ACA lawsuits: Updates in risk corridor case, House v. Burwell

Lawsuit document
Even as the Affordable Care Act is at risk for repeal, lawsuits related to the legislation are still winding their way through the courts. (Getty/eccolo74)

Two consumers will not be allowed to intervene in a case that challenges the legality of Affordable Care Act cost-sharing reductions, a federal appeals court ruled this week.

The pair—Affordable Care Act marketplace participants Gustavo Parker and La Trina Patton—filed a motion in December to intervene in the House v. Burwell case. A federal judge previously ruled in favor of the plaintiffs, House Republicans, and President Barack Obama’s administration appealed, but the case is currently on hold to allow President-elect Donald Trump’s administration time to decide how to handle it.

The ultimate outcome of the case could have profound implications for the individual health insurance market, as many carriers could flee ACA marketplaces if they no longer receive federal funds to cover consumers’ subsidies. Citing what that could do to their own coverage, that is why Patton and Parker sought a voice in the case.

But in the House’s response to Patton and Parker’s motion, it argues that they are relying on “sheer speculation” that insurers will withdraw from the exchanges if Trump’s administration allows the court to cease cost-sharing reduction payments. The U.S. Court of Appeals agreed, ruling on Thursday that the consumers “have not demonstrated that they are entitled to intervene in this case.”

In another ACA-related court case, a federal judge delivered both good and bad news to a now-defunct health insurer that sued the federal government over the shortfall in risk corridor payments. Health Republic Insurance of Oregon, which closed down in 2016, filed its suit last February, and other insurers have since initiated similar lawsuits.  

In the Health Republic case, the judge ruled on Tuesday that the insurer’s claim for unpaid risk corridor payments is indeed ripe for adjudication and that the court has subject matter jurisdiction to consider the claim. However, she said the court lacks the subject matter jurisdiction to consider the insurer’s request for either damages, declaratory or injunctive relief, or pre- and postjudgment interest.