The president had wavered for months over so-called cost-sharing reduction payments, which Republicans in Congress had long targeted in their effort to dismantle Obamacare.
"Is the president interested in continuing what he sees as corporate welfare and bailouts for the insurance companies?" "We are going to have great health care in our country". Earlier this year the Congressional Budget office estimated premium increases would average 20 percent without cost-sharing subsidies. This week, California tacked on a more than 12 percent surcharge to plans that would be most affected by the loss of the subsidies. That means that since they're not being compensated, insurers will start charging higher premiums for everyone else.
By antagonising Democrats who support Obamacare, Mr Trump's actions could also lead to political turmoil over spending in December, when Republicans hope to put the final touches on a sweeping tax reform bill.
Insurers provide the subsidies to consumers, and the federal government reimburses insurers for the higher costs.
Democrats and moderate Republicans including Charlie Dent of Pennsylvania and Ileana Ros-Lehtinen of Florida expressed dismay at the move. "Now they're refusing to comply with federal law in a way that will hike the cost of care for millions of Americans by withholding critical subsidies that make care more affordable", said Attorney General Becerra.
Rep. Mark Walker, chair of the Republican Study Committee, made it clear that House conservatives are not prepared to vote for a deal.
"The president campaigned on a bold agenda, and Congress's inaction won't stop the administration's tireless efforts to boost the economy, improve healthcare, and protect the American people", said Raj Shah, the White House´s principal deputy press secretary.
The cost-sharing subsidies were created to reduce out-of-pocket costs such as deductibles and co-pays for people with incomes from 100 percent to 250 percent of the federal poverty level. Those who do not have coverage and do not meet special-enrollment conditions can begin shopping and comparing their options and enroll starting November 1, when open enrollment begins. A spokeswoman for Republican Arizona Attorney General Mark Brnovich said he has not joined in the lawsuit.
Unable to wheedle Congress into repealing the Affordable Care Act despite multiple attempts, Trump announced Thursday that he will simply end federal payments to insurers to cover deductibles and co-pays for low-income Americans.
A Covered California analysis on the impact of the CSR surcharge found that 78 percent of subsidized consumers would either see no change in what they would pay for insurance in 2018, or would pay less than what they would have paid if there had been no CSR surcharge.
Democrats accused Trump of sabotaging the law.
Referring to President Trump, Schneiderman said, "He has taken his threats of off Twitter and brought them into the living rooms of working families across America and the offices of America's doctors, nurses and other health care providers".
The Trump administration would normally have just dropped the appeal.
"Although this is a step in the right direction, it is no substitute for Congress keeping its promises to repeal ObamaCare", Jason Pye, vice president of legislative affairs for FreedomWorks, said in a statement, referring to the executive order.
President Trump has recently taken a series of what appear to be bold executive actions to reverse Obama-era policies: declining to re-certify the Iran nuclear deal, halting subsidy payments to insurance companies and setting an expiration date for the DACA immigration program.