States seek to intervene in House Republicans' cost-sharing payments lawsuit
As insurers sweat over whether the Trump administration will continue funding cost-sharing subsidies for low-income enrollees, 16 state attorneys general have asked a federal appeals court to let them intervene in a legal case to keep those payments flowing.
On Thursday, attorneys general from both Republican- and Democratic-led states filed a motion to intervene in House v. Price, a case originally brought by House Republicans to block federal payment to insurers to fund the Affordable Care Act's cost-sharing reductions for low-income exchange plan members.
The U.S. Court of Appeals for the District of Columbia Circuit is scheduled to hear a status report in the case on May 22. Meanwhile, insurers around the country, citing uncertainty about the cost-sharing reduction payments, have filed requests for 2018 premium hikes in the double digits. The CSR payments are estimated to total $7 billion this year.
The state attorneys general argue that the Trump administration is not adequately representing their interests in the appeal of a May 2016 district court ruling that the Obama administration unconstitutionally made the payments without congressional appropriations. The district court judge allowed the payments to continue while the appeal proceeded.
The state attorneys general claim their states' interests would be gravely harmed if the CSR payments stop because many insurers would exit the individual insurance market, premiums would spike, many of their residents would be left uninsured, and state and local governments would face heavy costs in paying for medical care for the newly uninsured people.
"Failure by the federal government to make payments for the remainder of 2017 will harm the financial condition of health insurers in Washington state and be devastating for many consumers," said Washington state insurance commissioner Mike Kreidler, a Democrat who joined the motion.
The Trump administration has sent mixed signals on whether it intends to continue paying the subsidies, with President Donald Trump recently warning that he might cut off the funding. The House GOP bill to repeal and replace the Affordable Care Act would continue the CSR payments until 2020 but would not appropriate those funds, leaving insurers uncertain whether they would receive the payments.
The Obama administration argued in its appeal that House Republicans lacked standing to bring the original suit, because U.S. Supreme Court precedent holds that political disputes between the executive and legislative branches should be resolved through political mechanisms, not through the courts.
But it's not clear what position the Trump administration will take in the appeal or whether it will even continue fighting the district court ruling.
Tim Jost, an emeritus law professor at Washington and Lee University who supports the Affordable Care Act, said he believes there's a reasonable chance the D.C. Circuit will grant the motion to intervene. "They have a much better argument for standing than the House does," he said.
But an attorney who wrote an amicus brief challenging the ACA doubted the D.C. Circuit panel would grant the motion to intervene. Josh Blackman, an associate professor of law at the South Texas College of Law, said the appeals court is likely to keep the case on hold while congressional Republicans move to repeal and replace the ACA.
"Once a new bill is passed, the case is moot," he said. "If no new bill is passed, then the House may decide to drop the suit altogether."
The states seeking to intervene in the case are California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Vermont, Washington and the District of Columbia.
If they win the right to intervene, the states will argue that the House Republicans' legal challenge to the federal payments should be dismissed for lack of standing, Jost said.
But if the Trump administration decides on its own to stop making the payments, he said a new lawsuit would have to be filed to compel payment under the provisions of the Affordable Care Act.
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