Judge rejects bid by 18 US states to revive Obamacare subsidies

SAN FRANCISCO/WASHINGTON, Oct 25 (Reuters) - A U.S. judge in California on Wednesday refused to block President Donald Trump's decision to end subsidy payments to health insurers under Obamacare, rejecting a request by Democratic attorneys general from 18 U.S. states.

U.S. District Judge Vince Chhabria in San Francisco sided with the Trump administration, saying the government does not have to make the payments while litigation over the subsidies unfolds.

Chhabria, appointed by Democratic former President Barack Obama, wrote that although the case appears to be a close call "it appears initially that the Trump administration has the stronger legal argument."

The Trump administration this month terminated the payments to the insurers, which help cover medical expenses for low-income Americans, as part of several moves to dismantle Obama's signature healthcare law formally known as the Affordable Care Act.

14 PHOTOS
Protests for and against Obamacare
See Gallery
Protests for and against Obamacare

Tea Party Patriots supporters hold signs protesting the Affordable Care Act in front of the Supreme Court as the court hears arguments on the health care reform bill on Tuesday, March 27, 2012.

(Photo By Bill Clark/CQ Roll Call)

Affordable Care Act supporters wave signs outside the Supreme Court after the court upheld court's Obamacare on Thursday, June 25, 2015.

(Photo By Bill Clark/CQ Roll Call)

A man holds signs during a protest on the second day of oral arguments for the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court building on March 27, 2012 in Washington, DC. Today is the second of three days the high court has set aside to hear six hours of arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

Sister Caroline attends a rally with other supporters of religious freedom to praise the Supreme Court's decision in the Hobby Lobby, contraception coverage requirement case on June 30, 2014 in Chicago, Illinois. Oklahoma-based Hobby Lobby, which operates a chain of arts-and-craft stores, challenged the provision and the high court ruled 5-4 that requiring family-owned corporations to pay for insurance coverage for contraception under the Affordable Care Act violated a federal law protecting religious freedom.

(Photo by Scott Olson/Getty Images)

An Obamacare supporter counter protests a Tea Party rally in front of the U.S. Supreme Court in the morning hours of March 27, 2012 in Washington, DC. The Supreme Court continued to hear oral arguments on the Patient Protection and Affordable Care Act.

(Photo by Alex Wong/Getty Images)

Affordable Care Act supporters hold up signs outside the Supreme Court as they wait for the court's decision on Obamacare on Thursday, June 25, 2015.

(Photo By Bill Clark/CQ Roll Call)

Ron Kirby holds a sign while marching in protest of the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court on March 26, 2012 in Washington, DC. Today the high court, which has set aside six hours over three days, will hear arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

A protester waves his bible in the air as he overpowered by cheers from supporters of the Affordable Care Act as they celebrate the opinion for health care outside of the Supreme Court in Washington,Thursday June 25, 2015. The Supreme Court on Thursday upheld the nationwide tax subsidies under President Barack Obama's health care overhaul, in a ruling that preserves health insurance for millions of Americans.

(Photo By Al Drago/CQ Roll Call)

Nuns, who are opposed to the Affordable Care Act's contraception mandate, and other supporters rally outside of the Supreme Court in Washington, D.C., U.S., on Wednesday, March 23, 2016. On Wednesday morning, the Supreme Court is scheduled to hear oral arguments in Zubik v. Burwell, a consolidated case brought by religious groups challenging a process for opting out of the Affordable Care Act's contraception mandate.

(Drew Angerer/Bloomberg via Getty Images)

Supporters of contraception rally before Zubik v. Burwell, an appeal brought by Christian groups demanding full exemption from the requirement to provide insurance covering contraception under the Affordable Care Act, is heard by the U.S. Supreme Court in Washington March 23, 2016.

(REUTERS/Joshua Roberts)

Protestors hold placards challenging 'Obamacare' outside of the US Supreme Court on March 4, 2015 in Washington, DC. The US Supreme Court heard a second challenge to US President Barack Obama's Affordable Care Act. The US Supreme Court faces a momentous case Wednesday on the sweeping health insurance reform law that President Barack Obama wants to leave as part of his legacy. The question before the court is whether the seven million people or more who subscribed via the government's website can obtain tax subsidies that make the coverage affordable. A ruling is expected in June.

(MANDEL NGAN/AFP/Getty Images)

 Linda Door (L) protests against President Obama's health care plan in front of the U.S. Supreme Court Building on March 26, 2012 in Washington, DC. Today the high court, which has set aside six hours over three days, will hear arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

Supporters of the Affordable Care Act celebrate after the Supreme Court up held the law in the 6-3 vote at the Supreme Court in Washington June 25, 2015. The U.S. Supreme Court on Thursday upheld the nationwide availability of tax subsidies that are crucial to the implementation of President Barack Obama's signature healthcare law, handing a major victory to the president.

(REUTERS/Joshua Roberts)

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Chhabria also said the kind of emergency order requested by the states was not necessary.

"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," Chhabria said.

"This is true in almost all the states joining this lawsuit," the judge added.

Representatives for California Attorney General Xavier Becerra, who is leading the lawsuit, did not immediately respond to a request for comment.

The subsidies were amounting to nearly $600 million a month. They were due to cost $7 billion this year and were estimated to grow to $10 billion for 2018, according to congressional analysts.

Democratic attorneys general from 18 states and the District of Columbia sued the federal government and asked for an immediate order halting Trump's move while the case is being litigated. They argued that terminating the payments harmed customers by raising insurance rates.

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

With the beginning of enrollment for 2018 insurance policies on Obamacare exchanges set for Nov. 1, Chhabria suggested that the states focus on communicating the message that they have devised a response to the subsidy cuts that prevents harm to a large number of people.

"If the states are so concerned that people will be scared away from the exchanges by the thought of higher premiums, perhaps they should stop yelling about higher premiums," Chhabria wrote.

Insurers say they do not profit from the subsidies under the Affordable Care Act, but pass them on directly to consumers to reduce deductibles, co-payments and other out-of-pocket medical expenses for low-income people.

Because insurers would raise premiums on policies in the absence of the subsidies, the government would be compelled to spend more on financial assistance to low-income Americans.

Earlier on Wednesday, the nonpartisan Congressional Budget Office found that a bipartisan Senate proposal to shore up Obamacare insurance marketplaces by reviving the subsidies would cut the U.S. deficit by $3.8 billion over the next decade.

Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.