Under the Affordable Care Act, these federal payments indirectly subsidize co-pays and premiums for some lower-income people. Without them, the cost of health plans sold through state exchanges such as Covered California could spike, as insurers spread the cost of the subsidies to their other plans.
In anticipation of a possible cancellation, Covered California has already raised premiums to cover the loss of funding in 2018.
The latest payments were set to go out this Friday. California is asking a judge to block the president’s order and force the payments to continue, while the court considers the broader lawsuit.
“We’re not saying do something that we want, we’re simply saying leave things as they are, while we litigate this against the president,” says California Attorney General Xavier Becerra. “So neither he’s getting the victory, we’re not getting the victory. We’re letting things stand as they are.”
The Trump administration is arguing it can’t continue to legally make the payments to insurers, which have remained in a murky legal situation since the 2010 health care law passed. The law specifies the payments should occur, but Congress has never appropriated the money.
U.S. Senators are discussing a possible bipartisan deal to extend payments.