The payments are the subject of a lawsuit brought by House Republicans over whether the health law specifically included a congressional appropriation for the money, as required under the Constitution.
Insurers are also concerned that President Trump will end subsidy payments to insurance companies that help low-income people afford health care.
The federal government has reimbursed insurance companies for these contributions, known as "cost-sharing reductions", or CSRs.
The case is now on hold at the request of both sides.
It's not the first time the president has threatened to cut off these payments to insurers, which he refers to as "BAILOUTS".
Given the administration's open distaste for the subsidies, several states have argued that the White House will not put up an adequate (if any) defense to the House legal challenge.
Not all members of Congress are on the D.C. exchange.
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The order issued by the three-judge panel, all Obama appointees, said the states had shown "a substantial risk that an injunction requiring termination of the payments at issue here. would lead directly and imminently to an increase in insurance prices, which in turn will increase the number of uninsured individuals for whom the states will have to provide health care".
The U.S. Court of Appeals for the District of Columbia granted a motion filed by the 16 state attorneys general, led by California and NY, can intervene in a convoluted legal fight dating back to 2014 on whether the federal government can block subsidy payments to insurers. The states asked the court for permission to join the case in May.
"The Administration has the opportunity to stabilize the health insurance market across our nation and ensure that our residents can continue to access affordable health care coverage", said the statement by the Health and Human Services Committee of the National Governors Association. "Such equivocation about whether the Department will continue to appeal the adverse ruling of the district court or will otherwise protect the intervenors' interests constitutes at least the requisite minimal showing that the Department's representation of the States' interest may be inadequate".
In addition to NY and California, the other states intervening in the lawsuit are Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, Washington, and the District of Columbia.
Those 90 days run out on August 21.
Insurers are now going through the process of setting individual plan rates for 2018. "[Democrats] aren't about to agree to dismantle the Affordable Care Act just because Trump makes a reckless bet". "If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments". Those who shop around may be able to find lower premiums.
Anthem Inc, one of the largest sellers of these plans in 2017, has pared back offerings or mostly exited five states including California and may exit more.
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