Judge Sides With House Republicans, Gutting Key Obamacare Provision

By Jack Bouboushian

House Republicans struck a blow to Obamacare on Thursday, winning a court order effectively defunding a key section of the Affordable Care Act.

In 2014, House Republicans sued the Obama administration, claiming that the Affordable Care Act violates the Constitution’s separation of powers.

“Defendants’ expenditure of taxpayer funds, absent a congressional appropriation, plainly is unconstitutional as it violates Article I of the Constitution,” the complaint states.

U.S. District Judge Rosemary Collyer granted the House standing to sue last year, over the administration’s objection that the lawsuit was a political ploy.

On Thursday, she handed a major victory to House Republicans, ruling that a key part of the Act lacks funding authorization from Congress.

“This case involves two sections of the Affordable Care Act: 1401 and 1402,” the opinion states. “Section 1401 provides tax credits to make insurance premiums more affordable, while Section 1402 reduces deductibles, co-pays, and other means of ‘cost sharing’ by insurers. Section 1401 was funded by adding it to a preexisting list of permanently-appropriated tax credits and refunds. Section 1402 was not added to that list. The question is whether Section 1402 can nonetheless be funded through the same, permanent appropriation. It cannot.”

In other words, the Affordable Care Act unambiguously appropriates money to pay for tax credits, but for not reimbursements to insurers, even though the law states that insurers shall get their money back for offering reduced rates for co-pays and deductibles.

“Such an appropriation cannot be inferred. None of Secretaries’ extra-textual arguments – whether based on economics, ‘unintended’ results, or legislative history – is persuasive,” Collyer said.

The administration argued that funding only Section 1401 and not 1402 would be an absurd reading of the statute, but the judge disagreed.

“The only result of the ACA is that Section 1402 reimbursements must be funded annually. Far from absurd, that is a perfectly valid means of appropriation,” the judge said.

“Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution.”

Collyer said funding under Section 1402 may continue pending the administration’s expected appeal to the D.C. Circuit.

In fiscal year 2014, the administration sequestered $286 million to cover Section 1402 cost-sharing expenses.

If the ruling stands, it would be a major setback of millions of low-income Americans who benefit from the cost-sharing subsidies that help them pay for out-of-pocket costs.

“Today’s ruling by the D.C. Federal Court is an important step toward restoring the separation of powers and stopping President Obama’s power grab. The Constitution is very clear: it is Congress’ job to write our laws and it is the President’s duty to enforce them,” House Judiciary Committee Chairman Bob Goodlatte, R-Va., said in a statement.

But Collyer’s ruling disappointed and angered congressional Democrats, who vowed to appeal.

Elizabeth Wydra, president of the Constitutional Accountability Center, which represents House Democratic Leader Nancy Pelosi and several of her colleagues, said the judge’s ruling is “unprecedented” in that it allowed “a partisan faction of Congress to use the courts to settle a political dispute over the interpretation of a statute.”

We are confident that the court will find that the administration acted within its lawful authority in reimbursing health insurers for cost sharing reductions,” Wydra said.