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SAN FRANCISCO/WASHINGTON, May 18 (Reuters) - More than a dozen Democratic attorneys general will seek to intervene to defend a key part of the Obamacare healthcare law -- subsidy payments to insurance companies -- which is under threat in a court case, sources familiar with the litigation said.
The attorneys general, led by California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman, are expected to file a motion to intervene in the case pending in the U.S. Court of Appeals for the District of Columbia Circuit later on Thursday.
The case, which dates back to the Obama administration, was filed by the Republican-led House of Representatives against the federal government in an effort to cut off subsidy payments to insurers for the individual plans created by the Affordable Care Act, often called Obamacare.
The subsidies payments help cover out-of-pocket medical expenses for low-income Americans.
Democratic attorneys general have emerged as a key group resisting President Donald Trump's agenda, particularly around immigration. Their intervention in the Obamacare subsidies lawsuit represents a major expansion of that effort.
Trump has repeatedly threatened to withhold the payments to insurers, which amount to about $7 billion this year, and referred to them as a "bailout."
The attorneys general are expected to cite Trump's own words vowing to let Obamacare "explode" as part of the reasoning for their intervention.
Several insurers, including Aetna and Humana , have largely left the Obamacare exchanges, citing a pool of patients who are sicker than expected and therefore more expensive. Insurers have also repeatedly called on the Trump administration to fund the cost-sharing subsidies.
Attorneys general and proponents of Obamacare have said the threats to withhold the payments have already wreaked havoc in the marketplaces and are part of the reason some healthcare consumers have seen double-digit rate increases.
Several offices of Democratic attorneys general who are believed to want to intervene in the case declined to comment when contacted by Reuters.
Democratic attorneys general took a lead role to successfully block Trump's executive orders restricting travel from some Muslim-majority countries, and they are also resisting efforts to roll back environmental regulations.
In May 2016, a U.S. judge ruled in favor of the Republicans in the subsidies case, finding that the Obama administration could not spend the money without the approval of Congress. The Obama administration appealed before Trump took office, leaving the new administration to ponder how to proceed.
The appeals court put the litigation on hold after the November presidential election at the request of the Republican House lawmakers.
The litigation could become moot if Congress repeals Obamacare. The House passed its own healthcare bill, called the American Health Care Act, earlier this month, which would repeal much of Obamacare. The Senate recently began writing its own version of the bill but has warned it could take months to pass.
The Trump administration has taken action over the past several months to undercut Obamacare through regulatory authority. It backed off enforcing the individual mandate, which requires everyone to purchase health insurance or else pay a penalty, tightened enrollment in Obamacare markets and has enabled people to sign up for insurance plans outside of healthcare.gov, the flagship site of Obamacare that the Obama administration heavily advertised. (Editing by Alistair Bell)