By cutting off that cash to insurers, Trump could cost the government significantly more money than his decision saves.
In fact, an official estimate found that Trump's move will lead over the next decade to almost $200 billion in extra government spending — money that will go directly to the Obamacare insurers themselves.
That likely unintended consequence reflects the complex nature of Obamacare' CSRs, and of the Affordable Care Act overall.
The Affordable Care Act offers two forms of financial aid to the many low- and middle-income customers who buy health coverage on marketplaces run by the federal government and individual states.
The first is premium tax credits.
Those reduce the amount of money that people have to pay each month to remain enrolled in their health plans. In that case, the government gives insurers a fraction, sometimes a very large fraction, of a plan's retail price, with the customer picking up the difference.
About 85 percent of Obamacare customers on government exchanges get premium discounts. They are available to people who earn 100 percent to 400 percent of the federal poverty level.
The second form of assistance is cost-sharing reductions.
About 57 percent of Obamacare customers on the exchanges get those CSRs, which are discounts to their out-of-pocket health costs. That works out to about 6 million Americans.
The CSRs reduce the amount of cash people have to spend on copayments, coinsurance and deductibles when they see a doctor, get a laboratory test, undergo surgery or buy prescription drugs.
People who earn 100 percent to 250 percent of the poverty level qualify for CSRs if they buy so-called silver plans on the Obamacare exchanges.
Silver plans normally cover 70 percent of their customers' health costs. But customers who qualify for CSRs can get up to 90 percent or more of their costs covered.
Insurers have to give the discounts to qualified customers. They don't have the option of refusing.
To compensate the insurers for those discounts, the ACA said they would be reimbursed by the federal government.
That happened ever since the Obamacare plans took effect in 2014.
But the Republican-led House of Representatives challenged those payments with a federal lawsuit.
The House argued the payments were illegal because they were not appropriated by Congress in a separate legislative action.
Despite that lawsuit, and despite a judge ruling in the House's favor, the Obama administration continued making the payments as it appealed the decision.
The payments were projected to be worth $7 billion through 2017, and about $10 billion next year.
Last Thursday, after months of threats, Obamacare opponent Trump cut off the payments. The Trump administration cited a legal opinion by Attorney General Jeff Sessions that said the payments required congressional appropriation.
In the days since, Trump has called the payments bailouts multiple times.
And he vowed that he would not endorse a legislative deal sponsored by fellow Republican Sen. Lamar Alexander of Tennessee that, in the president's words, bailed out insurers.
"While I commend the bipartisan work done by Sens. Alexander and [Patty] Murray — and I do commend it — I continue to believe Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies," Trump said in a speech at the Heritage Foundation on Tuesday.
On Wednesday, Alexander said that Trump called on him to do such a legislative fix for Obamacare markets more than a week before the president actually cut off the CSRs. Alexander was already publicly discussing a bipartisan deal that would ensure that CSRs be paid weeks before Trump pulled the plug.
Despite Alexander's claim, Trump again used Twitter to call the CSR payments bailouts.
Tim Jost, a law professor and leading Obamacare expert, noted in a Health Affairs blog post last week: "In fact, the ACA requires the federal government to reimburse insurers for these reductions."
"This is not a bailout. It is rather a statutory obligation of the federal government to pay insurers for services they have provided as required by law," Jost wrote.
Regardless of what Trump believes, the nonpartisan Congressional Budget Office found, back in August, that cutting off the CSR payments will not save the government money.
In fact, such an action gives insurers even more money than they had been getting.
A report by the CBO found that killing the payments to insurers would add $194 billion to the federal deficit over the next decade.
That extra spending would result from insurers raising their plan premiums to offset the loss of the CSR reimbursements. Many insurers have done just that for 2018 plan prices because they feared that Trump would end the reimbursements, which still would leave them responsible for giving the discounts to qualified customers.
When premiums rise, the government increases the dollar value of the subsidies to offset the increase in insurance rates. And because of that, the government will have to spend billions of dollars more each year to subsidize Obamacare customers who are hit with higher premiums.
And those subsidies would go directly into insurers' coffers.
"The average amount of subsidy per person would be greater, and more people would receive subsidies in most years," the CBO said in its report.
And while the rising subsidies would almost totally insulate customers who get the tax credits from the higher premium prices, customers who are not subsidized will bear the full brunt of the rising rates.