The Trump regime will apparently tell the federal appeals court overseeing the challenge to the legality of cost-sharing subsidies to insurance companies in Obamacare to hold the case over for another 90 days, during which time the payments will still be made. These cost-sharing-reduction payments are critical to insurance companies and to low-income people who receive the subsidized care. On its face that’s good news, but another delay in a final decision on the payments plays into Trump’s long game of sabotaging the law as former Acting Administrator of the Centers for Medicare and Medicaid Services Andy Slavitt explains in a series of tweets.
That’s because insurers are deciding in the next few weeks if they’ll remain in the exchanges for 2018, as well as the premiums they will charge. Slavitt says that insurance company actuaries “with no exceptions I'm aware of will price 2018 assuming no payment,” and will hike premium rates to make up the lost payments. He explains that this is a "’go for broke’ strategy to force Trumpcare. Ending lawsuit is explicit. Deferring gets same outcome w potential for deniability."
Complicating this, however, is the fact that the states are entering the legal fray. Fifteen states along with D.C. filed a motion last Thursday to be allowed to defend the payments, since Trump's White House can't be expected to. They’ve asked that the court hear the case promptly, which could force the issue, if the court decides to allow their intervention.
If the states are allowed to intervene, however, they could pursue the appeal even if Trump decides to drop it. With the appeal in place, the injunction couldn’t take effect until the case is heard and decided.
What’s more, the states are very likely to prevail. Not on the merits: as I’ve written before, the House is right that there’s no appropriation to make the cost-sharing payments. But the D.C. Circuit is likely to be skeptical of the district court’s conclusion that the House of Representatives has standing to sue. That’s why the states want the court to decide the case quickly: they hope to get rid of the lawsuit once and for all.
Allowing the states to intervene would not eliminate uncertainty. The D.C. Circuit could always surprise us and affirm the district court’s decision. Premiums for 2018 would still have to rise in response to the risk that payments might stop sometime next year. And even if the House loses, the Trump administration might be tempted to stop making the payments anyhow—although it’s not clear that it has the legal authority to do so without going through the cumbersome process of withdrawing an Obama-era rule.
Still, insurers could breathe a bit easier. If the states are allowed to intervene, Trump couldn’t blow up the individual markets in a fit of pique.
These are all ifs, and right now it’s unclear that the court is going to be willing to either let the states intervene or recognize that it needs to act quickly to end the uncertainty insurers are facing right now.