Court rules allowing Dem states to defend ObamaCare payments

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The U.S. Court of Appeals for the District of Columbia Circuit ruled Tuesday that Democratic state attorneys general can defend crucial ObamaCare payments to insurers, as President Trump has indicated he may cut them off.

The court granted a motion that a coalition of 16 attorneys general — led by California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman — filed, according to a court order uploaded by Reuters.
It’s possible this decision could make it harder for the appeal to be dropped, healthcare experts suggested.

The Republican-led House filed the lawsuit in 2014, arguing that the cost-sharing reduction payments to insurers are illegal because Congress has not provided a specific appropriation for them.

{mosads}These payments are crucial for insurers, compensating them for covering some out-of-pocket costs for certain consumers. They total $7 billion for fiscal 2017, and regardless of whether the administration pays them, insurers would still be on the hook to offer these discounts to enrollees — they just wouldn’t be reimbursed for doing so.

Insurers have threatened to leave the ObamaCare market exchanges if the payments are not continued, which could potentially leave millions without healthcare coverage options during the transition.

“The states have shown a substantial risk that an injunction requiring termination of the payments at issue here … would lead directly and imminently to an increase in insurance prices, which in turn will increase the number of uninsured individuals for whom the states will have to provide health care,” the order stated.

The states also “raised sufficient doubt concerning the adequacy of the Department’s representation of their interests.”

The order was issued by a three-judge panel. All three judges were appointed by former President Obama, according to Reuters.

“The court’s decision is good news for the hundreds of thousands of New York families that rely on these subsidies for their health care,” 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 health care they ensure for millions of families across the country.” 

The ruling comes just days after Senate Republicans failed to pass a scaled-down version of ObamaCare repeal, and Trump threatened to end such payments.

“After seven years of ‘talking’ Repeal & Replace, the people of our great country are still being forced to live with imploding ObamaCare!” the president wrote in a tweet.

“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” he added.

The White House announced in July that key ObamaCare subsidies to insurers would be paid, but the administration did not make a commitment beyond July.

The administration has been making these payments on a monthly basis, and insurers have been asking for long-term certainty from Congress and the administration that they’ll continue to receive the funds. Kellyanne Conway, a White House adviser, said on “Fox News Sunday” that Trump will decide this week if he’ll cut off the payments.

Some conservatives decry the payments as bailouts for insurance companies.

But other Republicans want to ensure they’re paid to strengthen and stabilize the individual insurance marketplace for 2018. For instance, Sen. Lamar Alexander (R-Tenn.) — the chairman of the Senate Health Committee — and the panel’s top Democrat, Sen. Patty Murray (Wash.), announced Tuesday that their panel would hold bipartisan hearings the first week of September in an effort to hammer out a short-term stabilization proposal by mid-September.

Alexander said he’s urging Trump to continue the payments to insurers through September and that any stabilization plan should include a congressional appropriation for the funds.

Insurers are coming up on a time crunch, though. In late September, they sign contracts with the federal government saying they’ll offer plans in the ObamaCare exchanges.

Tags Lamar Alexander Patty Murray Xavier Becerra

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