Health

States Suing Trump To Get ‘Unconstitutional’ Obamacare Subsidy Money

REUTERS/Carlos Barria

Daily Caller News Foundation logo
Robert Donachie Capitol Hill and Health Care Reporter
Font Size:

States are so upset with President Donald Trump for cutting off Obamacare subsidy payments that they are trying to coax a federal judge to force the administration to keep paying them out.

Some 18 states and the District of Columbia are asking for the federal court in California to order the administration to fund Obamacare subsidies, also known as cost-sharing reductions (CSRs), Axios reports. The move would be in addition to a lawsuit the states filed last week to stop Trump from halting the payments.

The Trump administration announced last week that it will no longer fund Obamacare subsidies. The federal government was slated to pay out around $7 billion in CSRs in 2017.

The administration is following the Republican line of thinking that these subsides are a “bailout” for insurance companies.

“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” the White House said in a statement. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

The states’ lawsuit makes an argument against a 2014 GOP lawsuit that claims Obamacare subsidies are “unconstitutional.”

Under the leadership of former Speaker of the House John Boehner, the House filed suit against the Obama administration in 2014, claiming it was illegally reimbursing marketplace insurers for CSRs.

Boehner, along with House leadership, felt that CSRs required an annual appropriation approved by Congress. The House argued that because Congress had never explicitly appropriated the funds for those payments, the administration’s actions were unconstitutional. After nearly two years of deliberation, Senior Judge of the U.S. District Court for the District of Columbia Rosemary M. Collyer concluded the House’s claim had legal standing and allowed the case move forward on May 12, 2016.

The states filing suit against the Trump administration argue that Congress appropriated the money to fund CSRs, but the federal judged reached the opposite conclusion.

The lawsuit is effectively dead after Trump announced these payments would cease, a health care lobbyist told The Daily Caller News Foundation.

One of the glaring problems with abruptly stopping CSR payments is that it will likely lead to skyrocketing premiums for Obamacare enrollees. Roughly half of the consumers who purchase health insurance through Obamacare qualify for cost-sharing reductions. Obamacare consumers saw their out-of-pocket costs lower by over $1,000 through these subsidies.

Consumers are already facing double-digit premiums under Obamacare, but stopping the subsidies for insurance companies means the costs that insurers are not getting covered from the government will be transferred to the consumer.

When insurance providers signaled they would drop out of the Obamacare market altogether in 2017, one of their primary concerns was whether or not Trump would continue paying out these subsidies. Providers caked in the possibility that Trump would stop these payments in their 2018 offerings, but the uncertainty is still very real for 2019.

Follow Robert on Twitter

Send tips to robert@dailycallernewsfoundation.org

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.