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Trump Ends Health Subsidies for Poor People. Aired 7-7:30a ET
Aired October 13, 2017 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
UNIDENTIFIED MALE: This squeezing of the insurance market is going to cause them a world of political hurt.
[07:00:07] JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: The president has -- is deep in thought about Iran.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: This is the worst deal. We got nothing.
UNIDENTIFIED MALE: I have to question whether the president has read the agreement or understands what's in it.
UNIDENTIFIED MALE: He said first responders and members of the military will not stay there forever.
UNIDENTIFIED MALE: Every day is a survival mode for most people.
CARMEN YULIN CRUZ, MAYOR OF SAN JUAN, PUERTO RICO: This isn't politics. This is about saving lives.
ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.
CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY. We have a lot of breaking news that came down overnight.
President Trump says he is going to immediately stop paying billions in subsidies that help millions of lower-income Americans afford health care coverage. So to help a few, he is going to hurt millions of lower-income voters, many of whom voted for him.
The latest move comes hours after the president signed an executive order allowing alternative health plans that skirt the law's requirements.
ALISYN CAMEROTA, CNN ANCHOR: And then there's another big decision coming from the White House this morning. In just hours, President Trump will announce a new strategy towards Iran. The president will not certify that Iran is complying with the nuclear deal but he will stop short of pulling out of that agreement, leaving Congress with the major decision.
So he have it all covered for you. Let's begin with CNN's Joe Johns. He is live for us at the White House. Give us the latest, Joe.
JOE JOHNS, CNN CORRESPONDENT: Good morning, Alisyn.
A tweet from the president before 6 a.m. this morning. A very good example of the president of the United States trying to frame the national conversation on an issue at the very start of the day.
Here's the tweet: "The Democrats' Obamacare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!"
But make no mistake,: over the last 24 hours, it is the president who has gone a long way toward putting his imprint on government-regulated health insurance, and he's done it without an act of Congress.
JOHNS (voice-over): President Trump upending the health care markets, scrapping critical subsidy payments to insurers that help nearly 6 million lower-income Americans pay for health care. The payments, which will cost the federal government about $7 billion this year, set to end immediately. Without the subsidies, the Congressional Budget Office estimates that exchange premiums will rise 20 percent next year and increase the national deficit by $194 billion over 10 years. The move could force many insurers to flee the marketplace entirely.
TRUMP: We pay hundreds of millions of dollars a month in subsidies that the courts don't even want us to pay. And when those payments stop, it stops immediately.
JOHNS: President Trump has threatened to end the subsidies for months, but lawmakers in both parties have urged the administration to continue the payments in the short term to stabilize the markets.
The White House declaring Thursday that the government cannot lawfully make the cost-sharing reduction payments. Democratic leadership blasting the decision as "a spiteful act of vast, pointless sabotage leveled at working families and the middle class" before insisting that President Trump will pay a price for this decision.
House Speaker Paul Ryan applauding the move, while Republican Congresswoman Ileana Ros-Lehtinen tweeted, "Cutting health care subsidies will mean more uninsured in my district. POTUS promised more access, affordable coverage. This does opposite."
It comes hours after the president signed an executive order, allowing people to provide cheaper, more basic plans, something experts say will drive up the cost of premiums for sicker patients.
TRUMP: This will cost the United States government virtually nothing, and people will have great, great health care.
JOHNS: President Trump legislating through executive order despite repeatedly attacking his predecessor for doing the same.
TRUMP (via phone): You have a president that signs executive orders because he can't get anything done.
(on camera): Right now, Obama goes around signing executive orders. He can't get along with the Democrats.
JOHNS: These significant decisions coming ahead of another consequential announcement this afternoon.
TRUMP: That deal is an embarrassment to the United States.
JOHNS: President Trump set to announce he will decertify Iran's compliance with the nuclear agreement, a move that kicks the issue to Congress but stops short of withdrawing from the agreement entirely.
Lawmakers would then have 60 days to decide on whether to reinstate economic sanctions lifted under the agreement.
JOHNS: The administration is not expected to push for new sanctions against Iran, because, in all likelihood, that would cause Iran to walk away from the deal. Instead, the administration is likely to push for parameters triggering sanctions.
[07:05:05] They're also expected to lay out a plan for a tougher approach to Iran's ballistic missile program, as well as its support for terror networks -- Chris.
CUOMO: All right. Joe, we're going to cover all of this, but we're going to start with health care.
Oh, the hypocrisy. To hear Paul Ryan, the speaker of the House, and these Republicans applauding an executive order that subverts an act of Congress. What a difference an election makes.
CNN's chief business correspondent, Christine Romans, is here to break it down for us. The suggestion is that this executive order will make it easier to get cheaper health care, and more people will benefit. What's the reality?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Well, the reality here is that ending key subsidies will speed up Obamacare's implosion and cost millions of Americans health coverage, Chris.
Who are we talking about here? Nearly 6 million low-income Americans, individuals who earn less than $30,000 a year and families earning less than 61 grand. Insurers rely on these cost-share subsidies to help pay for their lower deductibles. It does not affect premiums, but it makes a huge difference for these enrollees right here.
For traditional, take a traditional silver plan. For those just above the poverty line, the subsidy lowers the average deductible to $255 a year. Without it, it's $3,600. That's why these Americans could see huge increases next year.
Now, the president -- the president has threatened to stop payments for months. And that's caused many insurers already to hike their rates next year. Most insurers hiking their rates by more than 20 percent. Some major players have even dropped out of the market entirely. But insurers that didn't price in the loss of these subsidies, you
guys, they can sue or they can raise rates. And that is a new problem for Obamacare, less than three weeks -- three weeks to go before open enrollment -- Alisyn and Chris.
CUOMO: The enrollment period that they're going to cut short with this executive order.
CUOMO: And why would you do that? You'd do that to discourage people from signing up for health care, further likening the chance that the entire system goes down.
CAMEROTA: Christine, thank you very much for bringing us that.
CUOMO: All right. Let's discuss. We've got the panel with us. CNN senior political analyst, Ron Brownstein, reporter and editor at large of CNN Politics, Chris Cillizza, and chief Washington correspondent for Kaiser Health News, Julie Rovner.
Professor Brownstein, where do you want to start? Do you want to start with the political hypocrisy at play or the policy implications for a lot of Trump voters? What do you want? I'll give you a choice.
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: I think the -- I think the policy implications are, you know, critical. This is a part of a series of actions designed explicitly to destabilize the exchange portion of Obamacare.
Medicaid is still out of their reach and proved surprisingly difficult. But as you point out, as Christine pointed out, you add up everything that is being done in terms of reducing the amount of money that is spent on outreach, in terms of closing the website regularly for, quote, maintenance during the open enrollment period; pulling back on the cost-sharing payments; the executive order, which is the beginning of a process that would allow for more disaggregation, would allow insurers to essentially segment off more healthy people at the cost of raising prices for older people with greater health needs. All of these have the same combined effect.
And as you noted, the perverse element of this from the beginning has been that the biggest losers in the -- in this overall direction, as in the Republican House and Senate health care bills, have been older, working age adults. Two-thirds of everybody in the country 45 to 64, is white. And most of them have voted Republican. Most of them voted for Donald Trump.
This is a dagger aimed directly at their own constituency. It showed up in the polls in his decline among working-class white voters in his approval. And I think it has precipitated, in turn, some of the harsh, sharp, cultural confrontation which the White House believes is their way to reel back some of the voters they're losing on these economic issues.
CAMEROTA: So Julie, but explain how this works politically. We understand this was a campaign promise that President Trump made that he would dismantle Obamacare. But to start with the poorest people, the people who get those subsidies, how does that make sense?
JULIE ROVNER, CHIEF WASHINGTON CORRESPONDENT, KAISER HEALTH NEWS: Well, ironically, it's not really those people who will be affected. The law requires that these discounts be provided to these lower income people. What the president has done is said, "We're not going to pay you back, insurance companies."
So the insurance companies will, in turn, raise rates. Well, the premium subsidies will protect most of the lower and middle-income people.
Who really gets hit? It's the people who don't get premium subsidies, the people who earn more than 400 percent of poverty, who are in the individual market. There's about roughly seven million of those people. Those are wealthier people. They are primarily Republicans.
So really, this ends up redoubting to the -- you know, to the Republicans, to Republican voters, who will now be asked to pay more. Most of the people who are in the exchanges will be protected, one way or the other. And when the president says the government won't pay more, that is certainly not the view of the Congressional Budget Office that the premium subsidies will go up because the premiums would go up.
[07:10:08] And the other thing that would happen is that these insurance companies would be likely to sue, and they'd be likely to win, because the federal government, whether or not it actually officially made this appropriation under the law, owes them that money back.
CUOMO: So Chris Cillizza, what's the political play here? Is the president just hoping that people won't figure out that they got hurt by the move, and he gets to wave a price tag of money saved?
CHRIS CILLIZZA, CNN POLITICS CORRESPONDENT AND EDITOR AT LARGE: Yes and no. I think some of it, Chris, honestly, is simple. WE can overthink these things. I think it's promise made, promise kept. You didn't like Obama. This bill has his name on it. We're getting rid of it. I mean, it may not be all that much more complicated.
To be honest, Julie Rovner understands the health care system and its implications better than 99.999 percent of America. Or that most people will understand it.
What they will see is Donald Trump said he was going to get rid of Obamacare. The Senate, including Republicans, couldn't do it. And Donald Trump is doing it. Obviously, that's a massive oversimplification and misses the fact that it will hurt many of the people who have voted for him.
But this will not be the first time people vote against their economic and other interests. It has happened many times before. He may well get the votes of these people anyway. BROWNSTEIN: Chris, I'm going to disagree a little bit. I think that,
you know, health care is a very personal issue. And we saw during the ACA debate voters paying an unusual amount of attention to the debate. And a significant decline in Trump's approval during the course of debate among the two groups that would have been mostly adversely affected, blue-collar whites and older working-age adults.
And Chris is right: there are very few one-issue voters in the country. But -- and other issues may pull them back to Trump. But I think that the idea of undermining a health care system that has proved more popular and more sturdy, and even with roots among Republican governors, is going to be more problematic than you're suggesting, Chris.
Because people -- this is something they get. This is not as abstract. It's not as distant. Taxes can seem theoretical to many Americans. But health care is something that they live with. They understand that it affects them and their family and often their parents, for people in that older age group not only facing higher premiums but questions about Medicaid and its availability to caregivers.
So I think they are playing with fire.
Now in their defense, what they're maybe arguing is that we're giving ourselves more leverage to make a deal. That's what they said on DACA, the program for young undocumented immigrants. We'll see if, in fact, they can put conditions on this that allow for a deal to be made.
CILLIZZA: Just quickly, I'm with Ron on the impact of health care. Because it impacts you day in, day out, touches most people in a real way. 2010 election, 2014 election, 100 percent -- not 100, 95 percent dictated by health care. No question about that; it's why Republicans won.
The only thing I'll say is I do think that Donald Trump's ability to maintain his base -- Ron is -- no one knows the numbers better than Ron. I'm not going to dispute that. That has eroded a little bit. But these people have stuck with him through a lot of things I personally didn't think that they would. Whether that be the things he said about women, whether that's been some of the policies he's laid out.
I just don't know if this is a breaking point even if it does hit them. I'm not saying it isn't. It may well be. But I'm just -- I'm always skeptical that the Trump base will leave Trump, because he does things every once in a while, sometimes more than once in a while that you would think would occasion that leaving, or at least an alienation. And you don't see it. You don't even see -- not his base, Republican elected officials, running away from it.
CAMEROTA: Yes, but I mean, Julie, as Julie points out, he's -- he's billing this, what he's doing, as stopping a bailout to insurance companies. They can get their arms around that. This is not hitting the lowest income folks. This is stopping the bailout that the insurance companies were getting.
But, Julie, you know, look, the president hated executive orders, as you may remember when President Obama was in office. He railed that. We have a montage of him saying how many times he hated it.
Now, as of -- if you look at both these nine months in office, he has doubled President Obama's executive orders. And is this because the GOP and Congress weren't willing to do these things, like get rid of these subsidies, that he had to use his own pen?
ROVNER: Clearly. The GOP in Congress would like to put the subsidies back, and they could potentially do that.
But what I think he's done here, two things. With the executive order yesterday, which doesn't actually change anything. It will take months for any of that to happen. And the announcement about the subsidies, is he's trying to blow up the individual market. And he may well succeed in doing that.
Whereas you pointed out three weeks away from open enrollment. The open enrollment is only six weeks long. There's roughly 17 million people who buy their own insurance.
[07:15:03] What could happen is that insurance companies could just leave. That could hurt everybody. So I think what he's trying to do is create as much chaos as he can in hopes of driving Republicans and Democrats to the table. Very unclear whether that's going to work and who might be hurt in the meantime.
CUOMO: And hear what Julie has said out there. If you're someone who's not low-, who says, "Well, this isn't about me. I'm going to be able to get a cheaper plan for me," these insurance companies are going to make their money. If they can't make them on the low-income people because of what the law says right now, regardless of the subsidies, they're going to make it on you. It's going to happen. We're going to hear about it. We're going to report it.
Gentlemen, Julie, thank you very much.
So does hypocrisy on executive orders, what Alisyn was just talking about, does it really matter anymore? We're going to ask a member of the House Freedom Caucus next.
CUOMO: The president is up and apparently watching the shows and tweeting about his decision to halt health care subsidies for poor people. It reads, "Obamacare is a broken mess. Piece by piece, we will now begin the process of giving America the great health care it deserves."
[07:20:07] One thing is for sure: piece by piece, this executive order is furthering the implosion of the individual and other markets.
Let's discuss the move by the president, its implications and what happens next. We have Republican Congressman Jim Jordan of Ohio. Always a pleasure to have you on the show. Thanks for being with us,
REP. JIM JORDAN (R), OHIO: You bet. Good to be with you.
CUOMO: What's your take on what the president did and how he did it?
JORDAN: Well, he's right with his statement he put out; it's a mess. Everyone knows that's the case, why we were elected in '10, '14 and '16. And we'd be in a lot better position if had just went ahead and repealed this thing. Unfortunately, that didn't get through the United States Senate.
So I agree with the president's statement. Let's get after this. Let's -- let's repeal Obamacare. Let's get that done, and let's put in place a better health care system like the American people deserve.
CUOMO: Jim, why aren't you saying that the president is acting like an emperor and that his job is to execute laws that are passed, not write his own and Congress must hold him into account for doing so?
JORDAN: Chris, you know, not with these CSR payments. The courts have said -- just like with DACA, this president said, "I'm not going to continue an activity that the courts have said is unconstitutional."
CUOMO: One court, the district court. It is on appeal. The parties have held the litigation in abeyance.
JORDAN: One court?
CUOMO: It's not decided.
JORDAN: So there's been one arbiter in the judicial system decide on this, and they said it is unconstitutional because this money wasn't appropriated. He is saying he's not going to engage in activities that the courts have said are not constitutional, just like with the DACA immigration issue, just like with the CSR payments.
CUOMO: Just to be fair, he did the opposite. Just to be fair, he did the opposite. When he didn't like the ruling, he said, "I'm not going to follow it. The courts are wrong about this."
CUOMO: So it's not like he's just respecting the rule of law.
But I'm asking you about -- you have been so outspoken, and I'm not criticizing it, about executive orders. You know, you said the American people, people have spoken loudly during the midterms. They want a legislative fix to problems.
CUOMO: Those were your words.
CUOMO: You said President Obama can't be an emperor. He has to execute laws, not write his own. That's exactly what this president is doing. Why isn't your criticism the same?
JORDAN: That's why -- that's why we passed out of the House a bill that would have improved the health care situation, a bill that would have repealed most of Obamacare, a bill that would have replaced it.
CUOMO: But it would have been a law.
JORDAN: I know. And that's a problem. It underscores why we have to get back to doing it and actually repeal this law. That's -- that should be the focus.
But again, these CSR payments are, in fact, illegal. The president said he is no longer going to engage in making these payments. So let's move forward and do what we should have done a long time ago, what we in the House actually got passed. Let's move forward on that.
CUOMO: The litigation is not complete. You are right. A district court did hold that. The appeal is on hold, because the parties have held it in abeyance.
JORDAN: It was never appropriated, Chris. It is not constitutional.
CUOMO: I get that that's your opinion. And I'm just saying that the litigation...
JORDAN: It is the court's opinion.
CUOMO: ... isn't over. One court's opinion. But again, the appeal -- appeal is on hold. It could be -- wind up in a different place, or you could be right. But I'm asking you about something else, and you're not giving me a full-throated answer on it yet.
JORDAN: Obama care is a mess, and we need to -- we need to replace the whole thing, repeal the whole thing. That's what we need to do.
CUOMO: I understand what you think should be done. I get it. And I'm happy for you to say it as many times as you would like.
JORDAN: The people would like that, too.
CUOMO: What I'm saying is -- well, that's not really true, when you look at the polls about the ACA, it's actually more popular. And many members of your own party don't want to see what's happening right now, that the president -- I want to ask you about the executive order.
JORDAN: The polls that count are election day, and that was pretty clear.
CUOMO: Right. But just because you were -- you know, just because a manufactured message about something being bad works doesn't mean that it's actually the truth. What I'm saying is the truth is complicated. But what seems simple is you were against executive orders when they
go against congressional authority. That's what is happening now, Jim Jordan.
CUOMO: He is taking action that he himself has said in the past was wrong for President Obama to take.
JORDAN: Not with the CSR. You could maybe make that argument on the -- the interstate shopping for insurance. I don't think so. I think that there is flexibility enough in the law to allow Health and Human Services to do those kind of things. So I don't think it's the same as Obama did. But you might be able to make that argument.
Certainly, with CSR payments, you can't. This is not appropriated dollars. The president says we're going to stop it. And all this underscores is just what a mess Obamacare is. And never forget, and I come back to this every time we do this. Never forget what they told us about this law. Everything that the Democrats told us about this law has turned out to be false.
CUOMO: That's not true.
JORDAN: Yes, it is. If you like your plan, keep your plan. If you like your doctor, keep your doctor.
CUOMO: That's fair criticism.
JORDAN: The president told us...
CUOMO: But not everything is untrue.
JORDAN: Nine different lies they told us. And we know they were lies, because the architect of Obamacare, Jonathan Gruber, who "The New York Times" called the architect of this law, was caught on videotape saying, "Yes, we misled the American people. We told them things that weren't accurate. WE pulled one over on the American people." So the architect told us they lied to us. "Like your plan, keep your plan. Like your doctor, keep your doctor. Premiums will decline. Deductibles will go down."
The president of the United States, President Obama, told us premiums would decline on average $2,500. Now, how has that worked out for American families? So every...
CUOMO: It depends on which American families you're talking about, Jim.
[07:25:11] JORDAN: They told us web site was going to roll this out.
CUOMO: You -- and it didn't.
JORDAN: Not at all.
CUOMO: You guys fall short a lot. I've got a news flash for you, Jim Jordan. You guys promise the American people a lot of things that don't come true.
JORDAN: I didn't promise that on Obamacare.
CUOMO: I know. That wasn't you. Your time is now.
JORDAN: We're trying fix it.
CUOMO: Your time is now. You said you'd make it fixed. You'd make it better. You cannot find a reasonable health care analyst who will look at cutting the subsidies, shrinking the enrollment period, and doing other things, that the president's doing the executive order that you tried to do in your bill that makes it better in the main for American families.
This seems to be about sucking money out of it and using it for something else. But you're doing it on the backs of the most needy.
JORDAN: You're acting like these CSR payments are the reason this thing is such a mess. That is not the case.
CUOMO: No. I'm saying the payments are really stabilizing health care for people who need health care.
JORDAN: You can't stabilize this thing. It's already falling apart. that is what everybody...
CUOMO: You're making it fall apart by pulling the subsidies, shrinking the enrollment period, and saying (ph) what the rollout of the plan.
JORDAN: Chris, think about your logic. You're saying the folks who brought this, who passed this law, who told us nine different statements that were absolutely false, the architect told us on camera that, yes, we misled the American people. The thing is falling apart. And now you're saying President Trump, by stopping an unconstitutional activity, is somehow making the -- is the cause of the problem. That makes absolute no sense.
CUOMO: You're arguing -- you want to do the syllogy game, you're arguing that imperfection -- and nobody would argue that the ACA is perfect -- is...
JORDAN: Yes, that's for sure.
CUOMO: ... that the imperfection is now going to be the enemy of any progress at all.
CUOMO: Because you're not making progress on this. Millions more people who are -- and that is what the president is doing. You said -- you said we should repeal and replace.
JORDAN: Repeal and replace it. And we did that in the House. I actually reintroduced the clean repeal legislation. We've had this conversation. CUOMO: And your party -- and your own party couldn't agree on it. Because they know too many of you know...
JORDAN: Unfortunately, you're right.
CUOMO: Why? And why?
JORDAN: Six Republican senators voted against the very legislation they had supported 20 months ago.
CUOMO: And why.
JORDAN: And that drives American voters crazy.
CUOMO: And why?
JORDAN: And it should.
CUOMO: No, look, some voters it drives crazy. Some. And some of those same voters are going to be hurt by what you're doing right now by endorsing this executive order.
JORDAN: No. They're being hurt by Obamacare. They're being hurt by Obamacare, plain and simple.
CUOMO: But you're messing with Obamacare to the disadvantage of millions of people who need the help, 6 million low-income Americans. Six million.
JORDAN: Premiums have skyrocketed under Obamacare. If you're in the individual market, a family is spending 1,000 bucks a month.
CUOMO: For some people. For some people.
JORDAN: For a $10,000 deductible plan. That's the kind of -- yet they were told those premiums were going to go down by the people who passed this law. And now President Trump and Republicans are trying to...
CUOMO: But you can fix it.
JORDAN: We're trying to change it, repeal it and replace it. And yet, all somehow we're to blame.
CUOMO: Hold a second. You're going to be to blame. Because what the president is doing right now is subverting a law in a way where it's going to cause loss. And that's on you, because it didn't have to happen.
JORDAN: He's not subverting a law. He's stopping unconstitutional payments to insurance companies who have had record profits the last few quarters.
CUOMO: If you want to deal with costs in health insurance do it. What I'm saying is you've got to tell the whole truth. JORDAN: You do. That's the president's other executive orders.
Interstate shopping, allowing associations. They are going to help with competition, improve competition and begin to bring down costs. That's why he's doing it.
CUOMO: Well, first of all, some states allow it now. We haven't seen that kind of cost savings.
Second of all, they price insurance based on where you are, not where they are. So there's a little bit of a specious argument in terms of what the premise is to go across state lines.
When you let people get cheaper plans, someone, thank God like you, me, you know, younger, healthy, we're OK. We're going to get priced better if we did it on our own, maybe. One, that usually -- not usually. Sometimes comes back to bite us in the behind. Because then when we have need, our plan doesn't cover it, because it's only a catastrophic plan.
Second, you know that insurance isn't about just you and me. It is about the collective. And when you pull out the people like us and those who are younger, I may be giving us too much credit. We're probably a little bit too old to really change the marketplace.
JORDAN: I'm older than you.
CUOMO: But when you take the younger and the healthy people out, you change the price scale. When you pull these subsidies out, which you're endorsing, you're going to hurt those lower-income people. But you're also going to hurt other people, because the insurance companies are still going to make their money.
JORDAN: No, you know what I'm endorsing? I'm endorsing keeping our word. I'm endorsing doing what we said we would do. That's what the president is doing. That's what I want to do. That's why the -- that's why the American people are so frustrated. Because we told them we were going to repeal and replace it, and we haven't gotten that down.
CUOMO: And you're OK with him doing nit by executive order when you have pounded executive orders in the past.
JORDAN: I hate doing -- everything we do to spook the families who have been hurt by this law, that when it was passed, they were told nine different false statements, they were lied to by the architect of Obamacare, Jonathan Gruber. I'm OK with changing all that, giving them better insurance, better health care. And that's what we're focused on doing.
But in real simple terms, let's keep our word. Let's do what we said. That's what the president is focused on. That's what I'm focused on. That's --