House Democratic leader Nancy Pelosi spoke by phone last night with White House budget director Mick Mulvaney, and Mulvaney took the White House’s threat to sabotage the Affordable Care Act to a new level — its most serious yet, according to an account of the call provided to me by a Democratic aide familiar with the conversation.

On the call, Pelosi reiterated the Democratic position on the so-called “cost-sharing reductions” (CSRs), which subsidize lower out-of-pocket costs for millions of Americans. Democrats are insisting that these payments — which the administration has been making but has threatened to cease — must be included in Congress’ forthcoming spending bill to make sure that they continue. If they don’t, insurers, facing a big financial loss, would probably flee the individual markets, causing them to melt down.

But Mulvaney told Pelosi that the administration might not make its payment next month, the aide tells me. And not only that, Mulvaney “made clear that absent Congressional action, the administration would cease making payments,” the aide adds. A spokesman for Mulvaney didn’t immediately respond to an email requesting comment.

This appears to be a serious escalation of the White House’s threat to sabotage the exchanges. President Trump had said that he might stop the payments to try to pressure Democrats into agreeing to fund his wall on the Mexican border. But in recent days, Trump retreated on his demand for the wall, leading many to expect that the CSRs would continue, at least for the time being. And despite Trump’s rhetoric, leading Republicans, such as Paul Ryan, have said they expect the payments to continue while litigation over them is decided.

But now Mulvaney is threatening to halt the payments as soon as next month, according to the Democratic aide. And this has insurers predicting that they may end up exiting the markets if this comes to pass.

“It would be very alarming for insurers not to receive the CSRs,” Kristine Grow, a spokeswoman for America’s Health Insurance Plans, told me this morning. “What we have heard from members of Congress and the administration is that there was no reason to expect that these payments would stop as long as the litigation continues. If they go away, there is a very real chance that a lot of insurers will exit the market.” That could cause the exchanges to implode, leading to at least 10 million people without coverage.

The House GOP had challenged the CSRs in court when they were being made by the Obama administration, and had won a victory, though the payments were allowed to continue, pending the administration’s appeal. But then the Trump administration took over, and it has not decided whether to keep the appeal going. The administration has been debating whether to continue the payments. Stopping them risks saddling Trump with the blame for the chaos and loss of coverage it could produce, and Democrats have prodded congressional Republicans to tweak the law, as part of a budget deal, so that the payments are no longer legally vulnerable.

Health-care experts say the Affordable Care Act is stable, but President Trump and congressional Republicans could push it over the cliff into a "death spiral." (Daron Taylor/The Washington Post)

Congressional Republicans have not said what they will do — they, too, are in a tough spot, since the GOP would likely be blamed for the fallout from stopping the payments. Indeed, it’s unclear what the White House hopes to accomplish by escalating the threat to stop the payments, since Congressional Republicans could get caught in that crossfire. Some Republicans privately say that they want the CSRs to continue, because vulnerable House Republicans could be harmed politically if they don’t. Thus, it’s not clear why Democrats should allow the CSRs — and the threat of damage to the ACA — to be used as leverage against them, especially since Trump and Republicans are simultaneously trying to repeal and replace the ACA with something that would result in many millions more people losing coverage and far more damage done to the law.

And so, in one sense, the latest White House threat could ratchet up the pressure on congressional Republicans to fix the problem. It’s hard to say what will happen in the end. But one thing is clear: The White House appears deadly serious about threatening an outcome that would leave many millions without coverage in the hopes of increasing its leverage, though it’s not quite clear to what end.


UPDATE: A spokesman for Mulvaney says the claim that he made clear that the administration would cease the payments is false, and adds:

“Let me be clear: the only thing standing in the way of a landmark defense and border security bill is a handful of Democrats who are insisting on an 11th hour bailout of Obamacare. We can get this deal done today. There is no excuse not to.”

But nonetheless, the White House is not saying that the payments will continue, which suggests, despite this denial, that the payments are still being used as leverage to try to force Dems to give the White House what it wants.


* DEMOCRATS SET TO LAUNCH ADS ON HEALTH CARE: The Democratic Congressional Campaign Committee is set to launch digital ads targeting vulnerable House Republicans over the GOP’s repeal-and-replace bill, I’m told. Vox reported yesterday that the latest version of the GOP bill exempts members of Congress from a provision in it that would make it possible for insurers to jack up premiums for people with preexisting conditions.

That provision is already toxic for moderates; the fact that members of Congress might have exempted themselves from it gives Democrats more fodder to attack them over it. The ads, I’m told, will target 30 GOP districts, on Facebook, Instagram and Twitter, and they will explicitly point out that the new bill exempts them.

* TRUMPCARE IS STILL ALIVE: Bloomberg Politics reports that some House conservatives are warming to the repeal-and-replace bill now that state waivers for some regulations have been added, but moderates still oppose it:

An influential Republican moderate, Charlie Dent of Pennsylvania, said the changes don’t soften his opposition to the GOP bill. “The amendment as I understand it doesn’t change my position. I am still a no,” he said … those moderates in swing districts, unlike the members of the Freedom Caucus, could end up losing their seats if the repeal bill continues to remain unpopular. “I will vote my conscience,” said Representative Leonard Lance of New Jersey, who said he also remains opposed.

Our poll this week showed that the new changes (which would allow states to avoid banning jacked up premiums on preexisting conditions) should make this even more toxic for moderates.

* AMERICANS WANT GOP TO MAKE OBAMACARE WORK: A new Kaiser Family Foundation poll finds that Obamacare’s approval rating is in positive territory, 48-41, and 74 percent want the law to work. The public disapproves of Trump’s threat to sabotage it, with an exception:

The majority of the public (60 percent) thinks President Trump should not try to pass an ACA replacement plan using negotiating tactics like these that could disrupt insurance markets and cause people to lose health coverage … on the other hand, two-thirds of Republicans (67 percent) say President Trump should use whatever negotiating tactics necessary to win support for a replacement plan.

Republicans, shockingly, approve of wielding the threat of millions losing insurance to accomplish … what exactly, again? The public broadly disapproves — so maybe this tactic doesn’t actually give Trump “leverage.”

* ANOTHER POLL FINDS TRUMP’S APPROVAL IN THE TOILET: A new CBS News poll finds that Trump’s approval rating is at 41-53, and that a total of 57 percent are either scared (26) or concerned (31) about what Trump is doing as president.

Still, 62 percent say they need more time to judge his administration, so maybe that means we may still get tired of all that winning one of these days.

* AMERICANS DON’T TRUST CONGRESS TO PROBE RUSSIA: A new Post-ABC News poll finds that 56 percent think Russia tried to influence the election, and 50 percent of Americans say Congress can’t be trusted to probe this fairly. And:

Meanwhile, about one-third of Americans think the Obama administration intentionally spied on Trump and members of his campaign during the 2016 election … Just over half of Republicans believe there was improper surveillance.

Republicans believe Trump’s word over that of both the intelligence community and GOP lawmakers, all of whom have said this never happened.

* GEORGIA GOP CANDIDATE NOT RUNNING FROM TRUMP: The Atlanta Journal-Constitution reports that Karen Handel, the GOP candidate in the special House election in Georgia, will hold a fundraiser with Trump on Friday. Interestingly, the Handel campaign confirmed the event but declined to comment further.

Hopefully, Handel will be asked whether she’d vote for the new version of the GOP health bill if she were in Congress. During the previous race, she carefully hedged her position on it, and that was before the toxic changes were added.

* DEMOCRATS PUSH MINIMUM WAGE BILL AS PARTY MOVES LEFT: The Post’s David Weigel reports that Sens. Bernie Sanders and Patty Murray will today introduce a bill to hike the federal minimum wage to $15 per hour. Note this:

The last version of the Sanders bill, 2015’s Pay Workers a Living Wage Act, had just five co-sponsors. The new bill counts 22 co-sponsors, including Senate Democratic leader Chuck Schumer. Just two years ago, Schumer resisted the $15 minimum wage proposal, instead co-sponsoring Murray’s legislation for a $12 wage — “a winner issue for us,” according to Schumer.

It has no chance in the GOP-controlled Senate, obviously, but this is another indication of the rising clout of the economically progressive and activist wing of the party.

* REPUBLICANS FEAR TRUMP’S CAVE ON WALL SHOWS WEAKNESS: The Washington Examiner reports that Republicans and conservatives worry that Trump’s surrender on the border wall in budget talks could weaken the party’s position in future standoffs:

By throwing down the gauntlet and retreating on a key priority, Republican insiders and conservative activists alike worry that Trump has undercut the party’s advantage and emboldened Democrats in future talks impacting all sorts of policies.

Hey, we all know that the true “Art of the Deal” involves telegraphing weakness and bad negotiating skills in order to catch your opponent off guard in the next round, right?

* AND TRUMP OPENS FIRE ON … WRONG COURT: Yesterday a federal judge put a hold on Trump’s executive order withholding funding from sanctuary cities to strong-arm them into enforcing the federal immigration crackdown. Trump is steaming mad:

Actually, the ruling came from a federal district judge, not from the U.S. Court of Appeals for the 9th Circuit. Of course, Trump is just instructing his followers to blame the judiciary in general for yet another loss, so the details hardly matter.