October 16, 2017

Nearly 20 states file suit to force Trump to reinstate CSR payments

Daily Briefing

Nearly 20 attorneys general on Friday announced a multistate lawsuit challenging the Trump administration's decision to halt the Affordable Care Act's cost-sharing reduction payments to insurers.

About CSR payments

Under the ACA, insurers receive cost-sharing subsidies to help them provide discounts on out-of-pocket costs to individuals with silver-level exchange plans whose annual household incomes are between 100 percent and 250 percent of the federal poverty level (FPL).According to ABC News, the cost-sharing subsidies, which were expected to total $7 billion this year, help reduce out-of-pocket costs for more than 6 million exchange enrollees.

President Trump last week decided to suspend the CSR payments, arguing that although the ACA envisioned the payments, Congress had never explicitly authorized funding for them. Several industry experts and insurers have warned that ending the payments could cause premiums to spike, particularly for those whose annual incomes are above 400 percent FPL and are not eligible for federal subsidies to help make coverage more affordable.

Lawsuit details

The lawsuit was filed in Friday in federal court in California by AGs from California, Delaware, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.

New York AG Eric Schneiderman (D) said, "We will be in court to defend these subsidies and fight this decision with everything we've got." He added that the lawsuit is based on the claim that the ACA "is the law of the land," and that the insurer payments are "a critical part of the ACA."

California AG Xavier Becerra in a statement said, "Taking these legally required subsidies away from working families' health plans and forcing them to choose between paying rent or their medical bills is completely reckless," adding, "This is sabotage, plain and simple. I and many of my attorney general colleagues will fight vigorously to ensure Californians and all Americans as taxpayers receive the healthcare the law provides."

Industry stakeholders, experts comment on the CSR payments

Several stakeholder groups raised concerns about the Trump administration's decision to halt the payments, MedPage Today reports.

American Medical Association President David Barbe called on Congress "to accelerate its efforts to reinstate these payments before further damage is done." He said, "This most recent action by the Administration creates still more uncertainty in the ACA marketplace just as the abbreviated open enrollment period is about to begin, further undermining the law and threatening access to meaningful health insurance coverage for millions of Americans. Our patients will ultimately pay the price."

America's Essential Hospitals President and CEO Bruce Siegel also raised concerns, saying, "This decision could leave many individuals and families with no options at all for affordable coverage."

America's Health Insurance Plans and Blue Cross Blue Shield Association in a joint statement said, "We need constructive solutions that increase consumer choice, lower consumer costs, and stabilize local markets. Terminating this critical program will do just the opposite."

However, some industry experts said the Trump administration made the right move legally, MedPage Today reports.

Doug Holtz-Eakin, president of the conservative American Action Forum, referring Trump said, "I honestly believe he had to do this." Holtz-Eakin said he expected the initial effect of the move to be "relatively small" as many insurers had already raised premium prices to account for the possibility that the CSR payments would be discontinued.

Jane Orient, executive director of the Association of American Physicians and Surgeons, also called the administration's decision a win for "the rule of law." Orient said, "The administration can't just spend money willy-nilly that Congress has not appropriated" (Mulvihill/Kennedy, AP/ABC News, 10/13; Vartorella, Becker's Hospital Review, 10/13; Mangan, CNBC, 10/13; Firth, MedPage Today, 10/13).

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