Federal Court To Hear Arguments Over Trump’s Cuts To Obamacare Subsidies

October 23, 2017 11:42 a.m.

On Monday, 19 states are expected to tell a federal court that the Trump administration decision to cut off billions in subsidies to health insurance companies is “illegal and arbitrary”—violating both the text of the Affordable Care Act and the Constitution’s “take care” clause—and that it threatens the health coverage of millions of Americans.

The states, in a case spearheaded by California Attorney General Xavier Becerra (pictured above), seek a temporary restraining order blocking the President’s decision and forcing the administration to make the October payment to insurers while the case goes forward. As efforts in Congress to appropriate the payments are stalling in the face of opposition from House Republicans and the White House, the lawsuit may be the only hope for restoring the funding this year.

In arguments scheduled for Monday afternoon west coast time before the U.S. District Court for the Northern District of California, the states are expected to argue that the administration’s sudden cutoff of the cost-sharing reductions (CSRs) after eight months of making the payments has thrown the individual insurance market into chaos. 

“Defendants’ sudden reversal has caused health insurance premiums across the country to skyrocket, in some states by as much as 30 percent,” the states’ brief says, though it leaves out that most people will be protected from the increase by the ACA’s tax credit system. “Consumers will begin shopping for insurance at those unnecessarily inflated rates when open enrollment begins on Nov. 1. Many will be unable to afford these higher premiums, and will abandon the health insurance market altogether. That will harm not only the States’ residents but the States themselves, which will be forced to spend billions more on health care costs when these uninsured residents seek emergency care at State-funded facilities.”

Just like in other high-profile lawsuits against the Trump administration, such as the challenge to the travel ban, the challengers are citing the President’s own words as evidence of his malicious intent.

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“I cut off the gravy train,” Trump boasted at a cabinet meeting in mid-October, in remarks cited in the states’ lawsuit. “Because Obamacare is finished. It’s dead. It’s gone. It’s no longer—you shouldn’t even mention. It’s gone. There is no such thing as Obamacare anymore.”

This language, the states argue, shows the President is not committed to his constitutional obligation to “faithfully execute” the Affordable Care Act.

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