Federal judge denies Dem AG’s request to force Obamacare payments

A federal judge in California refused a request by Democratic attorneys general Wednesday to resume critical Obamacare payments, forcing the issue squarely into Congress’s lap as GOP leaders and President Trump decide whether to back a bipartisan bill that approves the money for two more years.

U.S. District Court Judge Vince Chhabria said the Trump administration, which cut off the “cost-sharing reductions” earlier this month, appeared to have the better legal argument at this stage, since GOP lawmakers already secured a judgment against President Obama for paying insurers without Congress’ approval.

Second, he said many of the complaining states had taken steps to insulate their residents from the fallout, despite sky-is-falling rhetoric from attorneys who sought relief.

“State regulators have been working for months to prepare for the termination of these payments. And although you wouldn’t know it from reading the states’ papers in this lawsuit, the truth is that most state regulators have devised responses that give millions of lower-income people better health coverage options than they would otherwise have had,” wrote Judge Chhabria, an Obama appointee. “This is true in almost all the states joining this lawsuit.”

The cost-sharing payments are federal reimbursements for insurers who pick up low-income customers’ costs on Obamacare’s exchanges.

Sensing Mr. Trump’s threat to cut off the money in his push to dismantle Obamacare, many insurers increased their premiums to make themselves whole.

As a result, many states loaded premiums increases onto silver plans used to calculate a separate stream of subsidies that help Obamacare customers afford their premiums. That means some customers who choose gold plans, for instance, will see an even better deal than before Mr. Trump decided to cut off the payments.

The extra cost will be borne by taxpayers, however, and not all states were prepared as others to adjust to the loss of cost-sharing payments.

Analysts say some shoppers might be confused by the interlocking parts in their quest for the best deal.

Also, depending on where the premium increases fell, some people who do not qualify for subsidies will face the brunt of higher premiums instead of getting a better deal.

A bipartisan deal in the Senate would fund the cost-sharing payments in 2018 and 2019.

In exchange, Republicans would receive long-sought flexibility for states to swiftly reshape their markets under Obamacare, although within limits.

Mr. Trump hasn’t offered a clear position on the bill, though he’s suggested he will try to pull the bill to the right to satisfy House conservatives and set the table for renewed repeal efforts.