ACA Judge Refuses to Restore Subsidy Payments (Audio)

resumption of the payments while the litigation plays out. With us. To help explain all this is Brian Rye. He is Bloomberg Intelligence's senior government analyst and he's here with me in the studio in Washington. Brian, thanks for being being here. Tell us a little bit first, just about these payments, what they are, what they're what they're designed to do. Hi, Greg,

thanks for having me. These are c s R cost sharing reduction payments that are mandated under the a c A. And these are different from the tax credits that lower

income individuals can use to pay for the premiums. These CSR payments are intended to help those uh those lower income into the rules pay their out of pocket expenses, their co pays, coinsurance deductibles, those things, and that at play here is the fact that insurance companies have to make those payments to lower income individuals on silver plans under the A c A. What's not so certain is whether or not the government is able to reimburse the

insurance companies for those payments, and that's at the heart of this lawsuit. Brian, what was the judges reasoning in refusing to restore the subsidies. I think the reasoning had

been that a this wasn't necessarily a new issue. The threat that the Trump administration would terminate these payments had been out there for for several months, and several states, including California, who had taken the lead on this lawsuit, had indicated that they were preparing to do this, either by raising premiums to offset the cost or offset the

loss of these payments, or otherwise shielding affected individuals. And so I think the judge rule that, look, um, you've already had a chance to prepare in many states had in fact prepared for that. So there's no need to force the administration to do this. And I think we'd go back to tying this to an the law student at the House administered that the House of Representatives had filed against the then Obama administration saying that, look, Congress

had not appropriated money for these CSR payments. So even even though they were authorized by the A c A and less Congress appropriates them, Um, you know, that's these payments can't be made. And um that had been the initial ruling that that a federal judge had agreed with. Well, Brian, is the judge right in the sense that if he says that the states have basically already prepared for these

payments uh not to be made. Uh? Is it the case that these caut sharing the csrs are not really as important as some of the critics of the president have been saying. There, you know, it remains to be seen. I think the feeling is that and when the CBO looked at this, they said, there might be a slight you know, loss of one million people, one million fewer people might have insurance because of some insurers might decide

to pull out or other changes in there. But the fact is, if premiums, if the gross premium or to rise in the value of the tax credits that these uh silver planned individuals would get would also rise as well, So there might there shouldn't be a net impact, uh to a lot of the people who you would think would be affected by this. Now, again, if if insurers decided to drop out, if there are other uncertainties and maybe people have fewer choices, then that could obviously have

a bit of a problem. But again, I think the judge rule that you've had time to prepare for this, and and so that's enough. So Brian, the attorney generals, the Attorney's General who won permission to defend the subsidies in that case before the US Court of Appeals in Washington,

will that case be the determining factor here? It could be. Now, at the same time that this is happening in the courts, you do have an effort in Congress to to essentially try and authorize those payments and make the court essentially moot. You haven't what's the Alexander Murray agreement that would restore or essentially provide appropriated funds for these payments for a two year period and twenty nineteen UM That has some support and Rich it's not clear if that's something that

they're going to bring to the floor. For a vote. I wouldn't be surprised to see that happen before the end of the year, perhaps in December, tied with the budget battle that's going or the appropriations battle that's going to take place in December. So I think in the near term it's probably more important to keep an eye on whether it's the Alexander Murray, the Hatch Brady, some sort of compromise that would allow Congress to appropriate these

funds and settle the question that way. Brian only about a minute left, But I guess one of the big questions with any of those congressional proposals is whether the president will support them. Where does he stand right now? What day of the week is it? It's um you is something that changes frequently. I think at the end of the day, the President would like to be able to sign something um that that that addresses this while at the same time leaving the door open for another

attempt to repeal and replace the law. Longer term, uh, sometime probably next year, once they're done with tax reform. UM if they can do that, and then I think the President would be happy to sign that, But he doesn't want to be known as the guy who saved Obamacare.

I want to thank our guests. That's Brian Ray. He's a senior government analyst for Bloomberg and told intelligence talking to us about the new federal court ruling that refused to force the Trump administration to again start making the disputed Obamacare payments to insurance companies. I'm sure we'll be

talking about Obamacare more in the future. Coming up on Bloomberg Law, the Trump administration weighs in in the case of a California college student who was told he couldn't hand out copies of the Constitution because he wasn't in the school's designated free speech zone. We'll talk about that court case coming up in a moment.