The Trump Administration confirmed on Friday that it is stopping, with
immediate effect, billions of dollars in payments to insurers that help
keep the cost of health coverage affordable for about seven million
low-to-middle-income families. In a statement, the White House said that
the federal government couldn’t lawfully make the payments, which are an
integral part of the subsidized private-insurance markets that emerged
from the Affordable Care Act.

As my colleague Amy Davidson Sorkin pointed out earlier, the Administration’s legal argument is narrow and tendentious. In
reality, this is a cynical political decision, made at Donald Trump’s
behest, to sabotage the workings of the A.C.A. and to endanger the
welfare of millions of hardworking American families who are unable to
bear the full cost of a private-insurance policy.

Unlike the executive order on health care that Trump issued on Thursday,
the impact of this decision isn’t ambiguous or dependent on the way
various government agencies choose to interpret its language. The new
policy will go into effect straight away. Under the instruction of the Justice
Department, the Department of Health and Human Services, which
administers Obamacare, is stopping payments to insurers, which are
known as cost-sharing reduction payments.

Under the A.C.A., insurers are obliged to limit the out-of-pocket
costs—for things like co-pays and, especially, deductibles—for
households earning less than two and a half times the poverty line. (For
a family of four, that’s about sixty-one thousand dollars.) The
cost-sharing payments, which totalled about seven billion dollars in
2016, were designed to compensate insurers for the impact on their
bottom line.

By stopping the payments immediately, the White House will throw the
insurance market into turmoil. Insurers had already set their rates for
2018, and the open-enrollment season begins on November 1st. In
calculating the premiums they would charge, some insurers assumed that
they would continue to receive the cost-sharing reduction payments.
Others assumed that the payments would stop. Now all the insurers know
that they won’t get the money. But, under the terms of the A.C.A., they
will still be obligated to limit the out-of-pocket costs for households
under the income limit. That is an intentional recipe for confusion and
chaos.

In the longer term, Trump’s decision will lead to substantially higher
premiums, as insurers adjust their prices to reflect the lost revenue.
The Congressional Budget Office, in a recent study, estimated that
premiums would rise by twenty per cent, on average, if the cost-sharing
reduction payments were eliminated. In some parts of the country, the
private-insurance system could collapse completely, as insurers choose
to exit the market.

Clearly, this is Trump’s intention. It has been widely reported that
some of his advisers tried to talk him out of making this move on the
grounds that it would be highly damaging. But Trump was so infuriated by
Congress’s failure to pass a bill repealing Obamacare, or large parts of
it, that he chose to go ahead anyway. Repeatedly frustrated in the
legislative arena, he settled on this spiteful act of diktat.

As of Friday afternoon, Trump still hadn’t offered a public defense of
his decision. But earlier, in one of his early-morning tweets, he openly
gloated about the damage he was causing, writing, “The Democrats
ObamaCare is imploding. Massive subsidy payments to their pet insurance
companies has stopped. Dems should call me to fix!” Other Administration
officials have been equally heartless in their comments. “If the
insurance companies want to try and raise their rates because they are
no longer getting a bailout, that’s their problem,” Mick Mulvaney, the
White House budget director, told reporters.

Paul Ryan and Mitch McConnell publicly supported the decision—no
surprise there—but one or two elected Republican officials did cry foul.
“Cutting health care subsidies will mean more uninsured in my district,”
Ileana Ros-Lehtinen, a G.O.P. congresswoman from Florida, wrote on
Twitter in advance of the official White House announcement. “@potus
promised more access, affordable coverage. This does opposite.”

The White House’s decision to end the payments isn’t the end of the
story. A group of state attorneys general have indicated that they will
mount a legal challenge. And Congress could always render the legal
battle moot by appropriating money for the cost-sharing reduction
payments. But that would involve Republicans doing something to
safeguard an important element of Obamacare, and that seems unlikely.

In any case, Trump is following the fallback strategy that he may have
had in mind all along. During the campaign, he suggested that, rather
than trying to repeal Obamacare, the Republicans should wait for it to
collapse of its own accord and then step in. The problem with this
strategy was obvious: the vast majority of the Obamacare exchanges,
although they did have some problems, weren’t in any danger of
collapsing. For Trump’s idea to work, somebody would have to subvert
them.

That somebody turned out to be him. With his executive order encouraging
the spread of cheap, unregulated insurance policies; with his
Administration’s decision to slash spending on the advertising and
promotion of Obamacare enrollment; and, now, with this latest
premeditated act of vandalism, whose ultimate victims will include some
of his own supporters, he has done all he can to bring the system
crashing down around him. Even for a President with a record as dismal
as his, this is a new low.