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.
U.S. District Judge Rosemary Collyer in Washington is poised to decide whether House Republicans have legal standing to sue the Obama administration in U.S. House of Representatives v. Burwell.
The plaintiffs are challenging the administration's decision to use Treasury funds not appropriated by Congress to pay for $178 billion in subsidies to help people earning less than 250% of the federal poverty level with their out-of-pocket costs. Nearly 60% of exchange enrollees receive cost-sharing reductions through silver-tier plans.
If the administration's funding of those subsidies is found illegal, exchange plans still would be required by the ACA to reduce cost-sharing, but they 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. U.S. Supreme Court precedent holds that members of Congress generally can't use the courts to challenge laws they don't like.
The administration may not be able to appeal until Collyer issues a final ruling in 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.”