Judge blasts suit seeking reinstatement of federal health subsidies

By Sudhin Thanawala Associated Press 

SAN FRANCISCO — California and 18 other states, including Massachusetts, asked a federal judge Monday to force the government to keep paying subsidies under the Obama health care law while an appeal of the Trump administration’s cutoff of the subsidies works its way through the courts.

But US District Judge Vince Chhabria noted that the states have protected consumers from the administration’s decision to end the subsidies, so people don’t face an immediate threat of higher costs. Chhabria did not issue an immediate ruling on the states’ request.


State attorneys general, led by California Democrat Xavier Becerra, argue the monthly payments are required under former president Barack Obama’s health care law, known as the Affordable Care Act, and stopping them will hurt consumers.

The cost-sharing payments are designed to reduce out-of-pocket costs for lower-income people. President Trump halted the subsidies earlier this month, criticizing them as insurance company bailouts.

California and other states had anticipated the subsidies would end and found a way to ensure consumers would not pay more for insurance, Chhabria said during a hearing.

The states limited the plans for which insurance companies could hike premiums, ensuring that many people would receive additional tax credits for health care purchases, the judge said.

The Obama appointee peppered an attorney for California with questions about why he should force the administration to resume payments when there was no immediate harm to consumers.


‘‘The state of California is standing on the courthouse steps denouncing the president for taking away people’s health care, when the truth is that California has come up with a solution to that issue that is going to result in better health care for a lot of people,’’ he said.

The White House says the government cannot legally pay the subsidies because there is no formal authorization from Congress.

However, the administration had been making the monthly payments even as Trump threatened to cut them off to force Democrats to negotiate over health care. A bipartisan effort in Congress to restore the payments has run into opposition.

The payments reimburse insurers for the costs of lowering copays and deductibles, which they are required to do for low-income customers who buy coverage through the health care marketplaces created by the Obama law.

The states argue that the Trump administration violated a law requiring government agencies to obey existing statutes and follow orderly and transparent procedures.

Democratic attorneys general have pushed back against Trump’s agenda in the federal courts, looking to block the president’s attempts to roll back Obama’s policies on the environment, health care, and immigration.


In addition to Massachusetts, the states joining California in the lawsuit are: Connecticut, Delaware, Illinois, Iowa, Kentucky, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, along with the District of Columbia.

In a separate development Monday, Iowa officials withdrew a proposal that sought to pull out of the Affordable Care Act and redirect federal money toward lowering premiums for younger participants under a separate program.

If the Trump administration had approved Iowa’s waiver request, it would have been the first to create a state-run alternative to the health exchanges required under the federal law.

Insurance premiums in the state marketplaces are based largely on income, but Iowa’s proposal would have made age a factor as well. Officials argued that would make the policies more attractive for younger, healthier residents, although some older residents may have been hit with even higher costs.

Iowa Insurance Commissioner Doug Ommen said he learned from US Department of Treasury officials last week that it would be several weeks before they could provide estimates about how much money the state would receive from the federal government to run its program.

It decided to withdraw because open enrollment for next year begins in nine days and there wasn’t enough time, Ommen said.

Because of high costs, only one company chose to offer coverage next year in the Iowa exchange — Minnesota-based Medica — but that was only if it could increase rates by 58 percent for existing customers. Individuals buying insurance from other companies will see even higher rate increases. Those insured by Aetna, for example, will see rates double, Ommen said.