OLYMPIA — Attorney General Bob Ferguson joined a multistate coalition Friday, October 13, 2017 in filing a lawsuit seeking to force the Trump Administration to continue a key Affordable Care Act funding provision after the President announced on Thursday he would stop the payments.
The administration announced that it will unilaterally terminate cost-sharing reduction subsidies (CSRs), a key subsidy designed to reduce out-of-pocket health care costs for low-income Americans. The lawsuit, filed today in California, asserts that the President’s decision to withhold the payments is illegal and unconstitutional. Ferguson asks the court to force the Trump Administration to continue paying for CSRs.
The administration’s action will increase the premiums of more than 100,000 Washingtonians by as much as 28 percent.
Coupled with the President’s Thursday executive order seeking to relax rules regulating insurance coverage requirements, the administration’s decision to cease CSR payments further undermines ACA insurance exchanges across the country.
Open enrollment for plans on the ACA health exchange begins on Nov. 1. Absent court intervention, Washingtonians will be hit with premium increases caused by the administration’s decision.
“President Trump may not like the Affordable Care Act, but trying to sabotage it on the backs of hard-working Washingtonians is wrong — and illegal,” Ferguson said. “President Trump’s decision to end vital subsidies is an assault on thousands of working families and individuals in our state,” said Washington Insurance Commissioner Mike Kreidler. “Continuing the federal funding that helps people buy health insurance is critical to maintaining a stable market in Washington. This is not a bailout for insurance companies. It’s a lifeline for people who depend on affordable health insurance.”
“President Trump’s decision to stop making the cost-sharing reduction payments is nothing more than a deliberate and unconscionable sabotage of the personal health care of millions of Americans,” Gov. Jay Inslee said. “It will directly harm middle-class families by hiking their premiums, deductibles and other out-of-pocket costs, while creating chaos and instability in the marketplace. After months of failed repeal votes in Congress, the President is now clearly determined to repeal health care for millions by executive action. His willingness to threaten the lives of hard-working Americans for political purposes is deeply disturbing. I urge Republicans and Democrats in Congress to take immediate action to continue these payments, which help lower costs and increase choices for families across the country. Our nation must reject these blatant attempts at sabotage and develop bipartisan solutions to stabilize our health care system. Our state stands ready to engage in productive conversations toward that goal.”
The ACA relies on two types of subsidies: premium subsidies, paid to people with an income less than four times the poverty level, and CSRs, paid directly to participating insurers to reduce the out-of-pocket costs for people with an income below 250 percent of the poverty level.
Both subsidies are critical to successful insurance exchanges. Nearly 70,000 Washingtonians receive CSRs. If the federal government fails in its obligation to pay insurers for these CSRs, those Washingtonians, plus an additional 34,000 enrollees who have purchased similar plans, will face dramatic premium increases that threaten their ability to obtain health care.
Regardless of whether the federal government issues CSR payments to insurance companies, the companies are still required by the ACA to offer the cost reductions to eligible enrollees. Without the CSR reimbursements, the companies will pass on the increased costs to other health care consumers.
All of the 204,000 Washington enrollees in ACA plans could face premium increases — not just those directly receiving CSRs.
In addition to constitutional violations, the states’ lawsuit alleges that the President’s decision to withhold mandatory CSR payments violates both the ACA and the Administrative Procedure Act.
Assistant Attorney General Jeff Sprung and Senior Assistant Attorney General Rene Tomisser are handling the case for Washington.
In August, a federal court granted Ferguson’s motion to intervene in a separate lawsuit defending this key funding provision.