Government out of the healthcare insurance business.
A federal judge won’t force the Trump administration to continue paying Obamacare insurers after he was skeptical about whether customers would be harmed by the abrupt cancellation.
The decision by a California federal court Wednesday means the payments will not be resumed while a lawsuit from 18 Democratic-led states is argued before the federal courts. The lawsuit from the attorneys general asked for an immediate injunction to keep the payments flowing. President Trump cut them off starting Oct. 18.
Federal Judge Vince Chhabria said in the order that the emergency relief the states want could be counterproductive.
“State regulators have been working for months to prepare for the termination of these payments,” he wrote. “And although you wouldn’t know it from reading the states’ papers in this lawsuit, the truth is that most state regulators have devised responses that give millions of lower-income people better health coverage options than they would otherwise have had. This is true in almost all the states joining this lawsuit.”
The cost-sharing reduction payments reimburse insurers for reducing out-of-pocket costs for low-income Obamacare enrollees. Insurers are required to lower co-pays and deductibles for those customers, so without the payments they likely will raise premiums to recoup the costs.
Without those payments, insurers could raise Obamacare premiums nearly 20 percent, according to some estimates.
The payments were the subject of a legal fight between the Republican-controlled House and the Obama administration. The House sued in 2014, saying the payments were illegal since Congress had not appropriated them.
The payments have been made under a mandatory appropriation without the need for congressional approval, similar to Obamacare’s income-based tax credits to lower insurance costs.
A federal judge ruled last year that the cost-sharing payments did need a congressional appropriation, partly because of the shoddy drafting of the law.