Federal Judge Refuses to Force Trump Administrarion to Pay Obamacare Insurance Subsidies

A federal judge denied a request to immediately force the Trump administration to continue making the Obamacare insurance subsidy payments that it cut off earlier this month.

U.S. District Court Judge Vince Chhabria on Wednesday ruled against issuing an emergency order requiring the payments be restored while a lawsuit filed by 18 states and the District of Columbia in federal court in San Francisco over the the so-called cost-sharing reduction program works its way through the courts.

Chhabria, an Obama appointee, failed to see the immediate threat to consumers that would require him to compel the federal government to make the payments, particularly because states led by California have devised a work-around plan to mitigate the harm.

In his 29-page ruling, Chhabria wrote that “because of the measures taken by the states in anticipation of a decision by the Administration to terminate CSR payments, the large majority of people who purchase insurance on exchanges throughout the country will either benefit or be unharmed. In particular, many lower-income people stand to benefit.”

The payments lower out-of-pocket costs for about 7 million Obamacare customers earning less than 250 percent of the federal poverty level, or about $30,150 for an individual and $61,500 for a family of four. About $6 billion of the $7 billion in payments due this year was made before President Donald Trump halted the money, according to insurance regulators.

Insurers are required to discount Obamacare customers’ bills even without the federal payments. Health plans were expected to either stop selling coverage or raise rates as much as an estimated 20 percent to account for the lost payments. In a bid to stabilize the individual insurance markets, at least a dozen Senate Republicans have signed onto bipartisan legislation that would extend the payments for two years.

Even had the judge ordered the payments to continue, the administration said it still has discretion about when to make the payments. Administration lawyers have noted that the law doesn’t actually require that the payments be made on any specific schedule, but simply that they be “periodic and timely.” The administration had been making the payments on a monthly basis before cutting them off.

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SOURCE: Politico, Adriel Bettelheim and Victoria Colliver