Health and Science

States ask court to force Trump to pay Obamacare insurers key subsidies

Key Points
  • A coalition of states asked a judge to compel the Trump administration to continue making cost-sharing reduction payments to Obamacare insurers.
  • The administration cut off those payments last week.
  • The payments, which reimburse insurers for out-of-pocket health cost discounts to low-income customers, are worth billions of dollars.
Xavier Becerra, Attorney General of the State of California
Ronen Tivony | NurPhoto | Getty Images

The attorney generals of California and New York on Wednesday announced that they and a coalition of states asked a court to force the Trump administration to continue paying Obamacare insures key reimbursements for subsidies.

The request for a emergency temporary restraining order comes six days after the Trump administration ceased making the payments, worth billions of dollars annually to health insurers.

California, New York and 17 other states already had sued the administration seeking restoration of the so-called cost-sharing reduction payments.

The payments reimburse insurers for discounts that they must give millions of Obamacare customers for their out-of-pocket health costs, including co-payments, coinsurance and deductibles.

The Trump administration has said that the payments cannot be made because Congress never separately appropriated the money for them.

But the coalition of states suing the admininstration argues that there is no need for a separate authorization because the CSRs discounts, and the payments to insurers for them, are part of the Affordable Care Act, the Obamacare law.

Trump: Insurance companies have made a fortune off Obamacare subsidies
Trump: Insurance companies have made a fortune off Obamacare subsidies

"It's long past time that President Trump learns that he doesn't get to pick what law he follows," said California Attorney General Xavier Becerra.

Eric Schneiderman, New York's attorney general, said President Donald Trump's "abrupt move to cut these subsidies is reckless, dangerous and illegal."

"These payments are vital to thousands of New Yorkers and millions of Americans who rely on them to afford their health care," Schneiderman said. "Yet President Trump is using those families as political pawns, putting their lives at risk to advance hisown partisan agenda."

"We won't stand for it – and we're moving to block these dangerous cuts before they do any more harm."

Trump for months had threatened to stop the payments.

Those threats lead many Obamacare insurers to ask for much higher premium rates for 2018 plans than they otherwise would have asked for.

Trump's decision to follow through on his threats has spurred a bi-partisan effort in the Senate to pass a bill that would restore the CSR payments, while at the same time giving states flexibility at winning waivers from Obamacare rules controlling the types of individual health plans that can be sold.

Trump's reaction to that bill has been mixed. It is not clear if he will ultimately support the bill, or if it will even have enough votes to pass through Congress.

WATCH: Trump says still in negotiations on health care

Trump still in negotiations on health care
Trump still in negotiations on health care