Court allows states to intervene in CSR case; senators plan bipartisan healthcare hearings

Republican Sen. Lamar Alexander, R-Tenn., says the Health, Education, Labor and Pensions committee will hold hearings “on the actions Congress should take to stabilize and strengthen the individual health insurance market.” (AMSF2011 / CC BY 2.0)

Both a court order and an announcement from Senate Republicans have eroded President Donald Trump’s strategy of using the uncertain fate of an Affordable Care Act subsidy program as a bargaining chip in his push to repeal the law.

On the judicial side, a U.S. appeals court issued an order (PDF) Tuesday that gives a group of 16 Democratic attorneys general the green light to intervene in the case challenging the legality of cost-sharing reduction (CSR) payments.

RELATED: States seek to intervene in critical ACA subsidy case

The case, originally filed by House Republicans, argues that the CSR program is illegal because Congress never appropriated the funds that go to insurers to subsidize ACA exchange enrollees’ out-of-pocket costs. A judge already ruled in the plaintiffs’ favor last May, and the Obama administration’s appeal of that ruling has been on hold while the Trump administration decides how to proceed.

While the case has been on hold, Trump has refused to say whether funding for the CSR payments will continue, recently renewing his position in tweets that threaten to end “bailouts” for insurers. Policy experts and insurers have warned that if neither the administration nor Congress commits to funding CSR payments, individual market premiums will spike next year and insurer exits will accelerate.

Indeed, the appeals court’s order even alluded to Trump’s public statements on CSRs, noting the states’ motion to intervene was timely given the “accumulating public statements by high-level officials” about a potential change in position on the payments.

With their motion to intervene granted, the attorneys general will be allowed to keep the appeal alive, making it more difficult for the Trump administration to unilaterally end the payments, explains Nicholas Badgely in a post on The Incidental Economist blog.

Meanwhile, Trump is also receiving pressure from some Senate Republicans to continue the payments—the same lawmakers he has been pushing to try again on a bid to repeal the ACA.

Senators Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., announced Tuesday that the Health, Education, Labor and Pensions committee would hold hearings in September “on the actions Congress should take to stabilize and strengthen the individual health insurance market.”

“As we prepare for these discussions, I have also urged the president to temporarily continue the cost-sharing reduction payments through September so that Congress can work on a short-term solution for stabilizing the individual market in 2018,” Alexander said.

The hearings are also a concrete sign that Republicans are embracing a bipartisan approach to healthcare policy fixes after the Senate failed to repeal the ACA in a series of party-line votes last week.