(Reuters) -Shares of health insurers with plans under the Affordable Care Act, or Obamacare, fell 7% to 1.5% premarket on Monday after U.S. President Donald Trump said federal funds subsidizing those plans must be redirected to Americans buying coverage.
The subsidies, which are due to expire at the end of the year, were introduced during the COVID-19 pandemic to help lower-income Americans pay for private health insurance and are at the heart of the longest-ever federal shutdown that has sidelined federal workers, delayed food aid and snarled air travel.
Trump posted on his Truth Social platform on Sunday, blasting the subsidies as a “windfall for Health Insurance Companies, and a DISASTER for the American people”. He repeated a call for funds to be sent directly to individuals to buy coverage on their own.
“I stand ready to work with both Parties to solve this problem once the Government is open,” Trump said in the post.
Shares of Centene slid 7.1%, Molina Healthcare slipped 1.5%, Elevance Health was down 3.4%, while UnitedHealth fell 1.7% in trading before the bell.
“I am recommending to Senate Republicans that the Hundreds of Billions of Dollars currently being sent to money sucking Insurance Companies in order to save the bad Healthcare provided by ObamaCare, BE SENT DIRECTLY TO THE PEOPLE SO THAT THEY CAN PURCHASE THEIR OWN, MUCH BETTER, HEALTHCARE, and have money left over,” Trump had said in an earlier post on Saturday.
Obamacare plans are subsidized by the government based on income and include a risk-adjustment pool that reimburses insurers covering a disproportionate share of sicker members.
Democrats want to extend the subsidies before reopening government, while Republicans said they would be open to addressing the issue only after government funding was restored.
The subsidies have enabled enrollment to double to 24 million since they were put in place in 2021.
The federal government has been shut down since October 1 because of a congressional impasse over healthcare. The U.S. Senate moved forward on Sunday on a measure aimed at reopening the federal government and ending the 40-day shutdown.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Pooja Desai)
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