The Justice Department on Friday released Attorney General Jeff Sessions' full legal opinion giving the Trump administration the go-ahead to end federal subsidies that help pay the cost of insuring low-income individuals covered under Obamacare.
In an Oct. 11 letter to Treasury Secretary Steven Mnuchin and Health and Human Services Acting Secretary Don Wright, Sessions acknowledged that the Justice Department under the Obama administration had defended the subsidies, known as cost-sharing reductions, in a court fight that is still pending.
But Sessions wrote that he had concluded that the "best interpretation" of the Affordable Care Act was that it required a specific congressional appropriation for the payments. So far, Congress has not explicitly signed off on that spending. Absent that, the payments are unlawful, Sessions said.
"Congress's repeated choice to deny funding for [cost sharing reduction] payments is thus Congress's prerogative," Sessions wrote. "When Congress refuses to appropriate money for a program, the Executive is required to respect that decision."
House Republicans under former Speaker John Boehner had sued the Obama administration to challenge the subsidies. A federal district judge in 2016 agreed with Republicans that the payments, which were being funded through a tax-related permanent appropriation, were unlawful. However, she put her ruling on hold pending an appeal by the Obama administration.
The US Court of Appeals for the DC Circuit agreed to delay the appeal after President Donald Trump won the election, giving the new administration time to decide what it wanted to do. In the meantime, given Trump's threats to end the subsidies, a coalition of Democratic state attorneys general successfully petitioned the DC Circuit to allow them to intervene in the case and pick up the defense of the subsidies if the Trump administration dropped out.
The Justice Department has yet to officially drop its defense of the subsidies in court, and early Friday morning filed papers asking the DC Circuit to give all sides until Oct. 30 to propose what should happen next in the case. According to DOJ's filing, the Trump administration will stop the subsidies right away, which means agencies will not make payments scheduled for Oct. 18.
New York Attorney General Eric Schneiderman said in a statement late Thursday that the Democratic attorneys general are ready to challenge Trump over ending the subsidies, but it was not immediately clear what form that challenge would take. The attorneys general could try to do it in the case that's already pending, or file a new lawsuit.
A spokesperson for Schneiderman said in an email to BuzzFeed News that they were preparing to file "as soon as possible," but declined to comment on specifics.