Judge to review Trump's controversial Obamacare payments cut

SAN FRANCISCO, Oct 23 (Reuters) - A U.S. judge is set to hear arguments on Monday about whether to block President Donald Trump's decision to terminate controversial payments to health insurance companies under Obamacare.

U.S. District Judge Vince Chhabria in San Francisco federal court has said he would quickly issue a ruling following the hearing.

Several U.S. states sued the federal government and asked for an immediate order halting Trump's move while the case is being litigated.

Trump said earlier this month that his administration would stop paying billions of dollars in subsidies that help insurers give discounts to low-income households, one of several moves to dismantle the signature healthcare law of his Democratic predecessor, Barack Obama.

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Since then, Trump has alternately supported, and dismissed, an effort by Republican and Democratic senators that would reinstate the subsidies for two years until a broader replacement to the 2010 Affordable Care Act, commonly known as Obamacare, can be negotiated.

Meanwhile, Democratic attorneys general from 18 states and the District of Columbia asked Chhabria to direct the administration to continue the payments, saying the government risked destabilizing insurance markets should the subsidies cease.

While Democrats accused Trump of sabotaging Obamacare, the president argued that the subsidies made insurance companies "rich."

In a court filing on Friday, the U.S. Department of Justice pointed to a prior ruling from a Washington, D.C. federal court that said Congress had never appropriated the money for the subsidies. An appeal of that ruling is currently on hold.

The Justice Department also argued that insurers could bring their own lawsuits against the government in a special federal claims court in Washington. Such lawsuits would be more appropriate than one brought by U.S. states, DOJ argued.

At a minimum, the Justice Department said Chhabria should transfer the case to the same Washington court that issued the prior ruling.

Should the case stay in San Francisco, either side could appeal Chhabria's ruling to the 9th U.S. Circuit Court of Appeals, which is weighted with Democratic-appointed judges.

From there, any further appeal would go to the U.S. Supreme Court. (Reporting by Dan Levine; Editing by Cynthia Osterman)

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