Judge Dismisses California's Lawsuit Over Halted Cost-Sharing Payments

The plaintiffs had sought to keep their legal options open in case the White House moves to ban 'silver-loading.'

A federal judge in California tossed out a lawsuit Wednesday that had challenged the Trump administration's decision last fall to cut off cost-sharing reduction (CSR) payments to health insurers.

The 18 plaintiff states, led by California, had asked earlier this week that the litigation be put on hold rather than dismissed, so they could quickly raise objections to future actions by the government. But the judge decided to close the case instead.

"In the event a new lawsuit involving the same or similar issues is filed in this district, any party to the new lawsuit may file an administrative motion to consider whether the newly-filed lawsuit is related to the above-captioned one," Judge Vince Chhabria in the U.S. District Court for the Northern District of California wrote in his brief order.

The plaintiffs had expressed particular concern that the administration could move to prohibit a pricing tactic known as "silver-loading" on the Affordable Care Act exchanges. The practice had staved off instability in the individual market, at least temporarily, the plaintiffs acknowledged.

They asked the judge for a stay this week rather than submitting a motion for summary judgment, which was due this Friday.

Critics of the Trump administration have cited the halted CSR payments in a long list of actions allegedly designed to weaken the ACA's influence over U.S. healthcare, and the plaintiffs in this case continue to hold that stopping the payments violated the law.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.