The Affordable Care Act requires insurers to reduce deductibles and other out-of-pocket costs for certain low-income consumers. The “cost-sharing” subsidies, which total $7 billion a year, compensate insurers for these discounts. Seven million people selecting marketplace plans for 2017 qualified for cost-sharing subsidies. They account for 58 percent of the people signing up for plans this year.
House Republicans sued the Obama administration, saying that the spending — in the absence of an appropriations law — was unconstitutional. A Federal District Court judge agreed and ordered a halt to the payments, but suspended her order to allow the government to appeal.
Democrats and consumer advocates say millions of people could lose coverage if the Trump White House reversed the position of the Obama administration, dropped the appeal and accepted the argument of House Republicans.
The Trump administration has not clearly indicated its position on the appeal. Asked to clarify, the Department of Health and Human Services sent a written statement on Monday: “The precedent is that while the lawsuit is being litigated, the cost-sharing subsidies will be funded. It would be fair for you to report that there has been no policy change in the current administration.”
Its offer to continue paying subsidies could help stabilize insurance markets and provide some assurance to health plans that are deciding now whether to participate in 2018. But the lawsuit still hovers like a menacing cloud over the insurance marketplaces. Many insurers, having lost hundreds of millions of dollars on Affordable Care Act business, have withdrawn or announced plans to do so, creating concern that people in some counties might not have health plan options next year.
Because of the uncertainty about the future of the Affordable Care Act and of the subsidies, insurers say they will demand higher premiums…