A small insurer in Montana is the first to win a court case against the federal government over unpaid cost-sharing reduction payments for the last quarter of 2017. The legal victory is good news for other insurers that have also filed lawsuits to recover the unpaid payments, which total approximately $7 billion.

A U.S. Federal Claims Court ruled Tuesday that a small Montana insurer is entitled to $5.3 million in unpaid cost-sharing reduction (CSR) payments for the last quarter of 2017.

Judge Elaine D. Kaplan granted Montana Health Co-Op’s request for summary judgment and denied the Department of Justice’s (DOJ) motion to dismiss the case. The DOJ argued the Department of Health and Human Services was not obligated to make the payments because Congress didn’t appropriate the necessary funding.

But Kaplan said that the payment obligation is spelled out in plain language of the Affordable Care Act and the government’s failure to make the payments is in violation of Section 1402 of the health care reform law.

The subsidies were meant to help low-income Americans pay for health insurance coverage, but the Trump administration stopped payments in October, one of several actions made to destabilize the health insurance exchange market.

Several other insurers have filed lawsuits against the federal government over unpaid cost-sharing reduction payments, which total approximately $7 billion, but Montana Health Co-Op is the first to score a legal victory.

The decision will likely “reverberate throughout the health insurance industry,” said Crowell & Moring, the law firm which represented Montana Health Co-Op.

Kevin Mowll, executive director of the RISE Association, agrees, noting that if this case forces the federal government to make good on its $7 billion debt to the industry, it will begin to help heal the financial hurts imposed on the industry by those who want to kill the Affordable Care Act.

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