The White House will stop making federal payments to insurers. These payments are subsidies for low income people who purchase health plans through the health law’s exchange. The payments reduce the out-of-pocket costs such as deductibles when people need health-care; this potentially saves them thousands of dollars per year. Under the Affordable Care Act, the federal government is supposed to pay the subsidies, a cost estimated around $7 billion per year.
Trump’s decision deeply affects the insurers, because the insurers pay in advance for people eligible for subsidies and are later reimbursed for their advanced payment. With the change, insurers will continue to pay the out-of-pocket charges without the reimbursements leading to severe financial losses for these companies.