Montana health insurer wins lawsuit over cost-sharing reduction payments

A federal judge ruled Sept. 4 that health insurers are entitled to unpaid cost-sharing reduction payments, which help insurers subsidize the cost of coverage for low-income Americans, according to a Health Affairs blog post.

In a 10-page ruling, Judge Elaine D. Kaplan of the Court of Federal Claims sided with Montana Health CO-OP in a lawsuit the health insurer filed against the Justice Department. The health insurer argued the government's failure to make cost-sharing reduction payments violates the ACA and an implied-in-fact contract between the health insurers and HHS.

The Trump administration's move to end the cost-sharing reduction payments was in part a result of 2014 litigation brought by the House. Earlier this year, a district court judge ruled the cost-sharing reduction payments violated federal law, as there was no explicit appropriation for the funds from Congress.

However, Ms. Kaplan's ruling said health insurers are entitled to the payments, even if there is not explicit appropriation. She said "the statutory language clearly and unambiguously imposes an obligation on the Secretary of HHS to make payments to health insurers that have implemented cost-sharing reductions on their covered plans as required by the ACA."

Ms. Kaplan denied the Justice Department's request to dismiss the case and granted Montana Health CO-OP's request for summary judgment.

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