Health Law Could Be Hard to Knock Down Despite Judge’s Ruling

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Could a federal judge in Texas be the catalyst that finally brings down the Affordable Care Act, a law that has withstood countless assaults from Republicans in Congress and two Supreme Court challenges?

On the morning after Judge Reed O’Connor’s startling ruling that struck down the landmark health law, legal scholars were doubtful.

Lawyers on both sides of previous A.C.A. battles said the reasoning behind this one was badly flawed, notably in its insistence that the entire 2010 law must fall because one of its provisions may have been rendered invalid by the 2017 tax overhaul legislation. Had Congress meant to take such radical action, they said, it would have said so at the time.

Legal experts also noted that the Supreme Court, where most people believe the case is headed, historically has been reluctant to strike down federal laws, particularly those that have become ingrained in the lives of millions of citizens.

For now, the ruling is unlikely to affect the more than 23 million people who get health coverage through the insurance marketplaces set up by the law and the expansion of Medicaid in 36 states. The Trump administration immediately said — despite the president’s gleeful tweets hailing the decision — that it would continue to enforce the law until the appeals process plays out, which could take more than a year. That will ensure that the American health care system, which has been operating under the law for more than five years, will not be thrown into immediate chaos.

Judge O’Connor, who was appointed by George W. Bush to the Federal District Court in Fort Worth, has ruled against laws supporting immigration, transgender and Native American rights. Conservative lawyers are known to choose his district to file cases, hoping he will fire opening salvos that propel their issues through the court system.

The crux of Judge O’Connor’s decision centered on the health law’s requirement that most people have health coverage or pay a tax penalty.

That tax penalty was effectively eliminated when Congress reduced its amount to zero in the tax legislation enacted last year. And once the tax penalty no longer stood, the so-called “individual mandate” was unconstitutional and the entire law had to fall, the judge reasoned in accepting the argument of the 20 states that brought the lawsuit challenging the legislation.

But an array of legal experts said that argument was unsound. Jonathan H. Adler, a conservative law professor at Case Western Reserve University in Cleveland, called that position “simply nonsensical” and said the judge’s conclusion was “hard to justify” and “surprisingly weak.”

He and others pointed to the fact that even though Congress erased the tax penalty, it did not touch the rest of the sprawling health act. A longstanding legal doctrine called “severability” holds that when a court excises one provision of a statute, it should leave the rest of the law in place unless Congress explicitly stated that the statute could not survive without that provision.

In this case Congress’s intention was particularly clear, legal experts said.

“Congress amended one provision of a 2,000 page law and did not touch the rest of the law so it is implausible to believe that Congress intended the rest of the law not to exist,” said Abbe R. Gluck, a health law expert at Yale Law School.

Judge O’ Connor also cited congressional intent, focusing on language from the 2010 law, which underscored the significance of the individual mandate to the entire act. But he largely ignored the 2017 congressional action. In essence, legal scholars said, he looked to one congressional view and not the more recent one.

And in so doing, he opened the door for House Democrats to intervene in successive appeals. On Saturday aides to Representative Nancy Pelosi, who is expected to become the next speaker of the House, said she would move quickly to notify the Trump administration that House Democrats intended to step in to defend the law in the case.

As the legal showdown plays out, efforts to protect the A.C.A. are also underway in the courts. Earlier this year the state attorney general of Maryland sued the Trump administration for attempting to gut the act. The case is pending.

Nicholas Bagley, a health law expert at the University of Michigan, suggested that Judge O’Connor may not yet be done with the case. In a series of tweets on Saturday, Mr. Bagley noted that the judge had not yet addressed a handful of central issues in the suit, nor had he issued a final ruling indicating whether the act should fall immediately. Judge O’Connor could indeed hold onto the case before an appellate court takes it up.

But if he lets the case move forward, a likely timeline, according to many legal experts, is that the case will be taken up by the United States Court of Appeals for the Fifth Circuit in New Orleans this spring. If the Fifth Circuit upholds Judge O’Connor’s decision, the Supreme Court is likely to agree to hear the case in its term that starts in October 2019, with a decision in 2020. If the Fifth Circuit overturns the judge’s ruling and upholds the law, there is a good chance the Supreme Court would decline to even take the case, legal scholars said.

One law professor, Ilya Somin of George Mason University, criticized parts of the opinion, but said he was “a bit less confident about the outcome” because “the history of A.C.A.-related litigation is filled with surprises and failed predictions by experts.”

Among the observations flying about was the notion that the Supreme Court only rarely strikes down federal laws, and it is particularly reluctant to do so when the laws have been in place for years and affect millions of people. In fact, Chief Justice John G. Roberts Jr. wrote in his 2012 opinion upholding the health care law, that the court should err on the side of sustaining federal laws.

“As between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid,” he wrote, quoting Justice Oliver Wendell Holmes Jr., “our plain duty is to adopt that which will save the act.”

The five justices who voted to uphold the law in a landmark 2012 case, including Justice Roberts, are all still on the court.





Montana health plan strikes victory over cost-sharing reduction payments

Montana Health Co-Op. Credit: Google Street View

The insurer says it is owed $5 million in payments mandated under the Affordable Care Act.

Health insurers in the Affordable Care Act market got a major win Tuesday when the Montana Health Co-op became the first plan to win its case for cost-sharing reduction payments.

Montana Health Co-op said it is owed an estimated $5 million in CSRs for 2017.

United States Court of Federal Claims Judge Elaine Kaplan said it didn’t matter that Congress never appropriated the funds, as argued by the Department of Justice. Kaplan sided with the Montana Health Co-op that said the Affordable Care Act created the mandatory obligation whether Congress approved the funds or not.

Judge Kaplan directed the parties to file a joint status report on or before October 4.

CSRs were set up under the ACA to allow insurers to pay the deductibles and other out-of-pocket costs for lower-income consumers.

The Department of Health and Human Services began making the CSR payments in 2014.

In that same year, Republicans in the House of Representatives sued the Obama Administration over the payments, saying they and others in Congress had never approved the funds. They won and an appeal was brought, but under President Donald Trump, the appeal became moot.

In 2017, Attorney General Jeff Sessions issued an opinion that the funds were never appropriated and the government stopped the payments.

While insurers no longer received the funds, they were still mandated under the ACA to offer to qualifying consumers the benefit of lower out-of-pocket costs.

Several insurers filed lawsuits, including Blue Cross Blue Shield of Vermont, Maine Community Health Options, LA Care Health Plan and Sanford Health Plan, according to Health Affairs. Common Ground Healthcare Cooperative led a class action lawsuit.

Insurers have also filed lawsuits to get payments promised through another ACA program, risk corridors. Under the three-year, budget neutral risk corridors program, the government was to take money from plans that had fewer higher risk beneficiaries and give the  funds to those that suffered losses in insuring higher risk consumers.

In making her decision Tuesday, Judge Kaplan cited a lawsuit brought by Moda Health Plan over risk corridor payments. In that case, the Federal Circuit Court said the government was obligated to make risk corridor payments to insurers.

But that case was overturned in mid-June, when a majority of a three-judge panel of the Court of Appeals for the Federal Circuit said the government did not have to pay health insurers the full amount owed to them in risk corridors payments.



Federal appeals court says HHS doesn’t have to make ACA risk corridor payments

Legal Review

A federal appeals court ruled the federal government does not have to make risk corridor payments, dealing a blow to insurers that claim they are owed billions in payments under the Affordable Care Act.

In a closely watched case brought by Moda Health Plans, the three-judge panel for the United States Court of Appeals for the Federal Circuit reversed a decision by the Court of Federal Claims, ruling that the Department of Health and Human Services is not obligated to make risk corridor payments to insurers under the ACA.

The payments were built into the ACA as a way to protect insurers from extreme gains or losses on the ACA exchanges in a market that was still untested by insurers.

“Although section 1342 obligated the government to pay participants in the exchanges the full amount indicated by the formula for risk corridor payments, we hold that Congress suspended the government’s obligation in each year of the program through clear intent manifested in appropriations riders,” wrote Chief Judge Sharon Proust in the decision (PDF). “We also hold that the circumstances of this legislation and subsequent regulation did not create a contract promising the full amount of risk corridors payments.”

The court acknowledged the section of the ACA requiring the HHS Secretary to establish risk corridor payments is “unambiguously mandatory,” but said Congress included appropriations riders during each of the program’s three years to ensure risk corridor payments were budget neutral.

The court added that the program “lacks the trappings of contractual agreement,” rebuffing Moda Health’s argument that HHS is required to make payments.

In a statement to FierceHealthcare, Moda Health President and CEO Robert Gootee said the insurer plans to appeal the decision.

“We are disappointed by today’s decision,” he said. “If it is upheld on appeal, it will effectively allow the federal government to walk away from its obligation to provide partial reimbursement for the financial losses Moda incurred when we stepped up to provide coverage to more than 100,000 Oregonians under the ACA. We continue to believe, as our trial court did, that the government’s obligation to us is clearly stated in the law and we will continue to pursue our claim on appeal.”

In a dissenting opinion, Judge Pauline Neman argued that the appropriations riders did not cancel out HHS’s obligation to make risk corridor payments. She said the court’s decision “undermines the reliability of dealings with the government.”

So this isn’t the end of the road for insurers, and there’s some good language in the majority opinion about their statutory entitlement. But it’s a Michigan-size pothole in their path to getting paid.

Dozens of insurers have sued the government to reclaim billions in unpaid risk corridor payments. Moda Health claimed it is owed $214 million, while Blue Cross Blue Shield of North Carolina filed for nearly $150 million in unpaid payments and Humana claims its owed $611 million.




Prime Healthcare Services unlawfully stopped nurses’ anniversary raises, court rules

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A federal appeals court ruled that Ontario, Calif.-based Prime Healthcare Services violated the National Labor Relations Act when it canceled anniversary raises for unionized nurses, according to a Reuters report.

Here are six things to know about the issue.

1. The U.S. Court of Appeals for the D.C. Circuit made the ruling May 18, affirming a previous ruling by the National Labor Relations Board.

2. The NLRB found Prime “violated both the unilateral change doctrine and the duty to provide relevant information during negotiations with its employees’ bargaining representatives, Service Employees International Union Local 121RN and SEIU United Healthcare Workers-West,” according to the May 18 ruling. The NLRB specifically found Prime canceled anniversary step increases for nurses after the expiration of its labor deals with the two SEIU bargaining units, and determined the private for-profit hospital operator failed to provide information about employee healthcare programs as requested by the units. The NLRB ordered Prime to resume the raises, take care of any owed back pay due to the discontinuation of the raises and provide the requested information.

3. Both sides reached a settlement regarding complaints related to UHW’ unfair labor practice charges in the matter, and the unfair labor practice charges filed by 121RN remained at issue, according to the ruling. Prime’s agreements with 121RN, as well as UHW, were effective from Jan. 1, 2007, through March 31, 2011. The 121RN bargaining unit represents registered nurses at Prime’s Encino (Calif.) Hospital Medical Center, while UHW represents service and technical employees at Encino and Prime’s Garden Grove (Calif.) Hospital Medical Center.

4. Prime argued, among other things, that the anniversary step increases were terminated when the labor deal with 121RN expired in 2011 because they were tied to annual pay increases in the expired contract, according to the ruling.

5. The appeals court found “no merit in these challenges, however. Accordingly, we deny the petition for review and grant the [NLRB] board’s cross-application for enforcement of its order.”

6. In response to the ruling, Jamie Konn, outside counsel for Prime, told Becker’s Hospital Review: “This is an old matter that is now behind us. Encino and 121RN entered into a collective bargaining agreement in November 2014. The parties will continue to work together, and this matter should be resolved soon.”


California’s anti-abortion pregnancy centers want the Supreme Court to overturn state notice law

California's anti-abortion pregnancy centers want the Supreme Court to overturn state notice law

At a faith-based pregnancy center here, rooms are crammed with baby supplies, both new and used, for expectant mothers, and a medical office contains equipment to allow pregnant women to view their fetuses.

“Life is not about waiting for the storm to pass,” reads a saying on a wall, “but learning to dance in the rain.”

The Alpha Pregnancy Center, located in a storefront on a busy street in the Mission District, is one of about 200 centers in California and thousands across the country pushing the U.S. Supreme Court to spare them from government regulation.

The California centers are challenging a state law that requires them to inform clients that contraception, prenatal care and abortion may be obtained free or at low cost from the state, along with a state phone number for information about Medi-Cal. The law also requires clinics to disclose if they are not licensed.

The case, which will be argued on Tuesday, pits the free speech rights of the anti-abortion centers against government consumer regulations. The decision is likely to affect abortion laws in other states.

The U.S. 9th Circuit Court of Appeals upheld California’s law, but similar requirements passed by cities and counties elsewhere in the nation have fared poorly in the courts.

Mark L. Rienzi, a religious liberties lawyer who represents pregnancy clinics, frames the debate as a question of whether the government can force anti-abortion activists to give clients phone numbers of abortion providers.

“Can the government make you say something you don’t want to say?” Rienzi asked. “They are pro-lifers. They exist to tell people you shouldn’t get an abortion.”

Rienzi said 11 states and local governments have passed laws to regulate what the pregnancy centers must tell clients — rules he argues amount to discrimination against abortion opponents.

Other analysts view California’s law as mere consumer protection. It was passed in response to reports that the centers were luring pregnant women without clearly identifying themselves as anti-abortion.

“The law is so clearly constitutional,” said UC Berkeley Law School Dean Erwin Chemerinsky. “It is one thing to compel somebody to speak. It is another thing to say you have to post on your wall information that is completely accurate.”

Rienzi, though, said California has plenty of resources to let low-income women know that they may be eligible for government-assisted contraception and abortion.

“I don’t think the government gets to turn private speakers into government billboards,” he said.

At the Alpha Pregnancy Center, nothing on the outside of the storefront indicates the group opposes abortion, but it states on its website that it does not provide abortion referrals.

The government-required notice is posted not on a wall, but is included near the end of three pages of a handout that deals primarily with privacy rights. Clients are required to sign that they have been given the form.

During a recent visit, only the executive director and a receptionist were working. A woman walked out pushing a baby carriage.

Most of the center’s clients are unmarried and about 80% decide to give birth, said the executive director, who declined to give her name. The center tries to help the women financially with donated goods and offers classes in money management, life skills, time management, child behavior and potty training, she said.

Brochures in the center are designed to steer women away from abortion.

One contains information on fetal development. At eight weeks, “the elbows and fingers can be seen,” it reads. There are photographs of fetuses at various stages.

Another pamphlet describes all that could go wrong with an abortion and links the procedure to breast cancer, mental illness and relationship problems, claims that those on the other side of the debate say are either false or misleading.

Elizabeth Nash, a policy analyst for the Guttmacher Institute, a research organization that favors abortions rights, said some pregnancy centers use deception to lure pregnant women who may be seeking abortions, while others are straightforward and even help women obtain government-funded healthcare.

The Supreme Court’s decision to review California’s 2015 law delighted crisis pregnancy centers, but it doesn’t mean they will win the case. Votes of only four of the nine justices are needed to take a case, and the court does not disclose those votes.

Justice Anthony M. Kennedy, often a swing vote, is likely to be the decisive vote in the case, National Institute of Family and Life Advocates v. Becerra, analysts said.

“It’s really hard to know what the Supreme Court is going to do here, ” said Stanford University Law School professor Pamela S. Karlan. “They have two competing impulses.

“On one hand the Supreme Court is extraordinarily receptive to a wide variety of 1st Amendment claims. On the other hand, this is a consumer protection statute, and the Supreme Court has at least so far not shown much interest in telling government they can’t regulate the information” that must be given to medical patients, Karlan said.

Some legal analysts said a ruling against California could hurt the anti-abortion movement by imperiling dozens of state laws that require providers to counsel patients that abortion may harm them.

The Supreme Court’s 1992 decision in Planned Parenthood v. Casey said that “counseling requirements are OK in the sense that the state is allowed to prefer childbirth over abortion,” Nash said.

Of 29 states with abortion counseling requirements, 20 require providers to give patients “misleading or inaccurate information” on such topics as fetal pain, fetal personhood, and links between abortion and breast cancer, future fertility and mental illness, she said.

The National Academy of Sciences released a major study Friday that found abortion was safe and debunked claims it increased the risk of infertility, breast cancer and mental illness.

Many of the state laws that require providers to make such claims have not been challenged because of the high costs of litigation, Nash said. But if the Supreme Court rules that California’s law violates free speech, these laws might become stronger targets, she and other analysts said.

“If the state can’t require that pregnant women be able to read a sign that gives them accurate information,” Chemerinsky said, “it seems an even stronger argument that healthcare professionals cannot be forced to utter falsehoods.”


Court sets speedy 340B lawsuit schedule, siding with AHA

Dive Brief:

  • The American Hospital Association and other parties’ request for an expedited brief schedule for the group’s lawsuit over CMS cuts to the 340B program was agreed to by the U.S. Court of Appeals for the District of Columbia Circuit Tuesday, despite the government’s request for more time to respond to the lawsuit.
  • U.S. District Judge Rudolph Contreras dismissed the initial lawsuit in December, saying the groups did not have standing to sue because the cuts hadn’t yet taken effect. On January 11, AHA and the other groups appealed the decision, and then asked the court to expedite the case citing the immediate impact the cuts have on 340B hospitals’ ability to provide services to underserved communities.
  • Attorneys for the Department of Justice argued the compressed briefing schedule would not give adequate time for the government to prepare its brief and coordinate with affected agencies.

Dive Insight:

The lawsuit concerns a HHS final rule that took effect at the start of the year changing the amount 340B hospitals are paid for drugs to 22.5% less than the average sales price. Last year, hospitals paid the average price plus 6%.

“America’s hospitals and health systems are pleased that the U.S. Court of Appeals has accepted our expedited brief schedule in our appeal to reverse the significant cuts to the 340B Drug Savings Program, which for over 25 years has played a vital role in helping hospitals stretch scarce federal resources to expand and enhance patient services and access to care for vulnerable communities without any cost to the government,” Melinda Hatton, general counsel for the American Hospital Association, told Healthcare Dive.

AHA is joined in the lawsuit by America’s Essential Hospitals, the Association of American Medical Colleges, Eastern Maine Healthcare Systems (Brewer, Maine), Henry Ford Health System (Detroit) and Adventist Health System’s Park Ridge Health (Henderson, North Carolina).

The groups argue the cuts will hurt 340B hospitals’ budgeted operations, bond covenants and other items necessary to provide community care, and say the reimbursement change exceeds HHS’ authority.

“For 340B hospitals, the ability to provide care to their communities is tied to receipt of third-party reimbursements; constriction in the flow of Medicare revenues to 340B hospitals will increasingly constrict funds for medical care for all their patients, most particularly those who are poor and underserved and most reliant on these services,” the groups wrote in their request to expiate the appeal brief schedule.

AHA noted that it is actively exploring other options to address the cuts.

“We will continue to pursue our legislative and legal strategies to reverse these cuts, and expect to prevail in holding the agency accountable for overstepping its authority,” Hatton said.

The Court of Appeals set the the brief schedule to conclude by April 2, appearing to allow AHA’s request that oral arguments to occur by May, prior to the summer recess. “Otherwise the next opportunity for argument would be in September, which would likely significantly delay the resolution of this action,” the plaintiff attorneys had argued.



18 states sue over Trump-halted ObamaCare payments

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A new multi-state lawsuit has been announced to stop President Trump from halting key ObamaCare payments to insurers.

Eighteen states and Washington, D.C., signed onto the lawsuit filed Friday in federal court in California, according to Sarah Lovenheim, a spokeswoman for California Attorney General Xavier Becerra (D).

On Thursday night, Trump announced he would stop making the payments, which led to an outcry from critics saying he was sabotaging the health-care law.

The complaint will seek a temporary restraining order, preliminary injunction and permanent injunction requiring the cost-sharing reduction payments be made.

The administration, on a monthly basis, had been funding cost-sharing reduction subsidies, which compensate insurers for lowering the out-of-pocket costs of certain ObamaCare enrollees.

Trump has repeatedly signaled he might cut them off, while insurers have been pleading for long-term certainty that they would continue.

“Without the Affordable Care Act [ACA] and its subsidies for these families, millions more would be left in the cold without coverage. California isn’t about to turn its back on hardworking families who are fighting to hold onto their ACA health insurance. We’ve taken the Trump administration to court before and won, and we’re ready to do it again if necessary,” Becerra said in a statement Thursday night, before the lawsuit was officially announced.

Additionally, New York Attorney General Eric Schneiderman (D) said he anticipates proceeding with litigation on a case that’s currently been on hold.

The House sued the Obama administration, arguing the White House was illegally funding cost-sharing reduction subsidies payments to insurers.

Earlier this summer, the U.S. Court of Appeals for the District of Columbia Circuit ruled that a coalition of attorneys general — including Schneiderman and Becerra — can defend the payments.

“The fast track for initial relief will be in the case we’re filing in California,” Schneiderman said, referring to the new lawsuit.


The Latest Motion In House v. Price Has A Significant Impact On The Future Of CSR Payments

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On August 1, 2017, the United States Court of Appeals for the District of Columbia granted the motionof the attorneys general of 17 states and the District of Columbia to intervene in House v. PriceHouse v. Price is before the D.C. Circuit on appeal from the ruling of a district court judge in favor of the House of Representatives in its lawsuit claiming that the reimbursement of insurers for reducing cost sharing for low-income qualified health plan enrollees is illegal because Congress had not appropriated funding for the payments. The judge enjoined the payments but stayed her order pending an appeal and the Obama administration in fact appealed. The states had moved to intervene, claiming that they had an interest in the action and that the Trump administration was not adequately defending their interest.

The three-judge appellate panel held first that the states had demonstrated that they had standing to intervene because they “would suffer concrete injury if the court were to grant the relief the plaintiffs seek.” The states established that a judgment for the House terminating the payments would “lead directly and imminently to an increase in insurance prices, which in turn will increase the number of uninsured individuals for whom the States will have to provide health care.” This would in turn result in state-funded hospitals suffering financially when they have to cover emergency care for uninsured individuals.

The court further held that the states had established a right to intervene in the action. First, the states had established an interest in the subject matter of the lawsuit.

Second, the court held that allowing the injunction of the court below would impair the states’ rights. The court observed that the administration’s “claim that it could unilaterally suspend payments is a debated legal question, not an answer to the injury the States have evidenced. The injunction sought, which would forbid the payments at issue, would erect a roadblock to the States’ goal of either persuading or compelling the Department to make the payments.”

Third, the court held that the states had raised a sufficient doubt concerning the adequacy of the administration’s representation of their interest. The court noted that the administration had nowhere argued that it would protect the states’ interest or continue to pursue the appeal.

Fourth, the court held that the motion to intervene was timely. The states, the court held, “had filed within a reasonable time from when their doubts about adequate representation arose due to accumulating public statements by high-level officials both about a potential change in position and the Department’s joinder with the House in an effort to terminate the appeal.” The court, in short, took President Trump’s threats to terminate the cost-sharing reduction (CSR) payments seriously.

Finally, the court held that permissive intervention was also warranted in the case.

The court further ordered that the case would continue to be held in abeyance, with status reports at 90-day intervals and the next one due on October 30, 2017. With their status as parties to the case, however, the states may well next seek to get the case moving again.

The decision does not mean that the Trump administration is barred from ending the cost-sharing reduction payments. It does mean, however, that the administration cannot unilaterally stop the CSR payments, dismiss the appeal, and claim judicial imprimatur for its doing so. If the administration does stop making the payments, the states—or insurers, or possibly consumers—would be able to sue to require the payments to be made and the injunction entered by the lower court would not be as much of a “roadblock” to their prevailing. Finally, if the states ultimately convince the appellate court that the CSR funding has in fact been appropriated, the administration would be required to pay it. The decision is, therefore, a major development in the ongoing CSR saga.

U.S. governors urge Trump to make insurance payments

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Democratic and Republican U.S. governors on Wednesday urged the Trump administration, as well as Congress, to continue funding payments to health insurance companies that make Obamacare plans affordable, calling it critical to stabilizing the insurance marketplace.

Republican President Donald Trump, frustrated that Obamacare survived attempts to repeal it, has threatened to cut off about $8 billion in subsidies that help control costs for low-income Americans under the Affordable Care Act, Democratic former President Barack Obama’s signature domestic initiative.

“The Administration has the opportunity to stabilize the health insurance market across our nation and ensure that our residents can continue to access affordable health care coverage,” said a statement by the Health and Human Services Committee of the National Governors Association.

“A first critical step … is to fully fund CSRs (cost-sharing reduction payments) for the remainder of calendar year 2017 through 2018,” the statement said, adding this was needed as Congress and the administration address long-term reform efforts.

The committee is led by Virginia Governor Terry McAuliffe, a Democrat, and Massachusetts Governor Charlie Baker, a Republican. Earlier this year, the governors sent a letter calling on Congress to fully fund the cost-sharing payments.

Some Congressional Republicans have joined Democrats in urging Trump to continue the payments. Republican Senator Lamar Alexander, chairman of the health committee, said Tuesday the president should pay the subsidies through September while lawmakers work on bipartisan legislation to fund the outlays for another year.

But the Senate’s No. 2 Republican John Cornyn hesitated when asked Wednesday if he would support such legislation.

“I’ve said before that I’m not in favor of throwing money at insurance companies without reform, so that’s going to be the nature of the conversation,” Cornyn told reporters outside his office.

Asked what reforms he’d like to see, Cornyn mentioned the “skinny” Obamacare repeal bill the Senate voted down last week. Among other things, it would have repealed the requirement that every American have health insurance or pay a penalty.

Insurers say that the cost-sharing payments are passed onto customers in the form of lower deductibles and co-pays that make care more affordable for low income Americans.

Insurers are finalizing 2018 premium rates for the individual Obamacare market, with many saying their decision hinges on government guarantees for cost-sharing subsidies.

Molina Healthcare Inc said on Wednesday it would stop selling Obamacare plans in Utah and Wisconsin, joining a slew of health insurers that have exited Obamacare markets amid uncertainty over the healthcare law.

Anthem Inc, one of the largest sellers of these plans in 2017, has pared back offerings or mostly exited five states including California and may exit more.

White House budget director Mick Mulvaney told CNN the administration was still considering whether to end cost-sharing subsidies.


Court complicates Trump’s threat to cut ‘Obamacare’ funds

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President Donald Trump’s bold threat to push “Obamacare” into collapse may get harder to carry out after a new court ruling.

The procedural decision late Tuesday by a federal appeals panel in Washington has implications for millions of consumers. The judges said that a group of states can defend the legality of government “cost-sharing” subsidies for copays and deductibles under the Affordable Care Act if the Trump administration decides to stop paying the money.

Trump has been threatening to do just that for months, and he amped up his warnings after the GOP’s drive to repeal and replace “Obamacare” fell apart in the Senate last week. The subsidies help keep premiums in check, but they are under a legal cloud because of a dispute over the wording of the ACA. Trump has speculated that he could force Democrats to make a deal on health care by stopping the payments.

The court’s decision is “a check on the ability of the president to sabotage the Affordable Care Act in one very important way,” said Tim Jost, professor emeritus at Washington and Lee University School of Law in Virginia, a supporter of the ACA who has followed the issue closely.

Because of the ruling, legal experts said, states can now sue if the administration cuts off the subsidies. Also, they said, the president won’t be able to claim he’s merely following the will of a lower court that found Congress had not properly approved the money.

“We’re not going to wait to find out what Donald Trump wants to do,” said California Attorney General Xavier Becerra, who is helping steer the states’ involvement. “My team is ready to defend these subsidies in court.”

The Justice Department had no comment. The White House re-issued an earlier statement saying, “the president is working with his staff and his Cabinet to consider the issues raised by the … payments.”

Trump has made his feelings clear on Twitter. “If ObamaCare is hurting people, & it is, why shouldn’t it hurt the insurance companies,” he tweeted early Monday.

He elaborated in an earlier tweet, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies…will end very soon!”

In a twist, the appeals court panel seemed to take such statements into account in granting 17 states and the District of Columbia the ability to intervene on behalf of consumers.

The judges’ decision said states’ doubts that the administration could adequately defend their interests in court were fanned by “accumulating public statements by high-level officials…about a potential change in position.”

“He’s really a terrible client, President Trump is,” University of Michigan law professor Nicholas Bagley said. “The states point to his public statements and say, ‘Are you kidding me? We know the president is poised to throw us under the bus and we know because he said so.’”

The health law requires insurers to help low-income consumers with their copays and deductibles. Nearly 3 in 5 customers qualify for the assistance, which can reduce a deductible of $3,500 to several hundred dollars. The annual cost to the government is about $7 billion.

The law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.

Nonetheless, the payments remain under a cloud because of a disagreement over whether they were properly approved in the health law, by providing a congressional “appropriation.”

House Republicans trying to thwart the ACA sued the Obama administration, arguing that the law lacked specific language appropriating the cost-sharing subsidies.

A district court judge agreed with House Republicans, and now the case is before the U.S. appeals court in Washington

If Trump makes good on his threat, experts estimate that premiums for a standard “silver” plan would increase by about 19 percent. And more insurers might decide to leave already shaky markets.

In Congress, some prominent lawmakers in both parties are saying they hope to provide at least a temporary guarantee for the subsidies before open enrollment season for 2018 starts Nov. 1.