15 States Go To Court Against Congress In Effort To Save Obamacare Subsidies

Image courtesy of MeneerDijk

Three years ago, the House of Representatives sued then Secretary of Health and Human Services Sylvia Burwell in an attempt to end an Affordable Care Act provision that providers federal payments to insurance companies to reduce policyholders’ out-of-pocket costs like co-payments and deductibles. That lawsuit is still being sorted out by a federal appeals court, but with a new White House and HHS Secretary publicly committed to ending these payments, attorneys general from 15 states and the District of Columbia are attempting to step in.

The question at the heart of the House GOP lawsuit involves Congressional approvals for these payments, which will total around around $7 billion this year. In May 2016, the U.S. District Court in D.C. ruled against the Obama administration [PDF], finding that Congress had not explicitly approved these subsidies.

However, the judge did not gut this part of the Affordable Care Act. Instead, it was allowed to remain in place pending appeal. The ruling was appealed, but again put on hold after Donald Trump was elected President.

Pointing to the President’s open disdain for the Affordable Care Act — including his recent comment that he should just let it “explode” — these attorneys general argue that Trump’s new HHS Secretary Tom Price, a member of the House when the lawsuit was filed and the author of previous ACA repeal legislation, can not be relied upon to represent the interests of the 20 million or so Americans who could lose coverage if these subsidies vanish.

Led by New York Attorney General Eric Schneiderman and California’s Xavier Becerra, the states have filed a motion [PDF] with the court, asking to intervene in the case.

Becerra points out that his state’s uninsured population has dropped from 17% to 7.1% since 2013. While the uninsured rate in New York has been cut in half (from 10% to 5%) during the same time period.

Joining New York and California in the request are the AGs from Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, Washington, and the District of Columbia.

The court does not need to grant the states’ request to intervene, and their efforts may be rendered moot if Congress is able to pass legislation that would repeal or significantly alter existing Affordable Care Act provisions. The House narrowly passed the American Health Care Act, its version of an Obamacare replacement earlier this month. The AHCA now sits with the Senate where it could undergo significant change.

If Congress is unable to pass a replacement measure, these subsidies may still be in doubt. As Reuters notes, President Trump has reportedly threatened to cut these payments off in order to compel legislative action.