Connecting state and local government leaders
Some states may take legal action to protect the subsidies. New York and California have announced lawsuits, and other states may follow.
WASHINGTON — President Trump announced late on Thursday night that his administration is doing away with health care subsidies for insurers, otherwise known as cost-sharing reduction payments. These payments, which were expected to reach $9 billion this year, help insurance companies pay the out-of-pocket costs for lower-income customers in the individual markets.
Insurance companies have already locked in their premiums for the coming year. Many may try to retroactively raise those rates, or if that proves impossible, some may try to pull out of Obamacare markets altogether. This makes congressional attempts to stabilize insurance markets all the more urgent.
One such plan from Sens. Lamar Alexander, a Republican from Tennessee, and Patty Murray, a Washington Democrat, appeared to be gaining momentum in early September before the Graham-Cassidy proposal, the latest failed GOP attempt to repeal and replace the ACA, stole its political thunder. That plan, which Trump claims to support, would allow subsidies to insurance companies to continue, a compromise on the part of Republicans, provided that state governments are given more flexibility over some Obamacare coverage requirements.
As Route Fifty previously reported, a bipartisan group of five governors—Republicans Bill Haslam of Tennessee, Charlie Baker of Massachusetts and Gary Herbert of Utah, along with Democrats Steve Bullock of Montana and John Hickenlooper of Colorado—have publicly thrown their support behind this plan.
Separately, in August, six governors signed on to a behind-the-scenes proposal co-written by Hickenlooper and Ohio Republican Gov. John Kasich. The first among that plan’s recommendations was a continued commitment to the cost-sharing reduction payments on the part of the Trump administration.
So what are these state officials saying in response to the decision to end the CSR payments?
Hickenlooper, in an official statement, called the plan “cruel and irresponsible.” The governor also cited the 45,000 Coloradans who rely on the subsidies for access to affordable insurance and reaffirmed his hope that state and congressional leaders will work towards health care solutions in a bipartisan way.
“Governors are willing to work with Congress to stabilize our health insurance markets,” Hickenlooper wrote, “but to undermine the individual market is cruelty without benefit.”
Hickenlooper also signed onto a joint statement with Kasich that called the Trump administration’s actions around the Affordable Care Act “needless and counterproductive.”
At least two state attorneys general have announced plans to take the Trump administration to court over the cancellation of the subsidies. Eric Schneiderman, the Democratic attorney general for the state of New York, tweeted about his intent to file a lawsuit to protect these payments:
Schneiderman held a press conference on Friday to further lay out his thinking. He called Trump’s “effort to gut these subsidies with no warning … breathtakingly reckless” and called into question the strategic purpose of this policy move. “This is an effort to simply blow up the system,” Schneiderman contended. Along with New York, California’s attorney general, Xavier Becerra, also a Democrat, has announced plans to sue.
Other suits, from states such as Nevada and Massachusetts, may follow.
Quinn Libson is a Staff Correspondent for Government Executive’s Route Fifty based in Washington, D.C.