Judge Restores ACA Cost-Sharing Reduction (CSR) Payments

A federal judge has ruled in favor of a Montana health insurer, which brought suit to be paid $5.3 million in cost-sharing reduction (CSR) payments it said was due for 2017 under provisions of the Affordable Care Act (ACA, or Obamacare).

judge-restores-aca-subsidiesPresident Trump ended the reimbursement program a year ago, saying the funds for the CSRs had never been authorized by Congress.

Judge Elaine D. Kaplan of the U.S. Court of Federal Claims said the lack of appropriations doesn’t matter.

“The government violated a statutory obligation created by Congress in the Affordable Care Act when it failed to provide Montana Health its full cost-sharing reduction payments for 2017,” Kaplan said, adding that Congress’ failure to appropriate funds does not wipe out the obligation.

The cost-sharing payments were established to reimburse insurers for lowering their premiums on policies for low- and middle-income consumers. Republicans in the House of Representatives, where all spending bills must originate, however, brought suit to end the program, saying the funds had never been authorized.

In that case, Judge Rosemary M. Collyer of the U.S. District Court for the District of Columbia said the payment of billions of dollars in cost-sharing subsidies — without an appropriation — “violates the Constitution.” The Obama administration appealed that decision, but President Trump later terminated the appeal by executive fiat, ending the program.

Judge Kaplan, however, cited the text of the ACA, which requires the Health and Human Services (HHS) secretary to “make periodic and timely payments” to insurers equal to the value of the cost-sharing reductions they give consumers.

Montana Health will be reimbursed from the Judgment Fund, a permanent pool of money that Congress appropriates to repay claims against the government. If other health insurers follow suit and seek CSR reimbursement, that fund could be on the hook for billions.

NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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