Court Says State AGs Can Defend Cost-Sharing Subsidies

JM Ashby
Written by JM Ashby

This is a big deal.

The Fourth Circuit Court of Appeals in D.C. ruled yesterday evening that state attorneys general can intervene to defend the cost-sharing subsidies (CSR payments) included in Obamacare, the program that Donald Trump has repeatedly threatened to cut off.

This is significant because without the intervention of state attorneys, it would be left to Trump's Justice Department to defend the subsidies in court against a still-spending lawsuit against them filed by House Republicans.

The case, which dates back to administration of President Barack Obama, was filed by the Republican-led House of Representatives against the federal government in an effort to block the subsidy payments to insurers for the individual plans created by the Affordable Care Act, popularly known as Obamacare.

The court's order allows Democrats who back the law to have a say in the legal fight, giving them the power to block a settlement or appeal a ruling blocking the payments. They can also file briefs and their lawyers can participate in oral arguments.

Anyone who has paid even a little bit of attention should been skeptical of the Trump regime's willingness to mount a meaningful defense of a program they've threatened to cut off.

If the cost-sharing subsidies are ultimately cut off, insurance will become unaffordable for a large number of people and insurers may exit more markets.

Cutting off CSR payments would also increase costs for the federal government under current law because the government's share of premium subsidies for individual insurance policies would automatically increase.

In addition to state attorneys general, California's insurance commissioner Dave Jones has also indicated that he will sue the Trump regime if they arbitrarily cut off CSR payments. I doubt he'll be alone.

  • Ellen Kuhlmann

    I think the SC will decline to hear this case if appealed to them. Seems a no brainer to let the states in on defending the payments.

    • muselet

      I hope you’re right.


  • muselet

    This is a very sensible decision which will be appealed to the Supreme Court.

    I fearlessly predict that Mr Associate Justice* Neil Gorsuch will vote, along with Mr Chief Justice John Roberts, Mr Associate Justice Clarence Thomas, Mr Associate Justice Samuel Alito, and Mr Associate Justice Anthony Kennedy (styled “Weathervane” by Charlie Pierce), to overturn the Fourth Circuit’s decision and leave the defense of CSR payments to the tender mercies of Mr Attorney General Jefferson Beauregard Sessions III.

    The health insurance industry will not emerge unscathed from the chaos and destruction the Rs are hell-bent on raining down upon it (and us). If the Rs have their way, I’ll be surprised if there is a health insurance industry in ten years.


    • Badgerite

      Is Kennedy’s vote a given on this? I haven’t looked at the issue but the right of state AGs to intervene in this case should not necessarily be based on where the justices have stood on any case before them in the past pertaining to the ACA. Isn’t there a whole separate issue involved here independent of the ACA?

      • muselet

        Anthony Kennedy’s vote isn’t a given on most issues. This just seems to me the sort of question on which he would wait to be persuaded by either the Court’s self-proclaimed “originalists” (“The Constitution contains no explicit, affirmative right of states to intervene in lawsuits brought by one branch of the federal government against another. Therefore, the Framers must have meant to prohibit such intervention.”) or the reality-based justices.

        Since the states stand to bear some costs if CSR payments get zeroed out, it seems intuitively obvious they should be allowed to be parties to this lawsuit. However, this is a matter of law, so intuition is a poor guide to what will happen.


        • Badgerite

          I think this might be governed under Federal Rules of Civil Procedure, Rule 24. Check it out. I believe it is discretionary on the part of the Court to allow intervention but it seems to me that what the states are pleading falls squarely within what the rule contemplates. Intervention
          1) In general. “On a timely motion the court may permit anyone to intervene who:
          (b) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.”
          2) By a government officer or agency. “On a timely motion, the court may permit a federal or state governmental officer or agency to intervene if a party’s claim or defense is based on:
          a) a statute or executive order administered by the officer or agency,
          b) any regulation, order, requirement or agreement issued or made under the statute or executive order.
          I think the State AGs have a strong case here. It would be hard to say that they did not fit within the definitions of this statute.

          If the House, under Boehner could intervene to defend the DOMA legislation at the Supreme Court, and they did, I don’t see how the Court denies the standing of State AGs to do the same.

          • muselet

            I am not a lawyer and I don’t play one on TV.

            I think you’re right (he said confidently): it seems to me the state AGs have standing to intervene. However, the Supremes get the final word on that. *shudders*


          • Badgerite

            Yeah. 🙂