Saying the lawsuit by California and 17 other states would be “counterproductive,” an Obama-appointed federal judge in San Francisco has declined to order President Trump and his administration to restore cost-sharing reduction (CSR) payments to Obamacare insurers.
U.S. District Judge Vince Chhabria noted: “State regulators have been working for months to prepare for the termination of these payments…. And although you wouldn’t know it from reading the states’ papers in this lawsuit, the truth is that most state regulators have devised responses that give millions of lower-income people better health coverage options than they would otherwise have had.”
The CSR payments are designed to offset health care costs for lower-income Americans, but Trump has called them “bailouts” for the insurers, whose profits he claims have soared under the Affordable Care Act (ACA).
Because of the precautionary measures taken by most states, “the large majority of people who purchase insurance on exchanges throughout the country will either benefit or be unharmed,” Chhabria wrote. “In particular, many lower-income people stand to benefit.”
Though openly skeptical, the judge let go forward the lawsuit contending Trump’s action in ending the CSR payments was illegal. “Although the case is at an early stage, and although it’s a close question, it appears initially that the Trump Administration has the stronger legal argument,” Chhabria wrote.
On the same day (Oct. 25), the Congressional Budget Office (CBO) issued its review of the proposed Bipartisan Health Care Stabilization Bill, authored by Lamar Alexander (R.-Tenn.) and Patty Murray (D.-Wash.). The CBO said the bill, now stalled in the Senate, would save the federal government nearly $4 billion over 10 years and would not substantially change coverage rates.
Meanwhile, health care think tank Avalere released a report about premiums and coverage for 2018 under Obamacare, predicting premiums will rise by an average of 34 percent. Iowa will see the largest jump at 69 percent, while Alaska — already hit hard in prior years — will enjoy a decrease of 22 percent. Avalere further noted that most consumers on the ACA marketplaces won’t feel any real effect since 87 percent of them are subsidized. Only those who don’t qualify for subsidies will have to eat the higher out-of-pocket expense.
Avalere attributed the steep increases to elimination of cost-sharing reduction (CSR) payments, lower than anticipated enrollment in the marketplace, limited insurer participation, insufficient action by the government to reimburse plans that cover higher cost enrollees (e.g., via risk corridors), and general volatility around the policies governing the exchanges