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Fifteen states ask to intervene in CSR payment appeal over cost-sharing reduction payments

Status update on court case over cost-sharing reduction payments to insurers was Monday, May 22.

Susan Morse, Senior Editor

Fifteen states and the District of Columbia have filed to intervene in a federal appeals case to keep cost-sharing reduction payments to insurers.

The federal funds allow insurers to reduce deductibles and out-of-pocket costs to lower-income consumers on the exchanges. Without them, insurers have said they will need to increase premiums  dramatically. Some have said they need a CSR guarantee to keep  them in a marketplace that numerous payers have exited.

The states that filed to intervene are California, New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont and Washington, and the District of Columbia.

[Also: Nation's insurance commissioners tell Congress to support CSR payments]

Insurers Molina Healthcare and EmblemHealth filed statements of support to the court.

Molina said it had received $85 million in CSR payments so far in 2017 and expected it would spend another $255 million this year to help consumers.

CSRs represent about 15 percent of total claims cost, Molina's vice president of Marketplaces Janet Fosdeck said. Without the payments, Molina would have to reconsider whether to operate on the exchanges in 2018, she said.

Insurers are facing a June deadline to file their 2018 rates with the federal government.

[Also: Trump restores cost-sharing reduction payments for now after massive outcry over market destabilization]

The states and D.C. made their request Wednesday, days before the House was scheduled to file a status update in the case on Monday. The House and President Trump asked for another 90-day delay in the case.

"The states have a vital interest in this litigation," said California's Attorney General Xavier Becerra. "If the district court's injunction goes into effect, it would critically undermine the proper implementation of the ACA--just as the House, and now the President, intend. Immediate loss of CSR funding, with any future funding subject to the myriad uncertainties of the appropriations process, would harm millions of state residents and the states themselves. Those harms amply justify intervention."

CSR payments were included in the Affordable Care Act as a way to stabilize the market for insurers that were mandated to cover high-risk individuals.

[Also: Federal government faces $2.3 billion cost increase in 2018 if cost-sharing reduction payments are eliminated]

The Republican American Health Care Act also mandates insurers cover consumers with pre-existing conditions, though the bill allows them to set higher premium prices for those individuals and gives states the option to waive the pre-existing condition coverage.

In the 2014 lawsuit against CSRs brought and won by House Republican leaders, the GOP objected to the fact that the funding in the ACA had never been approved by Congress.

President Obama appealed.

When Donald Trump became president, the case was left on hold as Republicans hammered out a replacement plan to the ACA. Trump has held CSRs over the heads of Democrats as leverage for passage of the Republican American Health Care Act.

The CSR payments flow at the pleasure of the president, who says he will continue them for now.

"Meanwhile, the President has increasingly made clear that he views decisions about providing access to health insurance for millions of Americans--including the decision whether to continue defending this appeal--as little more than political bargaining chips," Becerra said. "The States and their residents cannot continue to rely on the Executive Branch to represent them in this appeal."

Twitter: @SusanJMorse

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