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 so, the law provides for monthly payments "equal to the value of the reductions."
In 2014, after the health care law first took full effect, the Republican-majority Congress did not appropriate money to make those 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 D.C. Circuit.
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 are expected to raise premiums for some health plans.
The 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.)
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