States’ attorneys general are lining up to sue the federal government to continue making cost sharing reduction payments to insurers, which President Trump Thursday evening indicated that he would be suspending.

New York Attorney General Eric Schneiderman announced Friday afternoon that his office intended to file a suit requiring that the federal government continue to make payments.

“This is a reckless and cruel decision,” Schneiderman said of Trump’s decision. “Payments are crucial to the functioning of healthcare markets in this state and others.”

New York attorney general Eric Schneiderman
New York attorney general Eric Schneiderman

Meanwhile, in California, Attorney General Xavier Becerra said he similarly expected to file a suit to have the payments continue.

The lawsuit will argue that Trump is violating the Administrative Procedure Act by not making the payments and refusing to faithfully execute federal law, among other arguments.

Schneiderman said he expected other states to join in the suits. In May, he and Becerra led a coalition of 18 Attorneys General and moved to intervene in House v. Price to protect millions of Americans' access to affordable health care. The DC Circuit granted their intervention in August.

Also See: Trump unleases Obamacare chaos as he halts insurer subsidy

"This summer, the courts granted our intervention to defend these vital subsidies and the quality, affordable health care they ensure for millions of families across the country. Our coalition of states stands ready to sue if President Trump cuts them off," Schneiderman added.

Schneiderman said Trump based his decision on guidance from the Departments of Justice and Health and Human Services that there were no direct provisions in law calling for the cost reduction payments. He says his office’s suit will contend that the Affordable Care Act is a law, and that the cost sharing reduction payments are integral to maintaining the law.

“The subsidies are required by the ACA, and (the president) can’t simply refuse to pay them,” Schneiderman said. “We will fight this with everything we’ve got.”

Other suits could be filed by health insurance companies, which are likely to contend that the payments can’t be immediately suspended. Those suits could be filed in the Court of Federal Claims, which handles cases in which litigants believe they have not been paid by the federal government.

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