Ex­perts di­vided on threat from latest ACA le­gal chal­lenge

Modern Healthcare - - NEWS - By Lisa Schencker

House Repub­li­cans and the Obama ad­min­is­tra­tion are now sure to spend the com­ing months locked in yet another le­gal bat­tle over the Af­ford­able Care Act.

In a move that sur­prised some le­gal ex­perts, U.S. Dis­trict Judge Rose­mary Col­lyer in Washington, D.C., de­cided last week that House Repub­li­cans have stand­ing to sue over their al­le­ga­tion that the ad­min­is­tra­tion is il­le­gally spend­ing money that Congress never ap­pro­pri­ated for the law’s cost-shar­ing pro­vi­sions. Those pro­vi­sions in­clude re­duced de­ductibles, co­pays and coin­sur­ance for many ben­e­fi­cia­ries based on in­come.

The boost granted to this latest le­gal at­tack on the ACA means more un­cer­tainty for the healthcare in­dus­try just months af­ter the U.S. Supreme Court re­solved King v. Bur­well, a case many feared would throw the in­sur­ance mar­ket into dis­ar­ray if the White House lost (the court ruled 6-3 in its fa­vor). But ex­perts dis­agree on the grav­ity of the threat from the House law­suit. Some be­lieve a rul­ing against the ad­min­is­tra­tion could sim­i­larly un­der­mine in­sur­ance mar­kets, but oth­ers say the pos­si­ble im­pact is less sig­nif­i­cant.

“What you have is a fight over ap­pro­pri­a­tions that could throw sand into the gears of the ACA,” said Ni­cholas Ba­gley, an as­sis­tant law pro­fes­sor at the Univer­sity of Michigan. “Un­like King, this isn’t a case that threat­ens the ACA go­ing for­ward.”

To get this far, the House had to prove it was in­jured by the ad­min­is­tra­tion’s ac­tions. Col­lyer, nom­i­nated by Pres­i­dent Ge­orge W. Bush, con­cluded that the House had in­deed been in­jured if its al­le­ga­tion re­gard­ing ap­pro­pri­a­tions was true. The House can­not ful­fill its con­sti­tu­tional role, she wrote, if it re­fuses to fund some­thing and then the pres­i­dent funds it any­way.

The Obama ad­min­is­tra­tion said the fight is es­sen­tially a po­lit­i­cal one and ar­gued in court doc­u­ments that a “gen­er­al­ized griev­ance—a plain­tiff’s mere in­ter­est in vin­di­cat­ing its views re­gard­ing the proper im­ple­men­ta­tion of the law—can­not suf­fice” as an in­jury.

The U.S. Jus­tice Depart­ment has pledged to ap­peal the de­ci­sion. Many ex­perts have spec­u­lated that the ad­min­is­tra­tion will seek what’s called an in­ter­locu­tory ap­peal, which would al­low a higher court to con­sider the stand­ing is­sue be­fore the lower court de­cides the case. Both Col­lyer and the ap­peals court would have to ap­prove such a re­quest.

About 56% of Amer­i­cans who re­ceive cov­er­age through the ACA’s in­sur­ance ex­changes—ap­prox­i­mately 5.6 mil­lion peo­ple— get cost-shar­ing as­sis­tance, ac­cord­ing to the CMS.

Michael Cannon of the lib­er­tar­ian Cato In­sti­tute said the loss of cost­shar­ing re­duc­tions would cause ex­change premi­ums to rise be­cause healthy peo­ple would drop out.

Tim Jost, a law pro­fes­sor at Washington and Lee Univer­sity who sup­ports the ACA, said the law­suit could have sig­nif­i­cant con­se­quences. Or Congress just might have to ap­pro­pri­ate money for the re­duc­tions, he said.

Ba­gley said in­sur­ers may have to go to the U.S. Court of Fed­eral Claims if Congress still re­fuses to ap­pro­pri­ate the money. But the ques­tion, he said, isn’t whether the fed­eral gov­ern­ment will pay for cost-shar­ing re­duc­tions, but when and how.

Some le­gal ex­perts say it’s dif­fi­cult to pre­dict how the case will un­fold be­cause most sim­i­lar ques­tions haven’t made it past the hur­dle of es­tab­lish­ing le­gal stand­ing. “There are also in­ter­est­ing po­lit­i­cal con­sid­er­a­tions given that the Supreme Court has heard two chal­lenges to Oba­macare,” said Ker­mit Roo­sevelt, a Univer­sity of Penn­syl­va­nia con­sti­tu­tional law ex­pert. “I won­der how much ap­petite (the just-sices) have for more of them.”

Some le­gal ex­perts say it’s dif­fi­cult to pre­dict how the case will un­fold be­cause most sim­i­lar ques­tions haven’t made it past the hur­dle of es­tab­lish­ing stand­ing.

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