A federal court in California has struck down an emergency motion that would have forced the Trump administration to continue making ObamaCare subsidy payments to insurers.
U.S. District Judge Vince Chhabria denied the motion for an injunction, saying that he was skeptical that cutting off the payments known as cost-sharing reductions (CSR) would cause an immediate injury to residents of the state.
He noted many states, including California, saw “the writing on the wall” and took actions to mitigate any potential harm if the payments were ended.
“To be sure, the absence of money for CSR payments does not seem to be causing health care reform to come crumbling down,” Chhabria wrote in his ruling.
California allowed insurers to add a surcharge to the mid-level silver plans, which increases the amount of tax credit subsidies available. So even though premiums would spike for silver plans, consumers would have other, cheaper options.
Eighteen states and Washington, D.C., signed onto the motion for a temporary restraining order that would have forced the administration to keep making the payments while a lawsuit worked its way through the courts.
Trump cut off the payments earlier this month, which are required under the law and help low-income people afford co-pays and deductibles.
The payments were the subject of a lawsuit by House Republicans during the Obama administration. A federal court ruled the payments were being made illegally, but the Obama administration appealed.
Congress could still decide to appropriate the payments, and there is some bipartisan agreement that they should be made. Bipartisan legislation funding the payments for two years has been introduced in the Senate by Sens. Lamar AlexanderAndrew (Lamar) Lamar AlexanderChildren’s health-care bill faces new obstacles Overnight Health Care: Schumer calls for tying ObamaCare fix to children’s health insurance | Puerto Rico’s water woes worsen | Dems plead for nursing home residents’ right to sue Schumer calls for attaching ObamaCare fix to children’s health insurance MORE (R-Tenn.) and Patty MurrayPatricia (Patty) Lynn MurrayChildren’s health-care bill faces new obstacles Overnight Health Care: Schumer calls for tying ObamaCare fix to children’s health insurance | Puerto Rico’s water woes worsen | Dems plead for nursing home residents’ right to sue Schumer calls for attaching ObamaCare fix to children’s health insurance MORE (D-Wash.).
But there likely won’t be any action on the bill until the end of the year. It hasn’t yet been endorsed by President Trump or House and Senate leadership, as many Republicans are hesitant to vote for what they see as a bailout of ObamaCare.
Chhabria noted Wednesday that it was a complicated question as to whether Congress intended there to be a permanent appropriation, but said the absence of one “may be in significant tension with congressional purpose.”
Chhabria said the ability of states to act in advance and shield consumers undercuts the argument that people will face higher premiums because the cost-sharing payments are ending.
He suggested if states are so concerned that people will be scared away from signing up for insurance on the exchanges because of the thought of higher premiums, they should “stop yelling about higher premiums.”
“With open enrollment just days away, perhaps the states should focus instead on communicating the message that they have devised a response … that will prevent harm to the large majority of people while in fact allowing millions of lower-income people to get a better deal on health insurance in 2018,” he wrote.
Updated: 5:24 p.m.