Judge denies request to block Trump from halting ACA insurer subsidies

A federal judge in California denied the request of 19 attorneys general to force the immediate reinstatement of the Affordable Care Act (ACA)’s cost-sharing reduction subsidies to insurers, which were cut off by President Donald Trump.

The suit had argued halting the payments was a refusal by Trump to comply with federal law “in a way that will hike the cost of care for millions of Americans.” The stance from Trump and HHS was the payments, known as CSRs, couldn’t legally be made due to a district court ruling on an Obama-era lawsuit from Republicans in the U.S. House of Representatives that determined the payments required an appropriation from Congress.

U.S. District Judge Vince Chhabria in San Francisco wrote in denying the request that emergency relief while the lawsuit works through the courts isn’t needed because state regulators “have been working for months to prepare for the termination of these payments.” While he mentioned both the Obama and Trump administrations have argued the House “never had standing to bring the lawsuit challenging the CSR payments in the first place,” he also wrote the administration has the “better argument at this stage.”

“In sum, the Affordable Care Act requires the federal government to pay insurance companies to cover the cost-sharing reductions. The federal government is failing to meet that obligation,” Chhabria wrote. “If there was no permanent appropriation in the Act, Congress is to blame for the failure, because it has not been making annual appropriations for CSR payments. The Administration cannot fix Congress's error, because the Constitution prevents the Administration from making payments on its own.”

Chhabria also chastised the states’ argument that cutting off the payments confuses ACA exchange customers who are about to select health plans for 2018. He said if states are so worried about enrollees being scared away from the exchanges, “perhaps they should stop yelling about higher premiums.”

California Attorney General Xavier Becerra said in a statement that despite the court’s refusal to quickly reinstate the payments, he and the other plaintiffs will continue with the case.

“The fight for affordable healthcare moves forward,” Becerra said. “The actions by the Trump Administration undermine critical payments that keep costs of healthcare affordable for working families. The judge made clear in his ruling that the ACA is the law of the land. Without an emergency order halting the Trump action, swift action in this litigation becomes even more compelling.”

The next scheduled meeting in the case will be a phone conference on Nov. 21.

On the same day the ruling was handed down, the Congressional Budget Office said legislation to fund the CSR payments for two years would actually save the federal government money, reducing the deficit by $3.8 billion.