The Trump administration and House of Representatives Monday asked a federal court for another 90-day delay in a lawsuit over Obamacare insurance subsidies, undermining the future of the health care marketplaces as insurers look for certainty from the government before committing to offer coverage next year.
“The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action,” the House and White House wrote to the court.
If the request is approved, the parties would have to file another update in 90 days.
“We continue to work with the Trump administration on a solution,” said AshLee Strong, spokeswoman for Speaker Paul Ryan.
The suit, House v. Price, centers on Obamacare’s cost-sharing program, which reimburses health insurers to help low-income people make co-payments at the doctor or hospital. The case was brought by House Republicans during the Obama administration. But the case has taken on added significance as Republicans try to repeal the health law: without the $7 billion in payments, insurers say they cannot remain afloat in the Obamacare markets.
President Donald Trump has argued that the markets are fatally flawed and will collapse no matter what his administration does. He also suggested that the ensuing chaos could entice Democrats to come to the bargaining table and help craft a health care overhaul.
The administration declined to say if it will make more cost-sharing reduction payments.
“Going forward, we are weighing our options and still evaluating the issues,” said HHS spokeswoman Alleigh Marré. “Congress could resolve any uncertainty about the payments by passing the AHCA and reforming Obamacare’s failed funding structure.”
The subsidies have already been paid for May.
Insurers expressed relief the administration didn’t cut off the subsidies immediately, but they stressed they need to know whether the payments ultimately will be continued.
“Time is really running out,” said Ceci Connolly, CEO of the Alliance of Community Health Plans, noting that insurers are now filing 2018 rates. “The uncertainty is becoming nearly impossible for plans and the families that count on these subsidies.”
The Blue Cross Blue Shield Association today released a blueprint laying out principles that it believes must be included in any health care overhaul, including protection for individuals with pre-existing conditions and financial assistance that varies by income, age and geography. But taking precedence is the more immediate threat that the subsidies will go away.
“There’s a urgent need to have certainty about what will happen,” said Justine Handelman, BCBSA’s senior vice president for the office of policy and representation.
The legal drama over the subsidies began in late 2014 when former House Speaker John Boehner filed a lawsuit against the Obama White House, arguing that Obamacare’s cost-sharing program was never legally funded in the health care law and that the White House was illegally financing the program.
The cost-sharing program wasn’t the only issue at stake — the House had never been allowed to sue the White House before.
Early last year, the House prevailed on both issues. U.S. District Court Judge Rosemary M. Collyer ruled the House could sue and that the Obama administration had been illegally funding the subsidies. Collyer ruled the payments could continue pending appeal.
The Obama administration appealed to the D.C. Circuit Court of Appeals. Most legal analysts expected the Obama White House — or a Hillary Clinton White House — to prevail because that appeals panel has several judges appointed by Democrats.
But Trump’s election victory upended those plans, converting the lawsuit into a battle between the Republican House and Republican White House. His administration sought a delay in late February, giving it until today to inform the court how it wanted to proceed.
If the Trump administration ultimately drops the appeal, the subsidy payments — which are made monthly — could come to a sudden halt. Insurance companies are allowed to leave the exchanges as soon as the payments end, but it is unclear whether they would opt to exit and to drop patients with little notice. Dropping the appeal also means that the decision to allow the House to sue the White House would stand — a precedent that a future White House would likely fight.
In the Trump administration allows the appeal move forward, the House would almost certainly lose on both issues in the appeals court — a prospect the House would like to avoid.