Judge denies urgent request to force Trump administration to resume paying Obamacare insurers

Kevin Lamarque | Reuters
President Donald Trump smiles after signing an Executive Order regarding health insurance plans at the White House in Washington, October 12, 2017.

A federal judge Wednesday rejected a request that he order the Trump administration to immediately resume paying Obamacare insurers key subsidies that the government cut off in recent days.

Judge Vince Chhabria’s decision came after a coalition of more than a dozen states last week asked for an emergency order blocking the administration’s move to cease paying the insurers.

Chhabria denied that bid two days after holding a hearing in U.S. District Court for the Northern District of California and hearing arguments from lawyers for the states and for the Trump administration.

However, the case by the states will continue in that court. And it could ultimately lead to restoration of the so-called cost-sharing reduction payments.

At the same time, a bipartisan group of U.S. senators is pushing a bill that would restore the payments to insurers.

“Although the case is at an early stage, and although it’s a close question, it appears initially that the Trump administration has the stronger legal argument,” Chhabria wrote in his decision.

He pointedly noted that despite the claims by the plaintiffs, most states have taken steps that will protect many consumers from the termination of the payments, in the short term.

Those steps will, in many cases, lead to consumers either not paying any more for their health plans next year than they now do, or to actually paying less.

Chhabria was appointed to his seat by President Barack Obama, who had pushed for passage of the Affordable Care Act, as Obamacare is formally known.

At issue are billions of dollars in federal payments that health insurers had received to compensate them for discounts given low-income Obamacare customers for their out-of-pocket health costs. The discounts are mandated by law and will continue, despite the loss of the reimbursements to insurers for them.

The Trump administration on Oct. 12 said it was cutting off those payments, effective last Friday, because the money for them had not been separately appropriated by Congress. President Donald Trump for months had threatened to end the payments, which had been made by the Obama administration since 2014, when Obamacare health plans first took effect.

The House in 2014 sued the Obama administration, claiming the reimbursements were illegal given the lack of congressional appropriation. A federal judge ruled in the House’s favor last year, but her decision was stayed by an appeal of her ruling.

The coalition of 18 states and the District of Columbia that sued the Trump administration in an effort to restore the payments has argued that the Affordable Care Act itself authorizes the payments to be made by the government.

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