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State attorney general wants to defend Obamacare cost-sharing subsidies

File: Then-Rep. Xavier Becerra (D-CA) listens during a news conference to discuss the rhetoric of presidential candidate Donald Trump, at the U.S. Capitol, May 11, 2016, in Washington, D.C.
Drew Angerer/Getty Images
State attorney general Xavier Becerra filed a motion to intervene in a federal lawsuit to defend Obamacare's cost-sharing subsidies.

California Atty. General Xavier Becerra on Thursday  took legal action to protect a provision of the Affordable Care Act that lowers the cost of health insurance for millions of people.

Becerra and New York attorney general Eric Schneiderman filed a motion to intervene in a federal lawsuit, House of Representatives v. Price, to defend the cost-sharing subsidies that reduce deductibles, copayments and out-of-pocket costs for lower-income people. Thirteen states and the District of Columbia joined the effort.

Becerra pledged to fight for the subsidies, as he addressed patients, providers and the media at St. John’s Well Child and Family Center in South Los Angeles.

"We're going to do everything we can to make sure that regardless of what the administration in Washington D.C. does, and regardless of what members in Congress try to do to the Affordable Care Act, we're going to stand up for our health care," Becerra said.

The U.S. Department of Health and Human Services directly pays insurers for these subsidies. And that's the sticking point: The Republican-led House of Representatives say these payments are unconstitutional, because Congress never approved a specific appropriation for them.

The GOP-led House filed the suit against the Obama Administration in 2014 to block the subsidies. A judge sided with the House in 2016, but left the subsidies in place while Obama appealed the decision.

The Trump Administration has not indicated whether it will continue the appeal or drop the case, which would in effect end the subsidies.

That uncertainty is making insurers skittish, as they decide whether to stay in state health insurance exchanges for 2018. Experts predict insurers would most likely increase premiums if Washington stops providing the subsidies, which amount to $7 billion a year nationwide.

"If President Trump decides he wants to abandon the defense of the Affordable Care Act, we're ready to pick up his fumble and do it for him," Becerra said. "It's hard to have predictability if you've got this lawsuit hanging over the heads of everybody."

Under Obamacare, people qualify for cost-sharing subsidies if they earn below 250 percent of the federal poverty level. That's $29,700 for an individual and $60,750 for a family of four.

According to a Kaiser Family Foundation analysis, 980,000 Covered California enrollees receive this assistance.