2 more health insurers sue over halted CSR payments

Two more health insurers have sued the Trump administration over its decision to stop funding cost-sharing reduction payments.

South Dakota-based Sanford Health Plan filed its complaint (PDF) on Jan. 26, and is seeking $1.6 million, while the Montana Health CO-OP brought its lawsuit, which seeks $5.3 million, on Jan. 30.

Those lawsuits bring the total number of CSR-related suits against the Trump administration to four. Like the Montana Health CO-OP, the other two complainants—Maine Community Health Options and Common Ground Healthcare Cooperative—are also consumer operated and oriented plans.

Wisconsin-based Common Ground’s complaint is unique because it amends an existing class-action lawsuit against the government for unpaid risk corridor funds. Indeed, the government is facing a host of lawsuits tied to risk corridor payment shortfalls—an issue that arose because of a provision that prevents payments from exceeding the amounts collected from other insurers. Like the CSR suits, some of those complaints have been filed by CO-OPs, but also by larger insurers like Blue Cross Blue Shield of North Carolina and Humana.

As with the risk corridor lawsuits, the CSR lawsuits claim that by failing to make those payments, the government violated its statutory and contractual obligations to insurers. The Trump administration decided to stop funding CSR payments in October after paying for them on a month-to-month basis while deciding how to proceed with a court case concerning whether they were being funded illegally.

In December, the administration, the House of Representatives and the attorneys general from multiple states settled that lawsuit, which was in the appeals stage after a federal judge ruled in 2016 that the Obama administration couldn’t fund the subsidies without Congress’ permission.

Many insurers priced their 2018 individual market plans assuming CSR payments might disappear—a strategy that contributed to climbing premiums. It’s possible, though, that they could see CSR funding return in 2019 if Congress is able to pass a bipartisan Affordable Care Act stabilization bill authored by Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, R-Wash.