States get OK to sue for sub­si­dies

Step set if Trump ad­min­is­tra­tion cuts health care fund­ing

Northwest Arkansas Democrat-Gazette - - NATIONAL - RI­CARDO ALONSO-ZAL­DIVAR In­for­ma­tion for this ar­ti­cle was con­trib­uted by An­drew Har­ris, Zachary Tracer and Justin Sink of Bloomberg News.

WASH­ING­TON — A fed­eral ap­peals court panel in Wash­ing­ton said late Tues­day that a group of states can join in a suit to de­fend the le­gal­ity of gov­ern­ment “cost shar­ing” sub­si­dies for co­pay­ments and de­ductibles un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act if the Trump ad­min­is­tra­tion de­cides to stop pay­ing the money.

Pres­i­dent Don­ald Trump has been threat­en­ing to do just that for months, and he ramped up his warn­ings af­ter the GOP’s drive to re­peal and re­place the Af­ford­able Care Act fell apart in the Se­nate last week.

The sub­si­dies help keep pre­mi­ums in check, but they are un­der a le­gal cloud be­cause of a dis­pute over the word­ing of the 2010 law. Trump has spec­u­lated that he could force Democrats to make a deal on health care by stop­ping the pay­ments.

The court’s de­ci­sion is “a check on the abil­ity of the pres­i­dent to sab­o­tage the Af­ford­able Care Act in one very im­por­tant way,” said Tim Jost, pro­fes­sor emer­i­tus at Wash­ing­ton and Lee Univer­sity School of Law in Vir­ginia.

Be­cause of the rul­ing, le­gal ex­perts said, states can now sue if the ad­min­is­tra­tion cuts off the sub­si­dies. Also, they said, the pres­i­dent won’t be able to claim he’s merely fol­low­ing the will of a lower court that found Congress had not prop­erly ap­proved the money.

“My team is ready to de­fend th­ese sub­si­dies in court,” said Cal­i­for­nia At­tor­ney Gen­eral Xavier Be­cerra, who is help­ing steer the states’ in­volve­ment.

New York At­tor­ney Gen­eral Eric Sch­nei­der­man said in a state­ment that the de­ci­sion is “good news for the hun­dreds of thou­sands of New York fam­i­lies that rely on th­ese sub­si­dies for their health care.”

The Jus­tice Depart­ment had no com­ment. The White House reis­sued an ear­lier state­ment say­ing that “the pres­i­dent is work­ing with his staff and his Cab­i­net to con­sider the is­sues raised by the … pay­ments.”

Trump has made his feel­ings clear on Twit­ter. “If Oba­maCare is hurt­ing peo­ple, & it is, why shouldn’t it hurt the in­sur­ance com­pa­nies,” he tweeted early Mon­day.

He elab­o­rated in an ear­lier tweet, “If a new Health­Care Bill is not ap­proved quickly, BAILOUTS for In­sur­ance Com­pa­nies … will end very soon!”

In a twist, the ap­peals court panel seemed to take such state­ments into ac­count in grant­ing 17 states and the Dis­trict of Columbia the abil­ity to in­ter­vene on be­half of con­sumers.

The judges’ de­ci­sion said states’ doubts that the ad­min­is­tra­tion could ad­e­quately de­fend their in­ter­ests in court were fanned by “ac­cu­mu­lat­ing pub­lic state­ments by high-level of­fi­cials … about a po­ten­tial change in po­si­tion.”

“He’s re­ally a ter­ri­ble client, Pres­i­dent Trump is,” Univer­sity of Michi­gan law pro­fes­sor Ni­cholas Ba­gley said. “The states point to his pub­lic state­ments and say, ‘Are you kid­ding me? We know the pres­i­dent is poised to throw us un­der the bus and we know be­cause he said so.’”

The health law re­quires in­sur­ers to help low-in­come con­sumers with their co­pays and de­ductibles. Nearly 3 in 5 health­ cus­tomers qual­ify for the as­sis­tance, which can re­duce a de­ductible of $3,500 to sev­eral hun­dred dol­lars. The an­nual cost to the gov­ern­ment is about $7 bil­lion.

The law also spec­i­fies that the gov­ern­ment shall re­im­burse in­sur­ers for the cost-shar­ing as­sis­tance that they pro­vide.

None­the­less, the pay­ments re­main un­der a cloud be­cause of a dis­agree­ment over whether they were prop­erly ap­proved in the health law, by pro­vid­ing a con­gres­sional “ap­pro­pri­a­tion.”

House Repub­li­cans try­ing to thwart the Af­ford­able Care Act sued the Obama ad­min­is­tra­tion, ar­gu­ing that the law lacked spe­cific lan­guage ap­pro­pri­at­ing the cost-shar­ing sub­si­dies.

A dis­trict court judge agreed with House Repub­li­cans, and now the case is be­fore the U.S. ap­peals court in Wash­ing­ton.

If Trump makes good on his threat, ex­perts es­ti­mate that pre­mi­ums for a stan­dard “sil­ver” plan would in­crease by about 19 per­cent and more in­sur­ers might de­cide to leave al­ready shaky mar­kets.

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