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Trump Seeks Further Delay in Health Care Subsidy Lawsuit

Insurance plans, Democrats say uncertainty will continue

Senate Minority Leader Charles E. Schumer said the administration's actions will lead to more uncertainty in the health insurance markets. (Tom Williams/CQ Roll Call)
Senate Minority Leader Charles E. Schumer said the administration's actions will lead to more uncertainty in the health insurance markets. (Tom Williams/CQ Roll Call)

The Trump administration again delayed a decision in a major case that could upend the health insurance markets created by the 2010 health care law, in a motion filed in federal court Monday.

Justice Department lawyers asked in the motion for another 90-day delay in a case that centers on about $7 billion of annual subsidies that are aimed at making health care services more affordable for low-income people who gained coverage under the 2010 law.

“The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action,” lawyers for both the House of Representatives and the Trump administration wrote in the brief.

The payments are “critical” to the success of the health marketplaces established by that law, insurance companies have testified to Congress. Without them, many insurers have warned they will stop selling plans in 2018. At least one major insurer, Molina, has said it would immediately drop its health care marketplace plans.

Those companies will have to wait at least another 90 days for a final word on whether the payments will continue.

“We need swift action and long-term certainty on this critical program,” said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, the industry lobbying group. “It is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care.”

The delay buys both the Trump administration and congressional Republicans more time to decide exactly how to deal with the payments, a decision wrapped up in the party’s ongoing effort to repeal and replace the 2010 health care law. Senators, who are in the beginning stages of writing their own repeal and replace package, have admitted that the process could take months or more.

The bill that narrowly passed the House this month would have eventually repealed the payments entirely, but some GOP lawmakers in both chambers have pushed for an explicit appropriation of the payments in the short-term as a way to stabilize the marketplaces.

The payments are in jeopardy after the House sued President Barack Obama in 2014 for paying the subsidies without a proper appropriation from Congress, they argue. A federal judge sided with the House last year. The Obama administration appealed the decision and President Donald Trump inherited it.

The Trump administration has been making the payments month-by-month in the interim, just as his predecessor did as the court case unfolded. But Trump officials have been cagey about promises for future payments. In April, they would only commit to one more month’s payment, and declined to comment on exactly what payment they referred to when pressed.

Though the delay may be welcome politically, insurers were quick to decry it as bad policy. The delay leaves them facing uncertainty about a major aspect of the 2010 health care law’s funding, just as they must file their proposed 2018 health insurance premiums with state and federal policymakers. Some state deadlines for those proposals have already passed. The federal deadline is June 21.

The 90-day delay will force the companies to guess about the premiums they need to charge to cover the costs of insuring the individual market population. Regulators reviewing those rates will also have to speculate about whether the subsidies will remain in place. Some companies have suggested the uncertainty could force them to increase premiums by as much as 20 percent.

Rates for the 2018 plan year are finalized throughout the fall according to various state and federal deadlines.

“We are heartened by the request to postpone court action on the cost sharing reductions and hope that it indicates a desire to keep coverage and care affordable for working families. However, time is of the essence as plans face imminent filing deadlines for 2018,” said Ceci Connolly, president of the Alliance of Community Health Plans, an industry group. “We urge Congress and the administration to commit to full funding of these vitally important subsidies or brace for millions of newly-uninsured seeking care at local emergency departments.”

Democrats jumped to paint the decision as further evidence of the Trump administration’s harmful health policy agenda.

“Unfortunately, by kicking the can down the road once again, the administration is continuing to sow uncertainty in the markets that will hurt millions of Americans,” Senate Minority Leader Charles E. Schumer of New York said in a statement. “Instead of hemming and hawing, they ought to step up to the plate and say once and for all that they will make these payments permanently, which help millions of Americans pay less for their health care.”

Neither the Trump administration nor the House responded Monday to a motion from 16 Democratic state attorneys general who sought last week to join the suit to defend the subsidies. The parties instead promised a separate response to that motion, but noted that the court had denied another motion for intervention, from a group of consumers, in January.

The attorneys general argued that the Trump administration is no longer defending the law and that they instead should be able to defend the residents of their states who rely on it.

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