House Speaker Paul Ryan (R-WI) said Thursday the House would continue its legal challenge against insurance subsidies for low-income consumers, but indicated President Donald Trump's administration should continue payments, The Wall Street Journal reported.
In the lawsuit, which has been delayed since December, House Republicans argue insurance subsidies should be funded through the appropriation process while President Barack Obama's administration argued the ACA had established funds for insurance subsidies.
- HHS has been allowed to make payments to payers while the lawsuit proceeds, but the Trump administration could decide to end the payments or stop defending the ACA in court, but this would cost payers billions per year and discourage participation in insurance exchanges.
Payers are anxiously waiting for a sign from the Trump administration on what will happen to cost-sharing reductions, which are payments to insurers to limit the cost of health plans for low-income consumers who are covered through insurance exchanges.
Republicans initially launched their lawsuit against the ACA cost-sharing reductions in 2014. A judge ruled last year that the payments were improper, but the Obama administration was allowed to continue the payments while the case was in appeal.
After the lawsuit was delayed in December, House Republicans and the Trump administration requested a continued stay of proceedings in February “to allow time for a resolution that would obviate the need for judicial determination of this appeal, including potential legislative action.” A status update is expected in the case by May 22 and, as of now, the status is stalled.
Cost-sharing reductions to payers are estimated to deliver around $7 billion in 2016, which helps to cover nearly six million people, a group of Georgetown University researchers wrote for the Commonwealth Fund. Payers do not know if these funds will be available in 2018 and they have less than three months before the deadline to submit initial plan designs and rate suggestions.
The Trump administration has delivered mixed signals on support for insurance exchanges so far, which has left many payers skittish about participation for 2018. Humana has already announced that it will leave exchanges and Anthem looks ready to leave a significant portion of exchanges where it operates. Unless payers know what is happening with cost-sharing reductions soon, more may tilt in that direction.