Judge dismisses 18 states' lawsuit over Trump's cost-sharing reduction cuts

A federal judge dismissed a lawsuit brought by 18 states and the District of Columbia over the Trump administration's move to halt cost-sharing reduction payments to health insurers participating on the ACA marketplace, according to Health Affairs.

The states sued HHS after the agency said in October 2017 that it would stop funding cost-sharing reduction payments. The payments helped insurers subsidize the cost of coverage for low-income Americans. HHS made the move after winning a lawsuit in 2016 that argued HHS did not have explicit congressional appropriation to fund CSRs.

Judge Vince Chhabria of the federal District Court for the Northern District of California issued an order July 18 dismissing the states' lawsuit. Two days before the order, the states requested the judge stay the litigation or dismiss the case. The states preferred to stay the proceedings, expressing concern the Trump administration will prohibit "silver loading," or the practice of health insurers applying full premium hikes attributable to CSR payment cuts to silver marketplace plans.

Silver loading unintentionally lowered premiums for bronze and gold plans for some consumers when the CSR payment cuts took place. The insurers asked for a stay or dismissal to avoid disturbing the "new 'status quo' that has resulted from silver loading, a practice which had 'mostly curbed' the harm that could have otherwise resulted from the Trump administration's decision to halt CSR payments," according to Health Affairs reporter Katie Keith's reading of the order.

The states can refile their lawsuit if they choose to, as the judge dismissed the lawsuit without prejudice.

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