If House Republicans can make it over the first hurdle in their lawsuit challenging the Affordable Care Act, their arguments might pose a serious threat to the healthcare law, some legal experts say.
U.S. District Judge Rosemary Collyer is now considering whether to allow the lawsuit to proceed or dismiss it for lack of standing on the House's part. Collyer's questions during oral arguments in the U.S. District Court for the District of Columbia, along with her subsequent requests, have led some to speculate that she will grant the House standing and let the lawsuit move forward.
If she does, and her ruling on standing is upheld by the appellate court, some believe the House's arguments in the suit could carry some heft. The case comes as the U.S. Supreme Court is set to soon decide the outcome of King v. Burwell, a challenge on the legality of premium subsidies in states without their own insurance exchanges.
In this latest case, the House argues that the administration is illegally spending money that Congress never appropriated for the law's cost-sharing provisions, which include reduced deductibles, co-pays and co-insurance for some beneficiaries, depending on income. The House estimates that the government is on track to pay insurance companies $178 billion over 10 years for cost-sharing.
“Once you get past standing and you get to the actual text of what is and what is not authorized for expending by the Treasury, 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, in general, the argument that the administration spent money that was never appropriated by Congress is sometimes “a good argument because Congress is supposed to control how money is spent, so the ability of the president to spend money against the expressed will of Congress is limited.”
He said such limitations are most clear when Congress specifically prohibits spending for certain purposes, but can be fuzzy otherwise.
James Blumstein, a professor at Vanderbilt Law School who's been critical about parts of the ACA, said the issue of whether the House has standing is “tougher” than the actual argument within the lawsuit over whether the administration is spending money that wasn't appropriated.
“If we assume for the sake of discussion that Congress appropriated money for one thing and it was spent on another thing, then I think the House position becomes pretty strong once standing is satisfied,” Blumstein said.
Of course, not everyone agrees. The government argues that the law directs insurers to reduce cost-sharing for low-income individuals, and, “In turn, the insurance issuer has a legal right to payment for the amount of these cost-sharing reductions.” The government cites a part of the law that reads “The Secretary shall make periodic and timely payments to the issuer equal to the value of the reductions.”
Tim Jost, a law professor at Washington and Lee University and a prominent supporter of the ACA, doesn't buy the House's argument, saying he supports the government's position that cost-sharing reductions are closely related to premium tax credits offered under the law, and the tax credits are covered by a permanent appropriation.
Still, he said, if a court were to side with the House and invalidate those cost-sharing payments, it could have damaging effects. That's because insurers would still be required to implement cost-sharing but without federal dollars to help, forcing them to raise premiums, he said.
“That would have a devastating effect on the individual market, and frankly the individual market for everybody, not just people who are low income because they'd have to raise their premiums across the board,” Jost said.
The House also argues in its lawsuit that the administration had no right to delay the law's employer mandate, which requires companies with 50 or more employees to provide coverage. Some experts say that too is a strong argument, while others say it's a nonstarter.
Everyone agrees, however, that the House's first challenge in the lawsuit will be to prove it has standing by showing the administration's actions caused it injury.
The House claims it was injured because the administration's actions usurped its power. The government, meanwhile, argues that “an abstract dilution of institutional legislative power” does constitute an injury, and the dispute is a political one of which the courts should steer clear.
During oral arguments last month, the judge seemed skeptical, at points, of the administration's claims that the House hadn't suffered any injury from its actions. After the arguments, she also requested to receive by June 15 documents related to funding decisions. That request, along with her remarks during oral arguments, have 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. Collyer was nominated by President George W. Bush.
But Ankur Goel, a health partner with McDermott Will & Emery, said Collyer's questions might still speak to standing. If the disagreement is over the administration's interpretation of the law then the House might not have standing, whereas if it's over whether Congress appropriated the money or not, then the House might have standing. Goel co-authored an amicus brief in King v. Burwell for the American Public Health Association siding with the government.
“Judge Collyer, she really likes to understand the cases before her,” Goel said. “She's a thorough and diligent judge. It's not unusual for her to ask the government, the executive branch, to explain itself. I wouldn't put too much stock in that request (for documents) as to what the outcome is going to be.”
Kloster also said Collyer's request for more documents might not hint at her ruling. She might, for example, have requested the documents to bulk up the record in case it goes to the appeals court, which generally doesn't act as a finder of facts, Kloster said. Or, she might just be trying to be efficient with her time, asking for the documents in case the lawsuit moves forward.
“This could be related to some standing issue; it could simply be managerial,” Kloster said. “I would hesitate to read too much into the judge doing her job building the record and getting formation from the parties.”
