Democratic AGs sue Trump over ObamaCare subsidy cutoff

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Can the president get away with stopping ObamaCare payments?

Legal expert Jonathan Turley provides analysis on 'Special Report.'

Democratic attorneys general from 18 states and the District of Columbia sued the Trump administration Friday after the White House announced it would end payments to health insurers under ObamaCare.

The lawsuit was filed in federal court in California. The states involved are California, Connecticut, Delaware, Kentucky, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington. They claim that Trump's decision to halt the payments constitute an attempt by the president "to gut the health and well-being of our country."

The states are asking the court to force the Trump administration to make the next payment to insurers, scheduled for Oct. 18. In a separate court case, the Justice Department notified a federal appeals in court in Washington Friday that payment "would not occur."

A federal judge has found that Congress never properly approved the payments. The subsidies have continued under Obama and Trump until now, despite prior Trump threats to block them.

Meanwhile, congressional Democrats vowed to press for a bipartisan deal to restore the money by year's end. Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi blasted Trump's move to end the payments as "a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America."

The decision is one of the most significant steps in Trump's bid to ultimately "repeal and replace" ObamaCare, and was expected to rattle already-unsteady insurance marketplaces.

The money goes to companies for lowering out-of-pocket costs like co-payments and deductibles for low- and middle-income customers. It will cost about $7 billion this year.

"Congress, they forgot what their pledges were," Trump told conservative activists at the Values Voter Summit, recalling GOP candidates' repeated vows to repeal Obama's law. "So we're going a little different route. But you know what? In the end, it's going to be just as effective, and maybe it will even be better."

He later reiterated his belief that his move would pressure Democrats to bargain over major changes in the law and said, "There's going to be time to negotiate health care that's going to be good for everybody."

Schumer told reporters that Trump's "threats and bullying are not going to work." He said he saw a good chance of forcing money for the cost sharing reductions into a massive spending bill Congress is expected to approve late this year.

Democrats think Trump would have little clout to block a bipartisan deal, citing support for the payments by some Republicans and polls showing the public would fault the GOP for any failure. Some Republicans privately agree.

"Now, President Trump has his fingerprints all over the knife," said Maryland Sen. Chris Van Hollen, who heads Senate Democrats' campaign committee.

Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., have been seeking a deal that Alexander said in a recent interview would reinstate the payments for two years. He said in exchange, Republicans want "meaningful flexibility for states" to offer lower-cost insurance policies with less coverage than Obama's law mandates.

Republicans are divided over that effort.

Rep. Mark Meadows, R-N.C., who leads the conservative House Freedom Caucus, said in an interview that he's willing to back the payments if they're "part of a transition from Obamacare to something else" with greater state flexibility than Alexander and Murray are discussing. Another conservative leader, Rep. Mark Walker, R-N.C., said the payments should be revived "under no circumstance."

Some GOP leaders have expressed openness to continuing the payments, including Senate Majority Leader Mitch McConnell, R-Ky., who's said he wants them accompanied by significant changes. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said this summer that the payments should be continued, citing their impact on premiums.

Moderates like Sen. Susan Collins, R-Maine, said Friday that halting the payments would make insurance costs "unaffordable for some people." Rep. Ileana Ros-Lehtinen, R-Fla., tweeted that the cuts "will mean more uninsured in my district."

The Associated Press contributed to this report.