WASHINGTON, Aug 1 (Reuters) - A U.S. appeals court on Tuesday allowed Democratic state attorneys general to defend subsidy payments to insurance companies that are a critical part of the Obamacare healthcare law.

The U.S. Court of Appeals for the District of Columbia Circuit granted a motion filed by the 16 attorneys general, led by California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman.

President Donald Trump has threatened to cut off the payments. (Reporting by Lawrence Hurley; Editing by Sandra Maler)