- Win McNamee
President Donald Trump has repeatedly threatened to cut off a key subsidy for health insurers, a move experts say could cause Obamacare markets to explode. A court ruled that states could intervene in a court case to keep the payments funded. This doesn’t mean Trump can’t end the payments, but it makes it harder for him to do so and would put blame for any fallout squarely on his shoulders, experts say.
It became harder Monday night for President Donald Trump to help engineer the collapse of the Affordable Care Act.
A federal court ruled that attorneys general in 17 states and the District of Columbia would be allowed to intervene in a case over crucial subsidies known as cost-sharing-reduction payments.
Health-policy experts and insurance companies often cite uncertainty over the payments as the biggest danger to the short-term future of the individual insurance markets established by the ACA, the healthcare law better known as Obamacare.
The CSR payments help reimburse insurers for providing plans with low deductibles and low out-of-pocket costs for poorer Americans on the exchanges. Over the past few months, a slew of insurers and state insurance commissions reported that without the payments, premiums on the exchanges would increase substantially in 2018.
Under Obamacare, the payments came through an executive-branch order. The unusual appropriation became the subject of a lawsuit between the Republican-controlled House and the Obama administration, with the health and human services secretary as the defendant.
In 2016 a judge ruled in favor of the House, saying the CSR payments were illegal because Congress did not appropriate them. The Obama administration filed an appeal of that decision.
Trump and his team can decide whether to continue that appeal; pulling it would effectively cut off CSR payments unless Congress were to appropriate the funds.
But on Monday, the court ruled that the 17 states and DC could intervene and continue the appeal. The court’s ruling said ending the payments would be damaging to the states’ citizens.
Nicholas Bagley, a professor of health law at the University of Michigan, wrote on the Incidental Economist blog that this decision by the court made it harder for the Trump administration to cut off the CSR payments.
“If the Trump administration wanted to stop making cost-sharing payments, the easiest way to do so would be to dismiss the appeal,” Bagley said. “The lower court entered an injunction to stop those payments, but put its injunction on hold to allow for an appeal. If Trump were to order the appeal’s dismissal, the injunction would spring into force, and the payments would end.”
“Now the states can keep the appeal alive, even if Trump wants to get rid of it,” he added.
Bagley said a key element of the case – as with some court decisions surrounding the administration’s travel ban – was Trump’s own statements. Trump’s tweets threatening to cut off the payments supported the idea that the states faced enough danger that they deserved to take up the case.
“The States have filed within a reasonable time from when their doubts about adequate representation arose due to accumulating public statements by high-level officials both about a potential change in position and the Department’s joinder with the House in an effort to terminate the appeal,” the court’s decision said.
Bagley and Timothy Jost, a professor at the Washington and Lee University School of Law who supports the ACA, suggested the decision didn’t mean Trump couldn’t still try to end the payments. But the two agreed that ending the appeal would no longer be a definitive deathblow to the payments.
“The decision does not mean that the Trump administration is barred from ending the cost-sharing reduction payments,” Jost wrote at Health Affairs. “It does mean, however, that the administration cannot unilaterally stop the CSR payments, dismiss the appeal, and claim judicial imprimatur for its doing so.”
Trump could instruct the Justice Department to announce that it no longer thinks the payments are legal, according to Bagley, but any chaos caused by the move would fall squarely on his shoulders.