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House's Obamacare Suit Paused Until New Year, Health Care Daily Report (BNA)

BNA's Health Care Daily Report


December 06, 2016

Health System Reform

House's Obamacare Suit Paused Until New Year


BNA Snapshot
Administration sought reversal of decision holding cost-sharing payments unlawful
Insurers could lose billions in subsidies for required cost-sharing reductions

By Mary Anne Pazanowski


Dec. 5 The administration's appeal of a decision that held Obamacare payments to insurers
unlawful won't be decided before President-elect Donald Trump takes office in January ( U.S.
House of Representatives v. Burwell , D.C. Cir., No. 16-5202, 12/5/16).
The U.S. Court of Appeals for the District of Columbia Circuit Dec. 5 granted the House of
Representatives motion to pause the case until February. House Republicans Nov. 21 asked
the court to halt the suit, saying the Trump administration could decide not to continue the
appeal or to change tactics (226 HCDR, 11/23/16).
The decision is a wise move by the court, law professor Josh Blackman told Bloomberg BNA. Blackman is an associate
professor at South Texas College of Law in Houston and an adjunct scholar at the libertarian Cato Institute in Washington
who has written about this lawsuit.
The new administration will have a different take on the issues in the case, and it makes a lot of sense for the court to wait to
hear the Trump administration's views, Blackman said.
Insurers likely are very apprehensive now, Blackman said. The court's action leaves insurers in limbo regarding
reimbursements for the cost-sharing reductions the Affordable Care Act required them to implement to make plans more
affordable.
Congress still could appropriate the money to pay them for 2017, or it could leave insurers holding the bag, Timothy S. Jost, a
health-policy expert and emeritus professor at Washington & Lee Law School in Lexington, Va., told Bloomberg BNA.
It also isn't yet clear what form Trump's promised ACA repeal will take, or the timeline for developing a replacement. Jost
believes a full repeal can't be accomplished any time soon, as it would result in the loss of health insurance for upwards of 20
million people.
Cost-Sharing Reductions
The Health and Human Services Department, as required by the ACA, reimbursed insurers for reducing plan members costsharing mechanisms, like copays and coinsurance.
House Republicans sued, saying Congress never approved the funds for the program. They argued the HHS's action violated
the Constitution's appropriations clause.
The HHS responded that the lawsuit was an unprecedented step by Congress to meddle in the executive branch's affairs. It
urged the U.S. District Court for the District of Columbia to reject the House's claims.
The court, however, granted the House pretrial judgment. It blocked the HHS from making further payments, but stayed its
2016 The Bureau of National Affairs, Inc. All Rights Reserved. Terms of Service
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House's Obamacare Suit Paused Until New Year, Health Care Daily Report (BNA)

order pending an appeal.


The HHS immediately filed an appeal. Its appellate brief was filed Oct. 24, and the House won an extension until Dec. 23 to
file its response brief. The administration's reply brief would have been due Jan. 19, 2017.
Instead, the case will be held in abeyance until at least Feb. 21, 2017.
Ball in Trump, Congress's Court
What will happen to the case after Feb. 21 is anyone's guess.
Jost told Bloomberg BNA he doesn't believe any president would want the district court's opinion to survive, as it gave
Congress the power to sue an executive branch agency based on its interpretation of a law. He predicted the Trump
administration would continue fighting the case.
But if the new administration agrees with the district court that the HHS's payments to insurers were illegal, there wouldn't be
any reason for the appeal to continue, Blackman said.
Trump's HHS simply would stop making the payments, he said. Insurers would be out billions of dollars.
Insurers options going forward are limited, both Jost and Blackman said. Insurers might be able to withdraw from the
individual markets, withdraw certain plans or products or raise premiums, but state and federal law likely would prevent that,
at least for 2017.
Millions of people already signed up for exchange plans for 2017, and insurers will have to absorb the losses from the costsharing reductions for those plan members, Jost said.
Blackman agreed. By law, insurers may not pass on the cost of the subsidies loss to their members, though premium
increases might be possible in 2018, he said.
Transitional Relief?
The question, according to Blackman, is whether there will be any transitional relief for insurers.
Jost sees only one reasonable solution. Congress must appropriate the money to pay insurers in 2017. Just doing away with
the payments without a reasonable solution to the problem isn't rational, he said.
Republicans must figure out a way to work with insurers, Blackman agreed, but said authorizing the payments may be a
bridge too far for them.
Congress has to walk a fine line, he said. It can't risk hurting insurers too much, but at the same time won't give insurers as
much money as they received under the Obama administration.
Insurers bet on Hillary Clinton winning the presidency, meaning there would be no change in the status quo, Blackman said.
Trump's victory upends the status quo.
Thomas G. Hungar, Todd B. Tatelman and Eleni Roumel, of the House of Representatives General Counsel's Office,
Washington, are representing the House Republicans. Alisa B. Klein, Mark B. Stern and Carleen Mary Zubrzycki, of the U.S.
Department of Justice, Washington, are representing the administration.
To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bna.com
To contact the editor responsible for this story: Peyton M. Sturges at PSturges@bna.com
For More Information
The order is at http://src.bna.com/kvR.

2016 The Bureau of National Affairs, Inc. All Rights Reserved. Terms of Service
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