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UPDATE 1-Trump nails Obamacare with decision to cut off billions in subsidies

From Reuters - October 12, 2017

WASHINGTON (Reuters) - U.S. President Donald Trump moved to undermine Obamacare dramatically late on Thursday by cutting off subsidies to health insurance companies for low-income patients, sparking threats of legal action and concern of chaos in insurance markets.

The decision is the most dramatic action Trump has taken yet to weaken the Affordable Care Act, President Barack Obamas signature healthcare law, which extended insurance to 20 million Americans.

The move drew swift condemnation from Democrats and threats from state attorneys general in New York and California to filelawsuits.

Trump has been frustrated by Republicans failure to repeal and replace the law known as Obamacare, thwarting a promise he made during his successful 2016 presidential campaign.

His decision is likely to please those among his political base who detest the Obamacare system, which many Republicans have attacked for years as an unneeded government intrusion in Americans healthcare.

In a nod to that same constituency, the president signed an executive order earlier on Thursday to make it easier for Americans to buy bare-bones health insurance plans exempt from Obamacare requirements.

Senate Democratic Leader Chuck Schumer and House Democratic Leader Nancy Pelosi derided the subsidies cut-off in a joint statement, saying Trump would single-handedly push Americans healthcare premiums higher.

It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America, they said. 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.

Insurers and proponents of Obamacare have implored Trump for months to commit to making the payments, which are worth billions of dollars. Several insurers have cited uncertainty over the payments when hiking premiums for 2018 or exiting insurance markets altogether.

Healthcare stocks have edged lower in recent days. Ending the payments could hurt shares of insurers such as Anthem Inc, Molina, Cigna Corp and Centene, which are offering plans on Obamacare markets for 2018.

Trump has made the payments, guaranteed to insurers under Obamacare to help lower out-of-pocket medical expenses for low-income consumers, each month since taking office in January. But he has repeatedly threatened to cut them off and disparaged them as a bailout for insurance companies.

LAWSUITS

The White House said late on Thursday that it could not lawfully pay the subsidies anymore.

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