President ends Obama illegal diversion of funds from Fannie and Freddie to pay Obamacare insurance subsidies
WASHINGTON, D.C. – Late Thursday night, President Trump effectively ended Obamacare with the stroke of a pen, precisely following the recommendation Inforwars.com first exclusively published on April 28, 2017.
In a press release issued from the White House on Thursday, President Trump announced that based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare.
“In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments,” the White House press release stated.
“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,” the press release concluded.
Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.
In a separate press release from the U.S. Department of Health and Human Services, Acting Secretary Eric Hargan and the Centers for Medicare Centers for Medicare & Medicaid Services Administrator Seema Verma released the following statement announcing that cost-sharing reductions payments will be discontinued immediately based on a legal opinion from the Attorney General:
“It has been clear for many years that Obamacare is bad policy. It is also bad law. The Obama Administration unfortunately went ahead and made CSR payments to insurance companies after requesting – but never ultimately receiving – an appropriation from Congress as required by law.
“In 2014, the House of Representatives was forced to sue the previous Administration to stop this unconstitutional executive action. In 2016, a federal court ruled that the Administration had circumvented the appropriations process, and was unlawfully using unappropriated money to fund reimbursements due to insurers.
“After a thorough legal review by HHS, Treasury, OMB, and an opinion from the Attorney General, we believe that the last Administration overstepped the legal boundaries drawn by our Constitution. Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”
The article Infowars.com published on April 28, 2017, had advised that President Trump could put an end to Obamacare on his own, without requiring Congress to take any action at all.
The article next asked how that was possible?
What follows is the answer to that question that Infowars.com published in April.
All President Trump must do to “repeal” Obamacare is sign an Executive Order instructing the Solicitor General to withdraw the Obama administration’s appeal in the federal district court case U.S. House of Representatives v. Burwell, (130 F. Supp. 3d 53, U.S. District Court for the District of Columbia, 2016).
The result will be to immediately defund the low-income insurance company subsidies being paid by the federal government under Section 1402 of the Affordable Care Act (ACA), causing Obamacare to collapse, almost immediately.
The point is Congress never funded any taxpayer funds to pay the low-income insurance subsidies that are at the heart of making the ACA work.
What is at issue is Section 1402 of the ACA – a section written to provide federal subsidies to insurance companies for insurance purchased on state insurance exchanges to cover the difference between the capped maximum a low-income purchaser could be expected to pay and the amount the insurance cost.
Without funds provided by Congress to pay the low-income insurance subsidies under 1402, Obamacare collapses almost immediately.
No insurance company can long afford to provide low-income health insurance at a discount, unless the federal government pays the difference between what the insurance truly costs and the limited amount low-income purchasers can pay.
The problem is that Congress refused to pass an appropriation to fund Section 1402, leaving the Obama administration scrambling to find funds somewhere else in the federal budget that could be diverted to pay the low-income insurance subsidies.
Infowars.com has proved through an analysis of the Treasury Department balance sheets that the Obama administration found a solution in August 2012, when the Treasury Department decided that earnings confiscated from the Government-Sponsored Entities (GSEs) Fannie Mae and Freddie Mac in the “Net Worth Sweep” (NWS), could be diverted to pay the ACA low-income insurance subsidies.
The record contained in the Treasury Department balance sheets shows through 2013 a direct diversion of the NWS into line items used to fund Obamacare.
After 2013, the Obama administration continued the NWS (ultimately confiscating some $260 billion from Fannie and Freddie), but the one-for-one diversion of the Fannie and Freddie funds going into line items used to fund Obamacare is less clear, suggesting Treasury grew more clever after 2013 in hiding the diversion within the Treasury general account used as a slush fund.
The House of Representatives filed a federal district court case against then Health and Human Services Secretary Sylvia Matthews Burwell to stop the Obamacare from diverting federal funds to pay the ACA low-income subsidies.
On May 12, 2016, U.S. District Judge Rosemary Collyer, in the case U.S. House of Representatives v. Burwell, ruled against Health and Human Services Secretary Sylvia Matthews Burwell.
Judge Collyer decided HHS Secretary Burwell had no constitutional authority to divert funds Congress appropriated to one section of the ACA to fund Obamacare subsidy payments to insurers under another section of the ACA, Section 1402 – the clause defining the insurer subsidies – when Congress specifically declined to appropriate any funds to Section 1402 for paying the insurance subsidy.
“Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution,” Judge Collyer concluded.
“Congress authorized reduced cost sharing but did not appropriate monies for it, in the Fiscal Year 2014 budget or since,” she stressed.
The Obama administration appealed the District Court decision in U.S. House of Representatives v. Burwell to the U.S. Circuit Court of Appeals, deciding on its own authority that federal funds could continue to be diverted from other budgetary purposes to continue paying the insurance subsidies as long as the case was under appeal.
The point is that if the Trump administration simply decided to drop the Circuit Court appeal in Burwell, the District Court decision would become established law.
The result would be the Trump administration would be forbidden from diverting federal funds to pay the ACA insurance subsidies, with the result Obama care would implode.
“The Obama administration appealed the decision, but if the Trump administration were to drop that appeal, the subsidies would disappear,” commented Julie Rovner, Kaiser Health News, in an article published on April 9, 2017.
If insurance companies were forced to take a loss by absorbing the cost above what low-income insured could afford to pay for the insurance coverage required under Obamacare, no insurance company could afford to provide health insurance to low-income insureds under the ACA.
Once President Trump withdraws the Obama administration appeal in U.S. House of Representatives v. Burwell, Obamacare becomes history.
To revive Obamacare, Congress would have to pass a resolution funding ACA Section 1402, something even RINOs like Paul Ryan and Mitch McConnell might find politically suicidal to do.