Some of the largest hospital groups and business trade organizations in the country are asking the Trump administration to keep the ACA’s cost-sharing subsidies flowing to stabilize insurance markets — warning that cutting off the program will result in higher premiums and fewer people with coverage.

But first, President Donald Trump wants to use those subsidies as leverage to get Democrats to the table on health reform.

TRUMP’S BARGAINING CHIP ON HEALTH REFORM — President Donald Trump wants to use the ACA’s cost-sharing subsidy program as leverage to draw Democrats to the negotiating table on health care reform, POLITICO’s Dan Diamond and Josh Dawsey report. Trump could quickly destroy the Obamacare marketplaces if he chooses to scrap the program, worth an estimated $7 billion this year. The subsidies, which go to help insurers pay for low-income customers, are the subject of a long-standing lawsuit brought by the House of Representatives that the White House could choose to drop at any time.

… Dan and Josh report that the administration is split on whether to keep the subsidies flowing as they weigh a broader Obamacare repeal strategy. It’s been sending mixed signals about what it plans to do. On Monday, HHS suggested in a statement to the New York Times that the administration may continue the payments. On Tuesday, however, HHS condemned the report and said no decision has been made. Two administration officials said the HHS rebuttal was personally ordered by an incensed Trump, who feared that the Times story would hurt his negotiating position. Trump took the unusual step of calling HHS Secretary Tom Price to dictate a blistering statement that challenged the story and swiped at Democrats. A senior official told Dan and Josh that “POTUS wants to use [the subsidies] as leverage. When Obamacare fails on its own, the Dems will want to come to the table.”

Democrats, for their part, are adamant that they won’t negotiate on subsidies, which lower medical costs for nearly 7 million Obamacare customers. More here.

One reason why Trump should keep paying the subsidies … Deciding to continue the subsidies for now also gives the administration more legislative options, according to Ed Lorenzen of the Committee for a Responsible Federal Budget. Legislation that explicitly authorizes spending for the subsidies “is simply reiterating what the [CBO] baseline already assumes and has no cost,” Lorenzen said. But if HHS stops the payments or the White House drops its appeal, new legislation to resume the payments would need additional offsets or to be specially accommodated by the appropriations committee.

SHOW US THE MONEY — Doctors, hospitals and business groups are joining health insurers to implore President Donald Trump to keep funding flowing for Obamacare’s cost-sharing subsidies, Pro’s Paul Demko reports. “A critical priority is to stabilize the individual health insurance market,” reads a letter sent to Trump today from the American Hospital Association, the American Medical Association, the U.S. Chamber of Commerce, America’s Health Insurance Plans and the Blue Cross Blue Shield Association, among others. “The window is quickly closing to properly price individual insurance products for 2018.” The groups warn that slashing the subsidies would lead to higher premiums, which could drive out middle-class Obamacare customers who don’t receive financial assistance, and increase costs for taxpayers. The groups also warn that if fewer individuals have coverage, uncompensated care at hospitals will increase. More from Paul here.

Good Thursday morning and thanks for reading PULSE, where your correspondent is jetting off to Denver for the weekend and passing the baton to my esteemed colleague, Adam Cancryn. Send all the juicy end-of-the-week tips to acancryn@politico.com

With help from Dan Diamond, Rachana Pradhan, Renuka Rayasam and Sarah Karlin-Smith

CLUB FOR GROWTH PLACES 10 MODERATE REPUBLICANS IN ITS CROSS-HAIRS — The conservative Club for Growth today is launching its second phase of TV and digital ads demanding Obamacare repeal in 10 House districts represented by moderate Republicans as part of its $1 million ad buy. The 10 Republicanlawmakers in the group’s cross-hairs are: Reps. Martha McSally (AZ), Adam Kinzinger (IL) Patrick McHenry (NC) Rodney Frelinghuysen (NJ) Chris Collins (NY) Pat Tiberi (OH) Greg Walden (OR) Charlie Dent (PA) Tim Murphy (PA) and Evan Jenkins (WV).

“Obamacare repeal made it to the one-yard line, before it was held up by Republican moderates who are trying to keep as much of Obamacare in place as they can,” said Club for Growth president David McIntosh in a statement. “The Trump Administration and conservatives rallied behind a deal — facilitated last week by Vice President Pence — for state waivers of costly Obamacare regulations, but that can’t happen until moderates accept the deal. “ Watch the ad here

FLORIDA GETS A $1 BILLION BUMP IN SUPPLEMENTAL MEDICAID PAYMENTS — The Trump administration is giving Florida a $1 billion increase in supplemental Medicaid payments for the upcoming year, Pro Florida’s Christine Sexton reports. Gov. Rick Scott praised the administration, saying in a statement that “it is great to have a partner…