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October 26, 2017

Trump doesn't have to make CSR payments—for now, judge rules

Daily Briefing

    A district court judge on Wednesday rejected an emergency motion seeking to force the Trump administration to continue making the Affordable Care Act's (ACA) cost-sharing reduction (CSR) payments to insurers.

    Here's your cheat sheet for understanding health care's legal landscape

    The ruling means the Trump administration will not have to make the CSR payments while a lawsuit proceeds contesting the administration's decision to halt the payments. The suit was filed by attorneys general from 17 states and Washington, D.C.

    The White House earlier this month said HHS had determined it could no longer make the payments without an appropriation from Congress.

    The broader issue of whether the executive branch has the legal authority to make the CSR payments is the center of a separate lawsuit filed by the House in 2014. The House argued that the executive branch, which had been making the payments, did not have the constitutional authority to do so because Congress had not explicitly appropriated money for CSRs. The case has been pending since the November 2016 presidential election, and up until this month the executive branch had continued to make the payments.

    Ruling details

    In the ruling, U.S. District Court Judge Vince Chhabria concluded an emergency order requested by the states was not necessary because "most state regulators have devised responses that give millions of lower-income people better health coverage options than they would otherwise have had."

    He specifically called out California, saying the state "is doing a really good job of responding to the termination of these payments in a way that is not only avoiding harm for people, but actually benefiting people."

    Speaking to states' arguments that cutting off the CSR payments would cause immediate and irreparable harm to states and to consumers, Chhabriain wrote that states should highlight to consumers the fixes they have put into place. "If the states are so concerned that people will be scared away from the exchanges by the thought of higher premiums, perhaps they should stop yelling about higher premiums," he said.

    Speaking to the broader question of whether Congress appropriated money for the CSR payments, Chhabriain said that "both sides have reasonable arguments," but "it appears initially that the Trump administration has the stronger legal argument."


    Department of Justice spokesperson Lauren Ehrsam said the department was pleased with the ruling.

    California Attorney General Xavier Becerra, who is leading the state-filed lawsuit, in a statement said, "Without an emergency order halting the Trump action, swift action in this litigation becomes even more compelling."

    Sen. Patty Murray (D-Wash.), who worked with Sen. Lamar Alexander (R-Tenn.) to craft a bipartisan bill to bolster the exchanges, said the ruling "only makes it more critical" that the Senate pass the bipartisan bill, which would appropriate the CSR payments through 2019 (Pear, New York Times, 10/25; Levine/Hurley, Reuters, 10/25; Livingston, Modern Healthcare, 10/25).

    President Trump just cut off CSR payments—here's what it means

    President Trump has announced that the government will no longer make "cost-sharing reduction" payments to insurers. Watch this video to learn what it means for health insurance exchanges, private insurers, and the cost of premiums.

    Watch the Video

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