New York, other states sue to halt Trump from scrapping Obamacare subsidies

Mary Altaffer  AP

New York Attorney General Eric Schneiderman says he is joining peers in California and several other states in filing a lawsuit to protect the subsidies. The Essential Plan covers residents whose income is just above the eligibility level for Medicaid; the federal funding, which went to NY rather than the insurance companies, was based on what the value of their cost-sharing reductions would be.

New York Attorney General Eric Schneiderman described the decision, announced late October 12 by the White House, as "Cruel", "breathtakingly reckless" and "unlawful", CNBC reported.

America's Health Insurance Plans and the Blue Cross Blue Shield Association said in a joint statement Friday that the money goes to doctors, hospitals, pharmacies, and other service providers to lower co-pays and deductibles for 6 million consumers.

Meanwhile, in California, Attorney General Xavier Becerra said he similarly expected to file a suit to have the payments continue.

"The industry has been urging Congress to clear up the legal dispute and formally direct the executive branch to make the monthly payments".

"Now, if the Democrats were smart, what they'd do is come and negotiate something where people could really get the kind of health care that they deserve, being citizens of our great country", Trump told reporters gathered on the South Lawn of the White House. "And if the federal government were to move forward with the proposal to facilitate the unrestricted purchase of insurance across state lines, it would create a race to the bottom on consumer protections for New Yorkers".

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"In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments".

If the subsidies vanish, low-income Americans who obtain insurance through Obamacare online marketplaces where insurers can sell policies would face higher insurance premiums and out-of-pocket medical costs.

Schneiderman accused Trump of making his decision to cut the ACA subsidies based on politics and his animus toward former President Barack Obama, for whom the federal law is called Obamacare, rather than on an understanding of the impact of those cuts.

U.S. President Donald Trump smiles after signing an Executive Order to make it easier for Americans to buy bare-bone health insurance plans and circumvent Obamacare rules at the White House in Washington, U.S., October 12, 2017. The insurers said they will fight to keep the subsidies. One of them, Susan Collins, a moderate Republican from ME who had been contemplating running for governor next year, on Friday said she planned to remain in the Senate and would use her voice in reforming the healthcare system.

The White House announced the cut-off just hours after Trump signed an order meant to allow insurers to sell lower-cost, bare-bones policies with limited benefits and consumer protections. The president took to Twitter early Friday morning to claim that Obamacare is a "broken mess", and that he would move toward replacing the law "piece by piece".

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