Judge Refuses To Block Cost Sharing Cut-Off

SAN FRANCISCO - A federal judge in California refused to block President Donald Trump's decision to cut off cost sharing reduction payments to health insurers.

U.S. District Judge Vince Chhabria in San Francisco sided with the Trump administration, saying the government does not have to make the payments while a lawsuit over the subsidies unfolds.

The attorneys general of 19 states filed suit to force the government to keep making the payments while the case works its way through the courts, which will take months.

The states argue the monthly payments are required under the Affordable Care Act, and stopping them will hurt consumers.

The cost-sharing payments aim to reduce out-of-pocket costs for lower-income people. President Donald Trump halted the subsidies earlier this month, criticizing them as insurance company bailouts.

The White House says the government cannot legally pay the subsidies because there is no formal authorization from Congress.

However, the administration had been making the monthly payments even as Trump threatened to cut them off to force Democrats to negotiate over health care. A bipartisan effort in Congress to restore the payments has run into opposition.

The payments reimburse insurers for the costs of lowering co-pays and deductibles, which they are required to do for low-income customers who buy coverage through the health care marketplaces created by Obama's law.

The states argue that the Trump administration violated a law requiring government agencies to obey existing statutes and follow orderly and transparent procedures.

Democratic attorneys general have pushed back against Trump's agenda in the federal courts, looking to block the president's attempts to roll back Obama's policies on the environment, health care and immigration.

The states joining in the lawsuit are: California, Connecticut, Delaware, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, along with the District of Columbia.

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]. Follow her on Twitter @INNsusan.

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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].