Several states are banding together to file a lawsuit challenging Donald Trump’s decision yesterday to kill off subsidies crucial to Obamacare, which help decrease medical expenses for millions around the country.
Unable to wheedle Congress into repealing the Affordable Care Act despite multiple attempts, Trump announced Thursday that he will simply end federal payments to insurers to cover deductibles and co-pays for low-income Americans. That means the administration will not be making its next payment on Wednesday, which could plunge the country’s insurance markets into chaos. The subsidies cost $7 billion this year, and were estimated to cost $10 billion in 2018.
In response to Trump’s abrupt decision, the attorneys general of several states, including New York, California, Kentucky, Massachusetts and Connecticut have united to file a lawsuit asking a federal court to force Trump to make the payment, Reuters reports.
California Attorney General Xavier Becerra told reporters that Trump’s decision to halt the payments could increase costs up to 20 percent, meaning millions of families will find themselves unable to access healthcare.
“This is patently a decision that is reckless. It is sabotage plain and simple, and President Trump’s price hikes to Americans’ health insurance are hiding in plain sight,” Becerra said during a conference call with the attorneys general of the other states involved in the lawsuit. The challenge holds that the subsidies are lawful, and that Trump’s actions violate the Administrative Procedure Act by suddenly pulling money and refusing to execute federal law. Becerra added that Trump’s order is “essentially a $7-billion dollar tax increase for working families trying to hold onto their health insurance.”
Despite widespread fear of instability, no insurers have announced plans to pull out of the market or file suits, Politico reports, partially because Trump has been threatening this move for months and they saw it coming. That doesn’t mean, however, that they won’t—legal experts say that lawsuits are “a virtual certainty:”
New Mexico Health Connections is raising rates by an average of 50 percent next year, in part due to the expected loss of subsidy payments, which it relies on to reduce out-of-pocket costs for its poorest Obamacare customers.
“A lot of us anticipated it,” said Martin Hickey, the nonprofit insurer’s CEO, noting that federal premium subsidies will cover the higher costs for most Obamacare customers. “The federal government’s going to pay more for this. That’s the craziest thing.”
Individual states also have the option of filing separate suits, and some are already on their way to doing so. The attorneys general of New York and California have indicated that they intend to take that route in the event that the lawsuit does not go their way. Which plenty of experts believe it...won’t. As Nicholas Bagley, a professor at the University of Michigan Law School, told Politico:
“I don’t know that the argument on the merits has a whole lot of juice,” he said. “Forcing an administration to continue making payments when the president believes there is no appropriation, and when Congress believes there’s no appropriation, would be a pretty extreme move by the court, even if it was a temporary measure.”