Insurer Sues Trump for Cutting Off Subsidies

JM Ashby
Written by JM Ashby

The first lawsuit of its kind has been filed against the Trump regime for cutting off cost-sharing reduction (CSR) payments.

Maine Community Health Options (MCHO), which is the largest provider for individuals in the state, says Trump's decision to cut off CSR payments is costing them money for coverage they're required to provide.

A December report from Maine’s Bureau of Insurance says MCHO lost $1.9 million in October alone due to the loss of the CSRs, and the company’s lawsuit says it lost out on at least $5.6 million for the remainder of 2017.

The federal lawsuit, filed in late December in the U.S. Court of Federal Claims in Washington, D.C., is the first to hit the Trump administration on the CSR cuts since more than a dozen left-leaning states banded together in October to sue.

Trump justified his decision by saying the CSR payments are "lining the pockets of insurers" but that's not exactly what's happening here.

The cost-sharing payments are redistributed to compensate insurers who cover a disproportionate number of sick people. Insurers cannot cut off or turn away people with pre-existing conditions so they're compensated for covering them.

This has cost insurers money, which I'm sure no one really cares about, but it also costs average people money. Individuals who don't receive subsidies have seen their individual premiums increase because the CSR payments have been cut off.

While Maine Community Health Options (MCHO) is the first insurer to file a lawsuit against the Trump regime, a group of states led by New York have already filed a lawsuit for similar reasons.

  • muselet

    If the health insurance market—not just for individual policies, but the whole shootin’ match—survives R sabotage, I’ll be very surprised.