Donald Trump speaks in the White House after signing the executive order on Thursday © Getty
Donald Trump has taken major steps to unwind Obamacare in an effort to fulfil a campaign pledge that could result in healthcare insurance becoming out of reach for millions of poorer Americans.
Just hours after the US president signed an executive order that weakened core parts of the landmark 2010 healthcare law, the White House said the administration would no longer provide insurance companies with the subsidies that have helped them insure lower-income people under Obamacare. Top Democrats branded the move a “spiteful act” that would hurt working families.
Earlier on Thursday Mr Trump held a White House signing ceremony for the executive order, which marked his first effort to undo Obamacare after Congressional Republicans this year repeatedly failed to repeal the law they had castigated for seven years because of insurmountable differences between conservatives and moderates.
“I just keep hearing ‘repeal and replace, repeal and replace’,” Mr Trump said before signing the order. “Well, we’re starting that process, and we’re starting it in a very positive manner.”
During the presidential race Mr Trump slammed the Democrats for passing the Obama-era law but his ire has since shifted to the top Republicans in Congress, whom he blames for the fact that his administration has yet to pass a single piece of major legislation after nine months in power, even though the Republican party enjoys majorities in both houses of Congress and controls the White House.
But the White House refocused its criticism on the Democrats on Thursday, as Mr Trump implemented measures that could severely undermine the already beleaguered insurance marketplaces that were created across the US after the passage of Obamacare, known officially as the Affordable Care Act.
Republicans are fiercely critical of Obamacare, partly because it raised premiums for some people who already had insurance. But cancelling the subsidies threatens to result in higher costs for many newly insured people under Obamacare.
The subsidies are a crucial building block of Obamacare since they offset the costs insurers incur serving low-income customers. They got less attention than separate consumer subsidies, which remain in place, but have been equally important in securing coverage for about 20m previously uninsured Americans. But they have long been reviled by conservative Republicans who have attacked them as “bailouts” for the insurance companies — a line Mr Trump has appropriated in recent months.
“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,” Sarah Huckabee Sanders, White House press secretary, said late on Thursday evening. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
During the Obama era, House Republicans launched a lawsuit to stop the subsidies being paid, arguing that Congress had never approved the use of government funds for that purpose. But moderate party members have been nervous about pulling the payments.
“Cutting healthcare subsidies will mean more uninsured in my district,” Ileana Ros-Lehtinen, a Republican House member, tweeted after Mr Trump’s move on Thursday evening. “@potus promised more access, affordable coverage. This does opposite.”
Over the past year, several insurers have quit Obamacare markets because they are unprofitable. And in recent months, uncertainty over the future of health policy has compounded corporate skittishness. The latest move will make it even harder for insurers to make money across large swaths of the country.
Paul Ryan, the Republican House speaker who has been a target of Mr Trump, welcomed the move. “Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with Trump administration to provide the American people a better system,” the Wisconsin lawmaker said.
But the decision was slammed by Nancy Pelosi and Chuck Schumer, the top Democrats in the House and Senate, who accused Mr Trump of making it harder for poorer people to buy health insurance.
“Instead of working to lower health costs for Americans, it seems President Trump will single-handedly hike Americans’ health premiums,” they said in a joint statement. “It is a spiteful act of vast, pointless sabotage levelled at working families and the middle class in every corner of America. Make no mistake about it, Trump will try to blame the Affordable Care Act but this will fall on his back and he will pay the price for it.”
Follow Demetri Sevastopulo on Twitter: @dimi