President Trump has long brandished a weapon that could undermine key aspects of the Affordable Care Act, even if Congress failed to repeal the law: A threat to withhold subsidies that cover out-of-pocket health care costs for low-income people.
But days after a defeat in the Senate left repeal efforts moribund, a federal court ruling has blunted that weapon.
The District of Columbia Court of Appeals ruled Tuesday evening that 16 attorneys general — including Maura Healey of Massachusetts — could intervene in a lawsuit involving those subsidies, known as cost-sharing reductions.
That means the coalition of 15 Democratic states and Washington, D.C., can appeal a ruling or block a settlement in the suit.
“The D.C. Circuit Court’s ruling is a win for states and a major hit to the Trump administration’s efforts to sabotage the Affordable Care Act,” Healey said in a statement Wednesday. “With the court’s decision, the states won the right to defend payments that help millions of Americans access affordable health insurance.”
The suit dates to the Obama administration, when Republicans in Congress alleged that the subsidies are illegal because Congress never approved the expenditure. A federal district court agreed with the Republicans, and the Obama administration appealed. The ruling was put on hold until the administration’s appeal ran its course.
The subsidies — expected to total $9 billion nationally and $104 million in Massachusetts in 2017 — are paid directly to health insurers to reimburse them for covering the deductibles and other out-of-pocket costs of lower-income consumers.
These payments are considered critical because insurers need to know whether they will receive the money when they set premiums. If the subsidies aren’t coming, insurers most likely will have to raise premiums substantially to cover the cost.
Felice J. Freyer can be reached at email@example.com.