In addition to the health association plans, Trump said that he will explore the expansion of "short-term limited duration insurance", which are plans that are not subject to Obamacare's expensive regulations.
The administration has said that these subsidy payments are "unlawful" - and halting them will deal a critical blow to one of Obama's hallmark pieces of legislation.
The White House said late on Thursday that it could not lawfully pay the subsidies anymore. The subsidies help lower copays and deductibles for people with modest incomes.
Mr. Trump constantly criticizes Obamacare's rising premiums. The next payments are due around October 20.
Senate Democratic Leader Chuck Schumer and House Democratic Leader Nancy Pelosi derided the move in a joint statement, saying Trump would single-handedly push American's healthcare premiums higher. Several insurers have cited uncertainty over the payments when hiking premiums for 2018 or exiting insurance markets altogether. "It should come as no surprise that California is prepared to fight in court to protect affordable healthcare for its people", Becerra said.
"President Trump has apparently made a decision to punish the American people for his inability to improve our health care system".
Trump finally chose to take the action to end the payments after the GOP failed multiple times to repeal and replace Obamacare on Capitol Hill. These people, who have greater-than-average need for essential health benefits like hospitalization and mental health care, could instead remain in the protected Obamacare marketplace.
On Twitter, Trump has termed the payments to insurers a "bailout", but it's unclear if the president will get Democrats to negotiate by stopping payment. That could mean employers could form groups across state lines, officials said. Lawmakers have also been anticipating the action. Patty Murray of Washington.
About 17 million people buying individual health insurance policies are the main focus of Trump's order. "And when I say people, I mean by the millions and millions". The annual cost to the government is now about $7 billion.
But those who get no subsidies are exposed to the full brunt of cost increases that could reach well into the double digits in many states next year. "The Affordable Care Act is still the law of the land and the cost-reduction subsidies are part of that".
Nevertheless, the share of adults without health insurance fell to a record low of 10.9 percent in late 2016, from 18 percent before the health insurance exchanges opened in October 2013, as measured by polling by Gallup and Sharecare. "This plan isn't another government mandate", Sanford said. A judge for the federal district court for the District of Columbia ruled in favor of the Republicans, and the Obama administration appealed the ruling. A study by the Congressional Budget Office two months ago suggested that terminating the cost-sharing subsidies would lead to a dramatic 20% rise in the average cost of the most popular plans offered by the Affordable Care Act, as well as worsening the federal deficit by nearly $200m. Experts also questioned whether Trump has the legal authority to expand association health plans. Almost 9 million of those consumers receive tax credits under the Obama law and are protected from higher premiums. It directs the Secretary of Labor to consider expanding the ability of small businesses and other groups to band together to buy health insurance through what are known as Association Health Plans.