Ar­gu­ments in House law­suit may pose next threat to ACA

Modern Healthcare - - NEWS - By Lisa Schencker

If House Repub­li­cans win legal stand­ing in their law­suit chal­leng­ing the Af­ford­able Care Act’s cost-shar­ing sub­si­dies, their case could pose an­other se­ri­ous threat to the law’s cov­er­age ex­pan­sion.

U.S. Dis­trict Judge Rose­mary Col­lyer in Wash­ing­ton cur­rently is de­cid­ing whether to al­low the law­suit to pro­ceed or dis­miss it be­cause the plain­tiffs have not suf­fered an ac­tual harm, and there­fore don’t have the right to sue. Col­lyer’s ques­tions dur­ing re­cent oral ar­gu­ments, along with her sub­se­quent in­for­ma­tion re­quests, have led some ob­servers to spec­u­late that she will let the plain­tiffs ar­gue their case on its mer­its.

If she does, and her rul­ing on stand­ing is up­held by the ap­pel­late court, some ex­perts say the plain­tiffs’ sub­stan­tive ar­gu­ments have a chance of suc­cess. The case comes as the U.S. Supreme Court is set to rule on the sep­a­rate is­sue of pre­mium sub­si­dies in King v. Bur­well.

House Repub­li­cans ar­gue that the Obama ad­min­is­tra­tion is il­le­gally spend­ing money that Congress never ap­pro­pri­ated for the law’s cost-shar­ing pro­vi­sions, which man­date re­duced de­ductibles, co-pays and coin­sur­ance for ex­change plan mem­bers in sil­ver-tier plans with in­comes up to 250% of the poverty level. The plain­tiffs say the gov­ern­ment is pro­jected to pay in­sur­ers $175 bil­lion over 10 years to pro­tect con­sumers from cost-shar­ing.

“Once you get past stand­ing, I think it’s pretty clear th­ese cost-shar­ing sub­si­dies have not yet been ap­pro­pri­ated,” said An­drew Kloster, a legal fel­low with the con­ser­va­tive Her­itage Foun­da­tion.

Ker­mit Roo­sevelt, a Uni­ver­sity of Penn­syl­va­nia con­sti­tu­tional law ex­pert, said an ar­gu­ment that an ad­min­is­tra­tion has spent money that was not ap­pro­pri­ated by Congress is some­times “a good ar­gu­ment be­cause Congress is sup­posed to con­trol how money is spent, so the abil­ity of the presi- dent to spend money against the ex­pressed will of Congress is limited.” But such lim­i­ta­tions are clear­est when Congress specif­i­cally pro­hibits spend­ing for cer­tain pur­poses, he added. That is not the case here.

James Blum­stein, a law pro­fes­sor at Van­der­bilt Uni­ver­sity, said the stand­ing is­sue is tougher than the sub­stan­tive is­sue in the case. “If we as­sume for the sake of dis­cus­sion that Congress ap­pro­pri­ated money for one thing and it was spent on an­other thing, I think the House po­si­tion be­comes pretty strong once stand­ing is sat­is­fied,” he said.

The ad­min­is­tra­tion notes that the ACA di­rects in­sur­ers to re­duce cost­shar­ing for cer­tain in­di­vid­u­als, and that in­sur­ers have “a legal right to pay­ment for the amount of th­ese cost-shar­ing re­duc­tions.” The law goes on to say that the HHS sec­re­tary “shall make pe­ri­odic and timely pay­ments to the (in­surer) equal to the value of the re­duc­tions.”

Tim Jost, a law pro­fes­sor at Wash­ing­ton and Lee Uni­ver­sity who sup­ports the ACA, said he be­lieves the gov­ern­ment is cor­rect in ar­gu­ing that the spend­ing for the cost-shar­ing re­duc­tions is cov­ered by a per­ma­nent ap­pro­pri­a­tion. Be­yond that, if the courts strike down the fund­ing, he said, it would dam­age the in­di­vid­ual in­sur­ance mar­ket be­cause in­sur­ers still would be re­quired to re­duce cost­shar­ing but they would not be paid for it, forc­ing them to hike pre­mi­ums.

To get to the mer­its, Col­lyer, who was nomi- nated by Pres­i­dent Ge­orge W. Bush, has to find that the ad­min­is­tra­tion’s ac­tions caused in­jury to the House. The plain­tiffs claim they were in­jured be­cause the ad­min­is­tra­tion’s ac­tions usurped the House’s pow­ers. The gov­ern­ment coun­ters that “an ab­stract di­lu­tion of in­sti­tu­tional leg­isla­tive power” does not con­sti­tute an in­jury, and that courts should steer clear of po­lit­i­cal dis­putes.

Dur­ing oral ar­gu­ments last month, the judge seemed skep­ti­cal of the ad­min­is­tra­tion’s claims that the House hadn’t suf­fered any in­jury from its ac­tions. Af­ter the ar­gu­ments, she also asked to re­ceive by June 15 doc­u­ments re­lated to fund­ing de­ci­sions. All that led some to spec­u­late that Col­lyer may grant the House stand­ing and hear the case. Jost said it’s “trou­bling” that Col­lyer seems to be ex­am­in­ing the mer­its of the case be­fore the stand­ing is­sue is re­solved.

But Ankur Goel, a health part­ner with McDer­mott Will & Emery, said Col­lyer’s ques­tions might speak to stand­ing. If the dis­agree­ment is over the ad­min­is­tra­tion’s in­ter­pre­ta­tion of the law, then the plain­tiffs might not have stand­ing. But if it’s over whether Congress ap­pro­pri­ated the money or not, then they might have the right to pro­ceed to the mer­its of the case.

“She’s a thor­ough and dili­gent judge,” said Goel, who co-au­thored an ami­cus brief sup­port­ing the ad­min­is­tra­tion in King v. Bur­well. “It’s not un­usual for her to ask the gov­ern­ment to ex­plain it­self. I wouldn’t put too much stock in that re­quest (for doc­u­ments) as to what the out­come is go­ing to be.”

Ankur Emery, Goel, said a Judge health Col­lyer’s part­ner ques­tions at McDer­mott might Will speak& to stand­ing. If the dis­agree­ment is over the ad­min­is­tra­tion’s in­ter­pre­ta­tion of the law, then the plain­tiffs might not have stand­ing. But if it’s over whether Congress ap­pro­pri­ated the money or not, then they might have the right to pro­ceed to the mer­its of the case.

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