AG Ferguson joins lawsuit defending key Obamacare provision

  • Thu May 18th, 2017 1:53pm
  • News

Bob Ferguson. FILE PHOTO

Attorney General Bob Ferguson on Thursday filed a motion to intervene in a federal lawsuit in order to defend the Affordable Care Act — and the more than 800,000 Washingtonians who depend on it for their health care.

In House v. Price, Republicans in the U.S. House of Representatives challenged a key funding provision underpinning the ACA, the federal healthcare law also known as Obamacare. In July 2016, the Obama Administration appealed a lower court decision in the case, which threatens this funding. President Trump has suggested he might abandon this appeal. Dropping the appeal will jeopardize health care exchanges across the country, including in the State of Washington.

In a motion filed Thursday in the U.S. Court of Appeals for the D.C. Circuit, Ferguson argues that Washington should be allowed to intervene in the case to protect Washingtonians’ health care. The motion, led by California and New York, was also joined by 12 other states and the District of Columbia.

“If this key funding is eliminated, tens of thousands of low-income Washingtonians could lose their health coverage entirely,” Ferguson said. “Many more would face devastating increases in the cost of care. I will defend Obamacare and stand up for Washingtonians and their need for affordable health insurance.”

“Washington state has shown that, when done right, the ACA expands health coverage to those who need it most, decreases the rate of health care cost inflation in the individual market, and creates jobs,” Gov. Jay Inslee said. “We’ve taken this fight to Congress, and we’re ready to take this to court. We must protect the reforms that are saving lives and providing a basic level of security to hard-working Washingtonians.”

Insurance Commissioner Mike Kreidler and Washington Health Benefit Exchange CEO Pam MacEwan submitted declarations in the case, providing information to the court critical to Washington’s arguments.

“A failure by the federal government to make payments threatens the stability of the health insurance market in Washington,” Kreidler said. “Insurers are still on the hook for these costs. If they stay in the market, they’ll pass those costs on to consumers through higher premiums.”

The ACA relies on two types of subsidies: premium subsidies, paid to people with an income less than four times the poverty level, and cost-sharing reduction subsidies (CSRs), paid directly to participating insurers to reduce the out-of-pocket costs for people with an income below 250 percent of the poverty level.

Both subsidies are critical to successful insurance exchanges. The House Republicans’ lawsuit — previously known as House v. Burwell — threatens funding for the CSRs.

Nearly 70,000 Washingtonians receive CSRs. If the federal government fails in its obligation to pay insurers for these CSRs, Ferguson argues, those Washingtonians could face dramatic premium increases that threaten their ability to obtain health care.

All of the 204,000 Washington enrollees in ACA plans could face premium increases of up to 20 percent — not just those directly receiving CSRs.

The ACA also enabled an additional 600,000 Washingtonians to gain insurance through an expansion of Medicaid eligibility, meaning 800,000 people in Washington obtained coverage through Obamacare.

The Obama Administration presented arguments in its appeal in October 2016. The appeals court stayed the proceedings after the election, with a status report to be filed by the Trump Administration and the House Republicans on May 22. If the court grants Ferguson’s request, Washington would be authorized to defend the ACA in the appeal, either in place of or alongside the Trump Administration.

Assistant Attorneys General Jeff Sprung, Marta DeLeon and Eric Nelson are handling the case for Washington.