States can intervene to prevent GOP subterfuge on ‘Obamacare’ cost sharing reduction subsidies

There is a status report due to the D.C. Circuit Court of Appeals later this month in the case of House v. Price (née House v. Burwell), a bizarre lawsuit that could still blow up the ACA insurance markets:

House v. Price offers a back door to undoing Obamacare’s exchanges.

To destabilize the ACA insurance markets, all the administration would have to do is dismiss its appeal and stop fighting the case. At that point, the district court’s injunction — its order to stop making the illegal cost-reimbursement payments —would spring into effect.

Faced with enormous financial losses, many insurers would flee the market. Recall that the Affordable Care Act would still require insurers to cut their low-income enrollees a break — it’s just that insurers wouldn’t get reimbursed. The only way to make the numbers work would be to jack up premiums on everyone. In that scenario, the Urban Institute estimates that premiums would rise, on average, by $1,040, and that hundreds of thousands of people would lose coverage.

On Tuesday, the court permitted a coalition of state attorneys general to intervene in the lawsuit to prevent this GOP subterfuge between president Trump and the Tea-Publican Congress to sabotage “Obamacare.” Court ruling could help keep Obamacare subsidies:

A federal appeals court issued a ruling Tuesday that could help preserve a key subsidy that benefits health insurers and millions of Americans under the Affordable Care Act. The ruling could make it more difficult for the White House to carry out recent threats by President Trump to cut off the payments, giving legal standing to a new set of the payments’ ­defenders.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that a coalition of 16 state attorneys general, all of whom want to preserve the subsidies, may intervene in the appeal of a lawsuit over the fate of cost-sharing subsidies — payments the government makes to insurers on behalf of about 7 million low-income Americans who receive breaks on their health plans’ deductibles and other out-of-pocket costs.

Led by the Democratic attorneys general of New York and California, the motion that the court granted is the most recent twist in the gnarled legal and political history of the subsidies. In practical terms, the ruling could make it more difficult for the Trump administration and House Republicans to abandon the payments without a court fight.

In the days since Senate Republicans failed to pass legislation that would have overturned much of the ACA, the future of the cost-sharing payment has emerged as a major issue, with insurers saying that they would markedly raise their prices for next year in the ACA’s marketplaces — or stop selling such health plans altogether — unless the subsidies continue.

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Since Trump took office, it has been unclear whether the new administration would simply drop the appeal, leaving the lower court ruling intact and thus have no basis for paying the subsidies unless Congress acted to provide the money. Twice, the administration and the House have told the court they want to defer the question while they tried to reach a legislative solution. The next court date is later this month.

New York Attorney General Eric Schneiderman said Tuesday night that “this coalition of attorneys general stands ready to defend these vital subsidies and the quality, affordable health care they insure for millions of families across the country.”

The Court just defused president Trump’s “nuclear option” to blow up “Obmacare.” The coalition of state attorneys general can now continue this lawsuit, which many legal experts believe was wrongly decided by a favorable district court judge (forum shopping), and to argue to overturn the district court decision.