A U.S. appeals court allowed the attorneys general from 17 Democratic states to defend subsidy payments to health insurers under the Affordable Care Act. These subsidies are a critical part of funding for the health care law and one that President Donald Trump has threatened to cut off.
The U.S. Court of Appeals for the District of Columbia Circuit granted the motion.
These so-called cost-sharing subsidy, or CSR, payments have been in doubt since Trump threatened to stop billions of dollars in government payments to insurers and force the collapse of "Obamacare." The subsidies help cover out-of-pocket medical expenses for low-income Americans.
The order issued by the three-judge panel, all Obama appointees, said the states had shown "a substantial risk that an injunction requiring termination of the payments at issue here ... would lead directly and imminently to an increase in insurance prices, which in turn will increase the number of uninsured individuals for whom the states will have to provide health care."
"In addition, state-funded hospitals will suffer financially when they are unable to recoup costs from uninsured, indigent patients for whom federal law requires them to provide medical care," the court order said.
The "cost-sharing" subsidies are under a legal cloud because of a dispute over whether the Obama health care law properly approved the payments. Other parts of the health care law, however, clearly direct the government to reimburse insurers.
With the issue unresolved, the Trump administration has been paying insurers each month, as the Obama administration had done previously.
If Trump stops the payments, insurers could sue in the U.S. Court of Federal Claims, which hears claims for money against the government.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].
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