The lawsuit, which will be filed in federal court in the Northern District of California contends that by not making the cost-sharing reduction payments as mandated in the Affordable Care Act, the Trump administration is not following the law.
But ending them could cause insurers to raise premiums or stop offering plans under Obamacare.
Trump's latest action raised concerns about disruption in the health insurance markets. Nationally, the subsidies represent about $7 billion a year; of that, $750 million goes to California.
In this case, the bills are to insurance companies. "They're making a fortune by getting that kind of money".
President Donald Trump defended plans to withhold federal payments on Twitter in the early morning hours Friday.
Democrats accused Trump of sabotaging the law.
The Attorney General of New York Eric Schneiderman said on Friday that a coalition of attorneys general filed a lawsuit against the Trump administration over the move to repeal Obamacare.
In California, where 1.2 million residents buy insurance through the state exchange Covered California, about 700,000 people benefit from the cost-sharing subsidies.
Massachusetts Attorney General Maura Healey says the states are seeking an immediate court injunction to make sure acting Department of Health and Human Services Secretary Eric Hargan does not stop the subsidies. Legal experts said the states were likely to face an uphill battle in court.
"This is an effort to blow up the system", added Schneiderman. He later followed through, joined by 18 other states attorneys general.. And it hurts middle class people.one of the plans I saw, your deductible is $12,000.
About 10 million people are enrolled in Obamacare through its online marketplaces, and most receive subsidies.
"We will be offering quality, affordable health insurance when open enrollment begins on November 1", Lee said. California Attorney General Xavier Becerra is leading the lawsuit. Last week, Becerra's office sued the Trump administration over its rollback of the ACA's birth control mandate that allows more employers to opt out of the mandate by claiming religious or moral objections.
"We're going to have a very good opportunity to get this done in a bipartisan way" during negotiations in December on broad federal spending legislation, "if we can't get it done sooner", Schumer told reporters.
SEE ALSO: Why Trump Does Not Give a Damn About Puerto Rico - He Thinks They Are Mexicans. "No", Mulvaney said in an interview with Politico on Friday. Among hospital shares, Tenet Healthcare (THC.N) finished 5.1 percent lower and Community Health Systems (CYH.N) declined 4.0 percent. He emphasized that it is unacceptable to force Congress to the negotiating table by threatening cuts to these subsidies. "Payments are crucial to the functioning of healthcare markets in this state and others".
On Thursday, Trump announced that the White House will no longer repay insurers for decreasing costs for customers under provisions of the ACA.
The White House announced the cut-off just hours after Trump signed an order meant to allow insurers to sell lower-cost, bare-bones policies with limited benefits and consumer protections.