to provide money for the subsidies in their bill to repeal the Affordable Care Act, which was approved by the House last month. The White House balked at including the money in a sprawling spending bill to finance the government through September. And Mr. Trump has threatened to withhold the subsidies as a way to force Democrats to negotiate with him on a replacement for the 2010 health care law .
But Mr. Brady said the payments were needed to help consumers.
“Obamacare’s design flaws were not the fault of the American people,” Mr. Brady said. “The people now trapped in Obamacare did what the government mandated them to do — they complied with the law. They should not be left out to dry.”
House Republicans filed a lawsuit in 2014 asserting that the Obama administration was paying the subsidies illegally because Congress had never appropriated money for them, and a Federal District Court judge agreed last year. She ordered a halt to the payments, but suspended her order to allow the government to appeal. That appeal is still in progress, though it is unclear how far the Trump administration will take the fight.
At separate hearings of the House Ways and Means and Senate Finance Committees on Thursday, Tom Price, the secretary of health and human services, got a tongue-lashing from Democrats who said he and Mr. Trump were pursuing policies that could deprive millions of Americans of health care and coverage.
Representative Suzan DelBene, Democrat of Washington, said the administration was causing “chaos, confusion and instability in the market.”
In response to similar criticism from senators, Mr. Price said: “Nobody is interested in sabotaging the system. Nobody is cheering the challenges that we have in the system.”
The Trump administration cut back efforts to encourage enrollment in health plans under the Affordable Care Act, is loosening enforcement of the requirement for people to have coverage and has refused to say if it will continue paying the subsidies.
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Democratic senators, including Debbie Stabenow of Michigan and Thomas R. Carper of Delaware, asked Mr. Price why the administration was destabilizing insurance markets.
In response, Mr. Price said the markets were deteriorating before Mr. Trump took office. In Michigan, Delaware and many other states, he said, average premiums doubled in the past four years.
Mr. Price, a former congressman from Georgia, defended proposals in the president’s budget that would sharply reduce the growth of Medicaid .
Even Senator Johnny Isakson of Georgia, a Republican who once held Mr. Price’s House seat, expressed doubts about the proposed cutbacks. In Georgia, he said, Medicaid helps pay for more than half of all births, and of the 1.9 million people in the state’s Medicaid program, 1.3 million are children.
“We are talking, first and foremost, about children” who could be hurt if the program is cut, he said.
Under questioning by Democrats, Mr. Price stood by his statement last month that “there are no cuts to the Medicaid program” in the House bill to repeal the Affordable Care Act. The nonpartisan Congressional Budget Office said the bill would reduce projected federal spending on Medicaid by more than $800 billion over 10 years and reduce expected enrollment by 14 million people.
Still, Mr. Price said, federal spending on Medicaid would increase from year to year, just not as fast as under current law.
Senator Bob Casey, Democrat of Pennsylvania, told Mr. Price, “You have been deliberately misleading.”
The secretary said he “absolutely” disagreed with the budget office report. (As chairman of the House Budget Committee in 2015, Mr. Price helped select the director of the Congressional Budget Office, Keith Hall, who Mr. Price said at the time had a “vast understanding” of economic policy.)
A version of this article appears in print on June 9, 2017, on Page A13 of the New York edition with the headline: Health Subsidies Gain a G.O.P. Backer. Order Reprints | Today’s Paper | Subscribe