The Obama administration appealed before Trump took office, leaving the new administration to ponder how to proceed.
House Republicans argued the Obama administration paid the subsidies – which help lower-income people afford out-of-pocket costs under the ACA – without an appropriation from Congress. Now the Trump administration must decide whether to continue or drop the appeal.
Molina Healthcare, which offers Obamacare plans in several states, warned earlier in May in a letter that a move by the Trump administration to cut subsidies, known as cost-sharing reductions (CSRs), could prove disastrous for Obamacare markets.
If the payments do stop, it could cause premium costs to swell – a reality that would likely deal significant political damage to Trump and Republican lawmakers heading into the 2018 midterm elections. The states say his threats are why they made a decision to file the motion, which would allow them to continue the appeal even if Trump dropped it.
At the same time, state insurance regulators – both Democrat and Republican – have increasingly concluded they can not count on the Trump administration to help them ensure that consumers will have access to a health plan next year.
“If successful, the suit could – to use the president’s expression – “explode” the entire act”, the filing says. “Now, events and statements, including from the president himself, have made clear that any such reliance is misplaced”. Insurance giant Aetna has bid hasta la vista to all of ObamaCare’s health insurance exchanges next year. The number of uninsured Americans would go back up, hurting vulnerable individuals and directly burdening the states.
“The impact of the elimination of these significant financial subsidies on the cost of health care can not be overstated”.
The 16 attorneys general, led by California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman, filed a motion to intervene in the case pending in the U.S. Court of Appeals for the District of Columbia Circuit.
“Because of an intervening presidential election, the current parties appear ready to agree to allow the injunction to stand, without giving this Court the opportunity to determine whether the district court had either jurisdiction to enter it or a legal basis to enjoin the permanent appropriation that Congress meant to provide”, the motion reads. “The states and their residents can not continue to rely on the executive branch to represent them in this appeal”.