State AGs poised to enter fight over ACA insurance subsidies
Yet another faction is about to join the ongoing battle over cost-sharing reduction payments.
A federal appeals court last week granted state attorneys general the ability to defend the Affordable Care Act subsidies in a legal case over whether the federal government must keep making the payments.
A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit held that 16 attorneys general may intervene in House v. Price because they showed a “substantial risk” that terminating the cost-sharing reduction payments, or CSRs, would “directly and imminently” cause insurance premium hikes and lead to more people becoming uninsured.
The appellate court’s order is a major development in the case, which started during the Obama administration. President Donald Trump has repeatedly threatened to end the CSRs, labeling them insurer “bailouts.”
The decision stemmed from a motion the attorneys general—from both Republican- and Democratic-led states— filed in May seeking permission to get involved in the case. The lawsuit was originally brought by House Republicans to block federal payment to insurers to fund the Affordable Care Act’s cost-sharing reduction subsidies for low-income exchange plan members.
A U.S. District Court judge in May 2016 agreed with House Republicans that the Obama adminis- tration had been illegally funding the payments without congressional appropriations. The Obama administration appealed the ruling. Now the case is on hold in the D.C. Circuit.
The appellate court order means the Trump administration cannot unilaterally stop the CSR payments and dismiss the appeal, according to Timothy Jost, emeritus professor at the Washington and Lee University School of Law and an expert on healthcare reform.
“If the administration does stop making the payments, the states—or insurers, or possibly consumers—would be able to sue to require the payments to be made and the injunction entered by the lower court would not be as much of a roadblock to their prevailing,” he wrote in Health Affairs.
The payments are viewed by many as critical to stabilizing the Obamacare exchanges. A coalition in- cluding America’s Health Insurance Plans, the American Hospital Association, the American Medical Association, the Federation of American Hospitals, and U.S. Chamber of Commerce last week urged the Trump administration to continue funding the CSRs.
“Without these funds, consumers’ access to care is jeopardized, their premiums will increase dramatically, and they will be left with even fewer coverage options,” the groups said in a joint statement. “As medical professionals, insurers providing health care services and coverage to hundreds of millions of Americans, and business leaders concerned with maintaining a stable health insurance marketplace for consumers, we believe it is imperative that the administration fund the cost-sharing reduction program.”
An AHIP spokesperson said the association did not have a comment on the appeals court ruling.
The Trump administration has been paying the subsidies on a month-by-month basis. But Trump has threatened to quit funding them as a way to pressure Congress to pass a healthcare bill.
“The court’s decision is good news for the hundreds of thousands of New York families that rely on these subsidies for their healthcare,” New York Attorney General Eric Schneiderman said in a statement. “It’s disturbingly clear that President Trump and his administration are willing to treat them as political pawns; but this coalition of attorneys general stands ready to defend these vital subsidies and the quality, affordable healthcare they ensure for millions of families across the country.”