trending Market Intelligence /marketintelligence/en/news-insights/trending/8KLjMAPl5ZNosVKfmCsmNg2 content esgSubNav
In This List

States seek emergency order to force Trump to pay ACA subsidies


Insight Weekly: Energy crisis cripples Europe; i-bank incomes rise; US holiday sales outlook


Japan M&A By the Numbers: Q3 2022


Insight Weekly: Reviving nuclear power; 2023 outlook for US financials; PE funds fuel EV sector


Insight Weekly: Energy reforms after midterms; Crisis ends 'age of gas'; bank deposits fall

States seek emergency order to force Trump to pay ACA subsidies

On the same day that President Donald Trump reversed course and backed away from a bipartisan bill aimed at restoring healthcare subsidies to millions of Americans, a group of state attorneys general sought an emergency order forcing the administration to pay the funds.

The attorneys general from New York, California and 16 other states and the District of Columbia filed a motion in the U.S. District Court for the Northern District of California seeking an emergency temporary restraining order to compel the Trump administration to pay cost-sharing reduction, or CSR, payments under the Affordable Care Act — funds that Trump disclosed on Oct. 12 he was terminating.

The subsidies, which total about $7 billion annually, are intended to help about 7 million low- and moderate-income Americans who obtain their health coverage on the ACA exchanges pay for out-of-pocket costs for prescription drugs and doctors visits.

The Trump administration said it determined under its interpretation of the ACA that Congress had never formally appropriated the funds for the subsidies.

The same cadre of 19 attorneys general seeking the emergency order also filed a lawsuit Oct. 13 against the Trump administration seeking to get the subsidies restored.

But with the subsidies now cut off, Americans cannot wait for the outcome of that lawsuit, which could take many months, California Attorney General Xavier Becerra explained to reporters during an Oct. 18 briefing.

"In that intervening period of time, millions of Americans could lose their insurance," he said. "A victory a year from now won't do anyone any good if you've got to take your child to the hospital this week."

So the states are seeking emergency relief now, Becerra said.

"Time is definitely money in this case," he said.

Becerra accused Trump of "willingly breaking the law by refusing to make required payments that keep healthcare affordable for millions of Americans."

Trump has "decided he is going to pick and choose which rules he's going to enforce, which laws he's going to follow," the California attorney general said.

But as president, "he doesn't have that choice," Becerra said. "He is required as an executive to implement the law, enforce the laws."

"He wants to shatter the certainty. He wants to make it so the Affordable Care Act doesn't work," Becerra added. "That's sabotage."

"Trump's abrupt move to cut these subsidies is reckless, dangerous and illegal," New York Attorney General Eric Schneiderman added in a statement.

Trump dumps bill support

Trump also abandoned his support for a bipartisan bill intended to put some short-term measures in place to stabilize the individual insurance market, including restoring the CSRs for two years.

"We've said all along that we want something that doesn't just bail out the insurance companies, but actually provides relief for all Americans, and this bill doesn't address that fact," White House Press Secretary Sarah Huckabee Sanders told reporters.

The legislation, sponsored by Sens. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, and Patty Murray, D-Wash., the ranking member, was a "good step in the right direction," Sanders said. "But it's not a full approach, and we need something to go a little bit further to get on board."

Asked straight up if Trump did not support the Alexander-Murray deal in its current form, Sanders responded, "Correct," adding that Trump "stated that pretty clearly today," referring to remarks he made during a meeting with Senate Finance Committee senators and in a tweet.

House Speaker Paul Ryan, R-Wis., and Senate Finance Committee chairman Orrin Hatch, R-Utah, also raised objections to the Senate bill.

Other Republicans, including Sens. Bob Corker of Tennessee and Lisa Murkowski of Alaska — both of whom signed on as co-sponsors — expressed their support for the legislation, as did Sens. Susan Collins of Maine and John McCain of Arizona.