The Trump administration said on Wednesday the federal government would make a set of payments to insurers for August, despite threats from the president that the funding would be halted following the failure of Senate Republicans to repeal most of the Affordable Care Act.

Governors and Democratic lawmakers have been urging President Donald Trump to continue the payments, known as cost-sharing reduction payments, because insurers have said they may pull out of the ACA’s insurance markets or raise premiums in 2018without the funding.

The nonpartisan Congressional Budget Office said in a report Tuesday that premiums for popular, midprice plans on the ACA exchanges would rise 20% next year without the payments.

The money compensates insurers for reducing out-of-pocket costs for some low-income consumers who sign up for plans on the exchanges. About seven million people qualified for the subsidies in 2017.

Some GOP lawmakers oppose the payments, saying the money was never appropriated by Congress and amounts to a bailout for insurers. Recent comments from Mr. Trump had led to questions about whether the next payment, expected around Aug. 22, would be made by the federal government.

“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” Mr. Trump tweeted on July 29 after Senate GOP lawmakers failed to pass a bill to repeal most of the ACA.

The future of the payments remains in question, spurring bipartisan efforts among some in Congress to ensure the funding is preserved.

Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) are planning hearings on legislation to shore up the ACA markets. The legislation would likely continue the payments in 2018 while giving states greater flexibility on ACA implementation, a change that Republicans have sought.

“Congress owes struggling Americans who buy their insurance in the individual market a breakthrough in the health care stalemate,” Mr. Alexander said in a statement Wednesday after a White House spokesman said the insurer payments would be made in August.

Some Republicans panned the decision on payments and called again for the 2010 health law to be repealed.

“We cannot dig our hands into a hole $20 trillion deep to bail out insurance companies,” Rep. Mark Walker of North Carolina said Wednesday.

Write to Stephanie Armour at and Louise Radnofsky at

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