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Federal judge appears unlikely to block Trump's action on Obamacare

Maura Dolan and David Lauter, Los Angeles Times on

Published in Health & Fitness

Other Republicans have supported the compromise move, in part because the people most likely to be hurt by cutting off the insurance payments are a largely Republican constituency -- middle- and upper-income working people who do not get insurance coverage from an employer.

The money at issue, known as cost-sharing reduction payments, has been one of the more controversial elements of the Affordable Care Act, denounced by Trump and other Republicans as a "bailout" for insurance companies.

In fact, almost the opposite is true -- the federal government will pay more to insurers without the cost-sharing payments than with them because of the way the health care law works, according to the nonpartisan Congressional Budget Office. Eliminating the payments would cost the government roughly an extra $20 billion a year, the budget office estimated in August.

Under the health care law, insurers are required to provide low-income customers with health plans that have reduced deductibles and co-pays. To reimburse insurers for the cost of doing that, the law directs the government to make monthly payments "equal to the value of the reductions."

Without the payments, insurers would still be required to offer health plans with low deductibles and co-payments. To make up for the cost, they have generally raised premiums for the so-called silver plans offered on the Obamacare marketplaces.

Insurance officials around the country have estimated that on average, premiums are increasing by about 20 percent, but the amount varies widely from one part of the country to another.

Most health care consumers who buy insurance on the individual market will be protected from those increases because they receive federal help to pay for insurance premiums. But those whose incomes are too high to get that assistance will feel the impact. An attorney from Becerra's office said 2.1 million people across the country would be hit.

While the premium increases may solve the immediate problem, ending the payments eventually could cause some insurers to quit the market altogether, officials in several states, patient advocates and insurance industry executives have said.

The payments have been the subject of a separate court battle over their legal status. In 2014, after the health care law first took full effect, the Republican-majority Congress did not appropriate money to make the payments.

The Obama administration decided that the language of the law constituted a so-called permanent appropriation, which allowed it to make the payments without further congressional action, similar to the way many other government benefit programs are funded.

Republican lawmakers went to court and won a ruling last year from a district judge in Washington that the payments were illegal. That ruling has since been put on hold pending further action in the case before the court of appeals. That case has been on hold since Trump's election.

The current lawsuit was filed by attorneys general in California, Connecticut, Delaware, the District of Columbia, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and the state of Washington.

(Dolan reported from San Francisco and Lauter from Washington, D.C.)

(c)2017 Los Angeles Times

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Distributed by Tribune Content Agency, LLC.

 

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