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Trump threatens to stop insurance payments so Democrats negotiate on Obamacare

Story highlights
  • Discussions on how to repeal and replace Obamacare continue albeit behind closed doors
  • A White House official said they're leaving it to the Freedom Caucus and the Tuesday Group

(CNN) President Donald Trump is threatening not to reimburse health insurers for covering low income people as a way of forcing Democrats to the negotiating table on health care.

In an interview with the Wall Street Journal published Wednesday, Trump said health care remained a top priority for him, but that he was still undecided about whether his administration would fund what are known as cost-sharing reduction payments, which reduce deductibles and co-payments for lower-income people.

Without the payments, insurers could try to pull out of the Obamacare marketplace immediately. Already, the uncertainty is prompting some insurers to drop out for 2018.

"I don't want people to get hurt," Trump said in the interview. "What I think should happen — and will happen — is the Democrats will start calling me and negotiating."

The payments were the subject of a House lawsuit under House Speaker John Boehner, which argued the Obama administration did not have the authority to make the payments without congressional approval. A district court judge last year sided with the Republicans and declared the subsidies illegal. The Obama administration appealed, and the lawsuit is still ongoing.

Trump was unclear about whether Congress might vote to authorize the payments, conceding only that as more time goes on, he does worry that his administration will be held responsible for any problems with Obamacare.

"That's part of the reason that I may go the other way" Trump said about paying the insurers. "The longer I'm behind this desk and you have Obamacare, the more I would own it."

Senate Minority Leader Chuck Schumer slammed Trump's comments, saying, "This cynical strategy will fail."

"President Trump is threatening to hold hostage health care for millions of Americans, many of whom voted for him, to achieve a political goal of repeal that would take health care away from millions more," the New York Democrat said in a statement.

Some 7 million people, or 58%, of those who signed up for Obamacare coverage for 2017 qualify for these cost-sharing subsidies.

In the same interview with the Wall Street Journal, Trump claimed his administration was "very, very close" on coming to an agreement with members of the conservative House Freedom Caucus on health care.

"They want to do the right thing," Trump said, referring to the conservative group. "They do like their president."

After Republican House leaders failed to pass a bill to repeal and replace the Affordable Care Act in the last congressional session, the White House is claiming it is taking a more active role in moving the negotiations along -- encouraging private talks between the Freedom Caucus and the moderate Tuesday Group.

But there is still no proof that Republicans are any closer to repealing Obamacare than they were six weeks ago. The effort appears to be little more than talks.

"Nothing major" is happening on the health care front aside from conversations, a GOP source very close to the negotiations told CNN.

According to a senior administration official, the White House believes there has been some progress on health care in recent days. But rather than take another stab at the very public lobbying and arm-twisting effort that the White House embraced twice and failed, this time the administration is keeping their private prodding out of the spotlight.

The White House official said they're largely leaving it up to the Freedom Caucus and the Tuesday Group to try to work out a plan that both sides can agree on with the White House quietly weighing in throughout the process.

RELATED: Freedom Caucus leader working on new health care plan

During his news conference Tuesday, White House press secretary Sean Spicer told reporters that the administration was "getting closer and closer every day."

"More votes are moving in our direction," Spicer said. "And these ideas, I think, are very helpful and the conversations are getting closer."

Ever since Republican leaders were forced to pull their health care bill because there were not enough votes to pass it, the House Freedom Caucus has been very public about their attempts to negotiate with the White House. The conservative group took a large share of the blame for the legislation's failure the first time around even though there were several moderates who also refused to vote for the bill.

RELATED: Trump calls out Freedom Caucus members in tweetstorm

On Tuesday, a source with the House Freedom Caucus familiar with health care negotiations told CNN that caucus chairman Mark Meadows had been in discussions with both the White House and House Speaker Paul Ryan and had presented a plan to Ryan over the phone that would essentially allow states to wave certain regulatory requirements. It was unclear if the proposal had any support from moderates.

The fallout for the Freedom Caucus has been intense over the last month with Trump calling out leaders of the group -- including Meadows -- by name on Twitter. South Carolina Republican Rep. Mark Sanford told the Post and Courier last month that White House budget chief Mick Mulvaney, a former House Freedom Caucus member, delivered a message to him from Trump that Trump hoped Sanford voted against the health care bill so the President could support a primary challenger against him.

The White House has tried to down play tensions.

On Wednesday morning, Mulvaney appeared on CNN's "New Day" and argued the whole Freedom Caucus-White House showdown had been overblown by the media.

"That story got a little blown out of proportion," Mulvaney said. "It's been an interesting process. I went to go talk to the Freedom Caucus about health care a couple weeks back. They knew what the deal was. The deal was that I'm just on a different team right now. But it's good competition. It's a real collegial thing still."

CNN's MJ Lee, Tami Luhby, Jim Acosta and Sara Murray contributed to this report.