WASHINGTON -- A federal appeals court panel in Washington said late Tuesday that a group of states can join in a suit to defend the legality of government "cost sharing" subsidies for copayments and deductibles under the Patient Protection and Affordable Care Act if the Trump administration decides to stop paying the money.
President Donald Trump has been threatening to do just that for months, and he ramped up his warnings after the GOP's drive to repeal and replace the Affordable Care Act fell apart in the Senate last week.
The subsidies help keep premiums in check, but they are under a legal cloud because of a dispute over the wording of the 2010 law. Trump has speculated that he could force Democrats to make a deal on health care by stopping the payments.
The court's decision is "a check on the ability of the president to sabotage the Affordable Care Act in one very important way," said Tim Jost, professor emeritus at Washington and Lee University School of Law in Virginia.
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Because of the ruling, legal experts said, states can now sue if the administration cuts off the subsidies. Also, they said, the president won't be able to claim he's merely following the will of a lower court that found Congress had not properly approved the money.
New York Attorney General Eric Schneiderman said in a statement that the decision is "good news for the hundreds of thousands of New York families that rely on these subsidies for their health care."
The Justice Department had no comment. The White House reissued an earlier statement saying that "the president is working with his staff and his Cabinet to consider the issues raised by the ... payments."
Trump has made his feelings clear on Twitter. "If ObamaCare is hurting people, & it is, why shouldn't it hurt the insurance companies," he tweeted early Monday.
He elaborated in an earlier tweet, "If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies ... will end very soon!"
In a twist, the appeals court panel seemed to take such statements into account in granting 17 states and the District of Columbia the ability to intervene on behalf of consumers.
The judges' decision said states' doubts that the administration could adequately defend their interests in court were fanned by "accumulating public statements by high-level officials ... about a potential change in position."
"He's really a terrible client, President Trump is," University of Michigan law professor Nicholas Bagley said. "The states point to his public statements and say, 'Are you kidding me? We know the president is poised to throw us under the bus and we know because he said so.'"
The health law requires insurers to help low-income consumers with their copays and deductibles. Nearly 3 in 5 healthcare.gov customers qualify for the assistance, which can reduce a deductible of $3,500 to several hundred dollars. The annual cost to the government is about $7 billion.
The law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.
House Republicans trying to thwart the Affordable Care Act sued the Obama administration, arguing that the law lacked specific language appropriating the cost-sharing subsidies.
A district court judge agreed with House Republicans, and now the case is before the U.S. appeals court in Washington.
If Trump makes good on his threat, experts estimate that premiums for a standard "silver" plan would increase by about 19 percent and more insurers might decide to leave already shaky markets.
Information for this article was contributed by Andrew Harris, Zachary Tracer and Justin Sink of Bloomberg News.
A Section on 08/03/2017