Judge Appears Unlikely To Halt Trump’s Plan To End Health Insurance Subsidies

SAN FRANCISCO (CBS SF) — A federal judge in San Francisco indicated Monday that he is unlikely to block plans by the administration of President Donald Trump to end health insurance subsidies.

U.S. District Judge Vince Chhabria suggested that California and 17 other states hadn’t proved they were in danger of imminent harm because most states have figured out a way around the subsidy termination announced by the Trump administration on Oct. 12.

“The state of California is standing on the courthouse steps, denouncing the president for taking away people’s health care, when the truth is that California has come up with a solution that is going to result in better health care for a lot of people,” Chhabria said.

The judge did not make a final ruling during an 80-minute hearing, but said he would issue a written decision either Tuesday or Wednesday morning on the 18 states’ request for a preliminary injunction blocking the termination.

Those states, led by California, plus the District of Columbia sued Trump and the U.S. health and human services and treasury departments in federal court in San Francisco on Oct. 13.

They claim the subsidies for low-income health insurance consumers are mandatory under the federal Affordable Care Act, also known as Obamacare.

The Justice Department, defending the law, contends Congress never legally appropriated funds for the subsidies.

Chhabria said the solution created by California is to allow health care insurers operating in the state to compensate for the loss of subsidies by raising premiums on only the second of four categories of insurance, known as the silver plan.

While customers will not receive subsidies on those plans, the federal law allows a loss to a customer in the silver category to be balanced by tax refunds, so that the consumers will come out even or better, Chhabria said.

The silver plan insurance has the second-lowest premium cost but the second-highest deductible of the four categories.

Chhabria said 40 to 45 states, anticipating Trump’s termination of the subsidies, have come up with similar solutions.

Deputy California Attorney General Gregory Brown argued that ending the subsidies will confuse consumers and cause insurers to leave the market. The states also say that helping consumers with tax refunds alone will cost more than the combination of refunds and subsidies.

The subsidies have cost more than $7 billion per year nationally, including $800 million in California.

Chhabria said any harm caused by the administration’s plan could be addressed in a future trial, but seemed doubtful the states had proved the imminent harm that would justify a pretrial preliminary injunction.

“It seems like California is doing a really good job, not only in avoiding harm but in actually benefiting people,” he said.

In addition to California and the District of Columbia, the states participating in the lawsuit are Connecticut, Delaware, Kentucky, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and
Washington.

TM and © Copyright 2017 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2017 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Bay City News Service contributed to this report.

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