House Republicans' lawsuit against the Obama administration over Affordable Care Act funding scored a major win Thursday when a U.S. District Court judge ruled in favor of the plaintiffs.
The suit, House v. Burwell, argues that the ACA cost-sharing reduction program, which reimburses health insurers for subsidizing premiums, isn't legal because Congress never appropriated the funds used to pay for them. If the ruling by Judge Rosemary M. Collyer stands, it could jeopardize millions of exchange customers' subsidies, force insurers to raise premiums and possibly destabilize the ACA marketplaces.
The Obama administration, Politico notes, is expected to appeal the ruling to the District of Columbia's Court of Appeals. Collyer's ruling--which follows her decision in September allowing the suit to go forward--allows the ACA's cost-sharing reduction program to continue pending the appeals process.
In siding with the plaintiffs, Collyer writes that paying out reimbursements for ACA subsidies without appropriation violates the Constitution. "Congress is the only source for such an appropriation, and no public money can be spent without one," she says.
The Obama administration, she acknowledges, says that ending the cost-sharing reduction program could result in unreimbursed insurers suing the government and cause uncertainty in the ACA marketplaces, among other consequences.
However, "these arguments all focus on the wrong consequences," Collyer writes, adding that the relevant question is simply whether it would have been "absurd" for Congress to authorize the ACA in 2010 without permanently appropriating funds for one of its provisions. Based on what she cites as "well-understood principles of appropriations law," she argues the answer is "no."
This latest legal challenge to the ACA follows the administration's victory last summer in another challenge to subsidies, King v. Burwell.
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