Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Health Insurance

Federal Judge May Keep ACA Subsidy Money Flowing

Your article was successfully shared with the contacts you provided.

A federal judge appears to be sympathetic to the idea of granting a temporary restraining order that would force the administration of President Donald Trump to continue to make Affordable Care Act cost-sharing reduction subsidy payments.

The judge, U.S. District Judge Vince Chhabria, has scheduled a hearing on the request for the restraining order for 2 p.m. Pacific Daylight Time Monday.

(Related: Lamar Alexander Keeps the Individual Health Rescue Fight Alive)

The Affordable Care Act cost-sharing reduction subsidy program helps low-income Affordable Care Act exchange plan users pay their deductibles, co-payments and coinsurance amounts. Officials with the Trump administration said last week that they do not believe they have a valid congressional appropriation to make the payments. They said they would withhold a round of payments insurers were expecting to receive this week.

Analysts at Avalere Health have argued that the mid-year subsidy cuts could cost issuers of individual major medical coverage about $1 billion between now and the end of the year, or about $167 for each of the people who use the subsidy.

A group of attorneys general from 18 states and the District of Columbia filed a request for a temporary restraining order at the U.S. District Court for the Northern District of California on Wednesday. The attorneys general asked the court to use the order to make the Trump administration keep up the subsidy payment stream.

The court has set up a public information page for the case here.

Chhabria, a judge nominated to the court by former President Barack Obama, set a tight schedule for the parties involved.

He told lawyers for the federal government to file their response by 9 a.m. PDT today, and for the lawyers for the states seeking the restraining order to file their reply by 10 a.m. PDT Saturday.

Any outside parties that want to comment must file their briefs by 10 a.m. PDT Saturday.

Chhabria gave lawyers for the federal government a long list of questions to answer, and those questions appear to imply that he is open to the idea of granting the state attorneys general request for the restraining order, but also open to hearing about past situations in which Congress has failed to make appropriations for expenditures required by federal statutes.

Scales of justice (Image: Thinkstock)

(Image: Thinkstock)

Here are Chhabria’s questions:

  • It appears that the federal government is now failing to meet its legal obligation, under the ACA, to reimburse insurance companies for covering co-payments and deductibles for low-income people (either because Congress failed to appropriate the money needed for those payments, or because the administration is refusing to make payments for which funds have been appropriated). Is there any reason to doubt that the insurance companies would prevail in a Tucker Act lawsuit to recover the required reimbursements?

  • If the insurance companies could indeed recover the reimbursements in a Tucker Act lawsuit, how does that affect the analysis of the merits and the balance of harms in this case?

  • It appears that rates already have been set for insurance that can be purchased on the exchanges beginning Nov. 1, 2017. It also appears that some insurance companies raised their premiums in anticipation of the likelihood they no longer would be reimbursed for covering deductibles and co-payments for low-income people. Can the administration provide a state-by-state breakdown (perhaps in a supporting declaration) explaining whether insurance companies have in fact already raised their rates based on the assumption that the reimbursements will stop?

  • And how do we know that the increases are related to the reimbursement issue, as opposed to something else?

  • How common is it for Congress to require (not just authorize, but require) expenditures by the executive branch without making a permanent appropriation for those expenditures?

  • If there are examples of Congress requiring expenditures without making a permanent appropriation, are there also examples of Congress having failed to make annual appropriations for the required expenditures, or has Congress always made annual appropriations to satisfy the federal government’s legal obligation to make the payments?

  • Has there been any litigation on this issue?

—-Read How the Survival of the Affordable Care Act Could Affect You on ThinkAdvisor.

— Connect with ThinkAdvisor’s Life/Health channel on
Facebook and Twitter.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.