A federal judge ruled today that the Trump administration can stop making Affordable Care Act cost-sharing reduction (CSR) subsidy payments while he is considering a state effort to keep the program in place.
U.S. District Judge Vince Chhabria denied a request by California and 18 other jurisdictions for a restraining order that would preserve the CSR subsidy payment stream.
But Chhabria suggested, in a footnote, that insurers may still have a chance to recover the $1 billion in CSR subsidy payments that they were expecting to collect from the program for rest of this year.
"Although they are recouping the lost CSR payments through 2018 premium increases, it appears those increases don't compensate for the missed payments in October, November and December of 2017," Chhabria writes in a footnote in an opinion explaining the ruling.
Chhabria said he will not issue a restraining order to protect the insurers from harm as a result of the mid-year halt in CSR payments, because "financial harm is almost never irreparable harm."
"The insurance companies could presumably recover that money once this case is over, if not through a judgment by this court, then through lawsuits brought under the Tucker Act," Chhabria writes.
The court has posted a collection of documents related to the case, State of California et al. v. Donald J. Trump et al., and a video recording of a hearing that took place on Monday, here.
CSR Subsidy Program Basics
The drafters of the Affordable Care Act created the Affordable Care Act public exchange plan system to give people a way to shop for health insurance from commercial insurers on an apples-to-apples basis, and to create a vehicle for distributing health insurance subsidies.
One program, the advance premium tax credit program, helps exchange users with income from 100% to 400% of the federal poverty level, or from 138% to 400% of the federal poverty level in some states, to pay exchange plan premiums.
The CSR subsidy program helps exchange plan users with income under 250% of the federal poverty level pay their plan deductibles, co-payments and coinsurance amounts.
The states, and the administration of former President Barack Obama, have argued that the same permanent Affordable Care Act appropriation that funds the advance premium tax credit subsidy program also funds the cost-sharing reduction subsidy program, because both programs are two sides of the same coin.
