A federal judge in San Francisco appears to be set to turn back a request from a group of Democratic states attorneys general looking to force the Trump administration to make hundreds of millions of dollars in Affordable Care Act cost-sharing reduction subsidy payments that insurers were expecting to get from now until the end of the year.
President Donald Trump announced on Oct. 11 that he would end federal payments for the subsidy program, pays insurers to cover out-of-pocket expenses and co-payments for about 7 million low-income people who use ACA public exchange plans.
California, New York, Connecticut, Pennsylvania, 14 other states and the District of Columbia earlier this month sued the administration, claiming the decision could cut off billions of dollars in subsidies and create chaos in ACA exchanges in the run-up to open enrollment, which is set to begin on Nov. 1.
But, at a court hearing Monday, U.S. District Judge Vince Chhabria of the Northern District of California, who is overseeing the case, said most states have anticipated the move and made changes to their insurance policies that will actually result in lower premiums for most low-income consumers purchasing insurance on ACA exchanges.
“It seems to me that California and the insurance companies have worked together to anticipate this and have worked on the assumption that this would happen,” Chhabria said of Trump’s move to cut off the payments. “To reverse course now seems like it would create further instability.”
Chhabria held off ruling at the end of the hearing, but said that he would issue a written ruling on Tuesday or Wednesday.
Chhabria said most states, anticipating the Trump administration’s move, developed a “clever” way to allow insurance companies to increase their rates in such a way that it would actually benefit consumers.