Recently, U.S. District Court Judge Rosemary M. Collyer ruled House Republicans could sue the Obama administration over the $136 billion to be spent on insurance subsidies. The suit, known as House vs. Burwell, claims Congress never appropriated money to be used for the cost-sharing reductions.
According to The New York Times, Speaker John Boehner has been pushing for the lawsuit “as a way to attack the new healthcare law” and to underscore the Republicans’ contention the administration has repeatedly exceeded its authority not only with regard to the healthcare law, but on a variety of issues.
“The president’s unilateral change to Obamacare was unprecedented and outside the powers granted to his office under our Constitution,” Boehner said in a statement following the ruling. “I am grateful to the court for ruling that this historic overreach can be challenged by the coequal branch of government with the sole power to change the law.”
The Justice Department is planning to appeal the ruling. “The law is clear that Congress cannot try to settle garden-variety disputes with the executive branch in the courts,” Jennifer Friedman, a White House spokesperson, told The New York Times. “This case is just another partisan attack – this one paid for by the taxpayers – and we believe the courts will ultimately dismiss it.”
Some experts don’t believe the suit has much merit. David Super, a Georgetown University law professor, told Jordan Weissmann at Slate that by passing the ACA and instructing the administration to pay the subsidies to insurers, Congress effectively appropriated the funds for the subsidies. “The Supreme Court has been very clear that you do not have to have a law that says ‘appropriations’ across the top,” he said. “You just need to have a law directing that the money be spent.”
In an unrelated ruling, a federal judge determined the Obama administration does not have the right to restrict the sale of fixed indemnity plans. In Central United Life vs. Burwell, U.S. District Court Judge Royce C. Lambert ruled the Obama administration could not force insurers to limit the sale of fixed indemnity plans to people who have already purchased ACA-compliant health insurance.
According to Courthouse News Service, the Department of Health Insurance Services (HHS) has made clear fixed indemnity plans do not meet coverage requirements under the ACA. And as of Jan. 1, insurers who were selling those plans to people who did not also have ACA-compliant insurance were facing fines of up to $100 per day.
Central Life Insurance Co. and Senior Security Benefits, Inc. filed a suit against HHS, claiming that the restrictions were “unconstitutional and arbitrary.”
In a Health Affairs blog post, Timothy Jost said although fixed indemnity policies have their place, they’re not a good substitute for “real health insurance coverage.” Jost said if the court’s decision allows insurers to market fixed indemnity plans without the restrictions proposed by HHS, consumers are likely to become disappointed. “They will first be disappointed when they become ill or injured and discover that the cheap policies they bought do not begin to cover their expenses,” he said. “They will be disappointed again when they realize that they have to pay the [ACA’s] individual responsibility tax despite the fact that they thought they had purchased insurance.”