States attempt to bypass Trump and take on the fight to make sure Obamacare doesn't 'explode'

A group of 15 states, along with Washington, DC, is stepping into the fight to save Obamacare’s insurance exchanges.

The states have filed a motion to intervene in a court case that could decide whether or not critical payments, called cost-sharing reduction (CSR) payments, are made to insurers in the Affordable Care Act’s individual insurance exchanges.

In 2015, the House of Representative filed a lawsuit against the Obama administration to prevent the White House from funding the CSR payments in their current fashion. The GOP-led House argued that since the payments were not appropriated by Congress as part of the ACA, they were unconstitutional.

(Check out a full explanation of the CSR payments ยป)

In 2016, a federal judge ruled in favour of the House, putting CSR payments in jeopardy. The Obama administration filed an appeal. Now, President Donald Trump’s administration must decide whether to continue or drop the appeal.

Trump has repeatedly threatened to drop the case and end the payments, which experts say would cause premiums to skyrocket and likely lead to even more insurers ditching the Obamacare exchanges. The states say his threats are why they decided to step in by filing a motion to intervene, allowing them to continue the appeal even if Trump drops it.

“If successful, the suit could — to use the President’s expression — ‘explode’ the entire Act,” the filing says. “Until recently, States and their residents could rely on the Executive Branch to respond to this attack. Now, events and statements, including from the President himself, have made clear that any such reliance is misplaced.”

The states argued that pulling the payments would endanger the health insurance of millions of people on the exchanges.

From the filing (emphasis added):

“The loss of funds and financial uncertainty threatened by this case would lead at least to higher health insurance costs for consumers, and more likely to many insurers abandoning the individual health insurance market. The number of uninsured Americans would go back up, hurting vulnerable individuals and directly burdening the States. The wrong decision could trigger the very system-wide ‘death spirals’ that central ACA features, such as stable financing, were designed to avoid.

The states also argued that the rise in the uninsured population would put a financial burden on state budgets, since they would have to cover more hospital costs when uninsured get care. Thus, they argued they should be able to carry on the case even if the Trump administration drops the appeal.

The filing says the need to step in is urgent, since insurance companies are already leaving the exchanges due to uncertainty. States including Virginia, Iowa, and Nebraska have all seen insurers ditch their exchanges over the past month.

“Meanwhile, the President has increasingly made clear that he views decisions about providing access to health insurance for millions of Americans — including the decision whether to continue defending this appeal — as little more than political bargaining chips,” the filings said. “The States and their residents cannot continue to rely on the Executive Branch to represent them in this appeal.”

The intervention must be approved by the court in order for the states to become part of the case.

Here’s a rundown of the states (and DC) on the filing:

  • California
  • New York
  • Connecticut
  • Delaware
  • Hawaii
  • Illinois
  • Iowa
  • Kentucky
  • Maryland
  • Massachusetts
  • Minnesota
  • New Mexico
  • Pennsylvania
  • Vermont
  • Washington
  • The District of Columbia

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