Just when you thought the Affordable Care Act was out of the legal woods, reform watchers are nervously awaiting another federal ruling in a case that could seriously affect the law's coverage expansion.
Rosemary Collyer, a U.S. District Court Judge for the District of Columbia, is poised to decide whether House Republicans have legal standing to sue the Obama administration in U.S. House of Representatives v. Burwell (PDF). The plaintiffs are challenging the administration's decision to use Treasury funds not appropriated by Congress to pay for $178 billion in subsidies over 10 years to help Americans with incomes below 250% of poverty with their out-of-pocket medical costs. Nearly 60% of exchange plan enrollees receive cost-sharing reductions (CSRs) through silver-tier health plans.
If the administration's funding of the CSRs is found illegal, exchange plans still would be required by the ACA to reduce cost-sharing but the plans would bear the cost. “That would significantly undermine availability of coverage,” said Tim Jost, a Washington & Lee University law professor who supports the ACA. “Insurers could pull out of the exchanges, or raise premiums dramatically the next year.”
Collyer's comments during a May hearing suggested she was leaning toward granting standing to the case. That would seem to run against Supreme Court precedent, which holds that members of Congress generally can't use the courts to challenge laws they don't like unless they suffer a concrete harm.
The administration may not be able to appeal on the standing issue until Collyer issues a final ruling on the merits of the full case. Allowing an immediate appeal on standing would be “quite exceptional,” said Nicholas Bagley, an assistant law professor at the University of Michigan. “But this is quite an exceptional case.”
