Judge denies states' bid to force Trump administration to reinstate CSR payments

A federal judge has denied several states’ attempt to compel the Trump administration to continue paying cost-sharing reduction payments.

Attorney generals from 18 states and the District of Columbia had filed a motion in the U.S. District Court seeking a temporary injunction that would reinstate the payments, which the administration decided to end earlier this month. 

The idea was to ensure that the subsidies continue to be funded while a lawsuit they filed in defense of CSR payments plays out. However, Judge Vince Chhabria was skeptical of the states’ argument during a hearing on the motion earlier this week, noting that many states have already taken steps to diffuse the impact of CSR uncertainty.

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In his order (PDF) denying the states’ request for a temporary injunction, Chhabria said it appears the Trump administration may have the stronger legal argument. Indeed, a federal judge did previously rule that CSR payments should stop, as they were not properly appropriated by Congress—a ruling the Obama administration had appealed.

In addition, “the emergency relief sought by the states would be counterproductive,” Chhabria says, noting that state insurance regulators have been working for months to prepare for the possibility that the subsidies would end.

Many states, he continued, have therefore “devised responses that give millions of lower-income people better health coverage options than they would otherwise have had.”

California, for instance, added a 12.4% surcharge to silver-level ACA exchange plans in 2018 to ensure that taxpayers, rather than consumers, bear the brunt of premium increases tied to the possible disappearance of CSR payments.

But California Attorney General Xavier Becerra, who is leading the states’ effort to reinstate the subsidies, said on Wednesday that the legal battle isn’t over.

“The fight for affordable healthcare moves forward,” Becerra said in a statement. “The actions by the Trump administration undermine critical payments that keep costs of healthcare affordable for working families. The judge made clear in his ruling that the ACA is the law of the land. Without an emergency order halting the Trump action, swift action in this litigation becomes even more compelling.”

A bipartisan effort in Congress to appropriate funding for the subsidies, meanwhile, has stalled given that President Donald Trump has not outright endorsed the measure. Two Republican lawmakers introduced their own proposal to fund CSR payments for two years, but in exchange they propose temporarily eliminating the ACA’s individual and employer mandates—which could destabilize the individual market.