SAN FRANCISCO—A federal judge on Monday hammered an attorney for California over the state’s push for a court order immediately reinstating “Obamacare” subsidies cut off by the Trump administration, saying California and other states had protected consumers from the loss of the funding.
U.S. District Judge Vince Chhabria did not issue a ruling but appeared highly skeptical of the request by California, 17 other states and the District of Columbia to force the government to make the payments as their lawsuit over the subsidies works its way through the courts, which will take months.
State attorneys general, led by California Democrat Xavier Becerra, argue the monthly payments to insurance providers are required under former President Barack Obama’s health care law. Without them, consumers will face higher costs and insurers will back out of the law’s health insurance markets, causing them to fall apart, the states say.
The cost-sharing payments reimburse insurers for providing lower-income people with discounts on out-of-pocket costs. President Donald Trump halted the subsidies earlier this month, criticizing them as insurance company bailouts.
California and other states had anticipated the subsidies would end and found a way to ensure consumers would not pay more for insurance, Chhabria, an Obama appointee, said during a hearing. The states limited the plans for which insurers could hike premiums to make up for the lost subsidies and ensured that many people will get more tax credits for their health insurance purchases, the judge said.
Chhabria peppered an attorney for California with questions about why he should force the administration to resume payments when the states had devised a workaround that would benefit many consumers.
“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 to that issue that is going to result in better health care for a lot of people,” Chhabria said.
Gregory Brown, who represented California at the hearing, said the loss of the subsidies was creating “uncertainty and chaos” that could lead insurance companies to opt out of the health law.
Brown also said the Trump administration’s decision would “spook consumers.”
The judge said it was important to have stability and certainty in health insurance markets, but the states were talking about problems that could occur years from now, by which time he could have ruled on the case.
The White House has said the government cannot legally pay the subsidies because there is no formal authorization from Congress.
However, the administration had been making the monthly payments even as Trump threatened to cut them off to force Democrats to negotiate over health care. A bipartisan effort in Congress to restore the payments has run into opposition.
The states argue that the Trump administration violated a law requiring government agencies to obey existing statutes and follow orderly and transparent procedures.
Democratic attorneys general have pushed back against Trump’s agenda in the federal courts, looking to block the president’s attempts to roll back Obama’s policies on the environment, health care and immigration.
The states joining California in the lawsuit are: Connecticut, Delaware, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, along with the District of Columbia.