Insurer must be paid subsidies for Obamacare, court rules
WASHINGTON — A federal court ruled this month that a Montana insurer is entitled to federal compensation for subsidy payments under the Affordable Care Act that President Donald Trump abruptly ended last October, a ruling that could reverberate through insurance markets and cost the government hundreds of millions of dollars.
At issue are cost-sharing reductions, discounts that enhanced the value of health insurance policies purchased from the Affordable Care Act’s marketplaces by reducing deductibles, copayments and other out-of-pocket costs for lowincome consumers. Trump ended them in October, one of a series of executive actions that he said would “gut” President Barack Obama’s signature domestic achievement by destabilizing the law’s marketplaces and sending premiums higher.
But Judge Elaine Kaplan of the U.S. Court of Federal Claims said this month that Trump’s actions violated a government promise to insurance companies participating in the health law. Although Congress never explicitly provided money for the subsidies, the court said, the government had a legal obligation to pay them.
“The statutory language clearly and unambiguously imposes an obligation” on the government to reimburse insurers for the discounts they were required to provide to low- and middleincome people, Kaplan said in her decision.
The decision could have broad ramifications for health insurers. Several similar cases are pending in the Court of Federal Claims, a specialized tribunal that handles a wide range of monetary claims against the government. In April, another judge, Margaret Sweeney, certified a class action that allows insurers as a group to sue the government over Trump’s termination of the costsharing payments.
The case decided by Kaplan was filed by the Montana Health Co-op, which sells coverage on the federal insurance exchange created under the 2010 health law. The company received costsharing reduction payments from the government for 45 straight months, until Trump ended them.
Montana Health said it was entitled to $5.3 million for the final months of 2017.