Appellate Court decision allows states to defend ACA’s cost-sharing reductions.
A Washington, D.C. appellate court ruled that state’s attorneys general have legal standing to sue to receive the Affordable Care Act’s cost-sharing reduction subsidies.
The decision adds some clarity and relief to state-level officials as President Trump threatens to withhold the CSR payments, a decision that experts argue would send insurance exchanges into a “death-spiral.”
CSR payments are paid to insurers monthly with the next installment due August 21, 2017.
By August 27, insurers must sign contracts with the government to sell products on the exchange with final contracts signed September 27.
CSR payments are fundamentally important to individuals and families who get insurance on the exchange. The subsidies reduce deductibles, premiums and out-of-pocket expenses for people making between 133 and 250 percent of the Federal Poverty Line.
The court’s decision said the 16 state’s attorneys general could intervene in an on-going case, House v. Price, in which the U.S. House of Representatives argues that the CSR payments are illegally paid by the executive branch. A District Court sided in favor of the House and the Obama administration filed an appeal. The case is on hold in a D.C. Circuit Court.
The bipartisan group of state attorneys general asked the court for permission to intervene, citing the Trump administration did not sufficiently represent the interest of the states in court.
The court said states can intervene in House v. Price because not paying will result in higher premiums and more uninsured.
Read more in Modern Healthcare
Read more in the Washington Post
For a forecast of what could happen if Trump refuses to fund CSRs from Health Affairs