Court rules allowing Dem states to defend Obamacare payments – BY RACHEL ROUBEIN AND BROOKE SEIPEL – 08/01/17 08:55 PM EDT


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The U.S. Court of Appeals for the District of Columbia Circuit ruled Tuesday that Democratic state attorneys general can defend crucial ObamaCare payments to insurers, as President Trump has indicated he may cut them off.

The court granted a motion that a coalition of 16 attorneys general — led by California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman — filed, according to a court order uploaded by Reuters.

It’s possible this decision could make it harder for the appeal to be dropped, healthcare experts suggested.

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The Republican-led House filed the lawsuit in 2014, arguing that the cost-sharing reduction payments to insurers are illegal because Congress has not provided a specific appropriation for them.

These payments are crucial for insurers, compensating them for covering some out-of-pocket costs for certain consumers. They total $7 billion for fiscal 2017, and regardless of whether the administration pays them, insurers would still be on the hook to offer these discounts to enrollees — they just wouldn’t be reimbursed for doing so.

Insurers have threatened to leave the ObamaCare market exchanges if the payments are not continued, which could potentially leave millions without healthcare coverage options during the transition.

“The states have shown a substantial risk that an injunction requiring termination of the payments at issue here … 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,” the order stated.

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