The Obama administration suffered yet another setback Monday in its attempts to fend off House Republicans' lawsuit alleging it funded part of the Affordable Care Act without permission from Congress.
U.S. District Judge Rosemary Collyer rejected the administration's request to immediately appeal her earlier ruling that House Republicans have standing to sue the administration. Had she agreed to the so-called interlocutory appeal, a federal appeals court could have agreed to hear the matter before the case was resolved in District Court.
House Republicans allege in the lawsuit that the administration is illegally spending money that Congress never appropriated for the ACA's cost-sharing provisions. Those provisions include reduced deductibles, copayments and coinsurance that Americans receive, depending on income, for plans purchased through the ACA's insurance exchanges.
House Speaker John Boehner (R-Ohio) issued a statement calling Collyer's rejection of the White House's request “another important step toward holding the president accountable for his unconstitutional actions."
White House spokeswoman Katie Hill said in a statement the administration was disappointed but "confident that the courts ultimately will dismiss this taxpayer-funded political stunt, which would make healthcare more expensive for millions of Americans.”
Health law experts disagree about the gravity of the threat the lawsuit poses to the ACA itself. Some say a decision against the administration could, as the White House suggests, make insurance unaffordable for many Americans. Others say insurers are legally required to continue offering cost-sharing reductions regardless of whether the government reimburses them.
Collyer acknowledged in her order that other judges may disagree with her decision to grant the House standing to sue the administration. But she concluded that an interlocutory appeal would not necessarily help resolve the case any faster. She said cases such as the one filed by House Republicans can be decided “in a matter of months—likely before an interlocutory appeal could even be decided.”
Collyer wrote that it makes more sense to decide the case in District Court and then let the appeals court consider both the standing question and the merits at the same time. But legal experts called the decision somewhat surprising given the unprecedented nature of the case.
“I think it's very likely that her decision will be reversed on appeal, so for her to proceed at this point on the merits without giving the court of appeals a chance to review her decision on standing is, I think, very problematic,” said Tim Jost, a law professor at Washington and Lee University and a proponent of the healthcare reform law.
Josh Blackman, an associate professor of law at South Texas College of Law, likewise said he was surprised but also that her logic wasn't entirely unreasonable. It's possible the case could be resolved at the district level as soon as April, he said. The appeals court could have taken six months to a year to review whether the House has standing to sue, he said.
With the case moving forward, there's a real chance that the House's argument about illegal spending could prevail. “The government's strongest argument is standing, their weakest position is on the merits,” Blackman said.
The House has estimated that the government is on track to pay insurance companies $178 billion over the next decade or so for cost-sharing.
The Obama administration has argued that insurers have a legal right to reimbursement for cost-sharing reductions mandated under the law. The administration cites a part of statute that says HHS “shall make periodic and timely payments to the issuer equal to the value of the reductions.”
Collyer has shown “a very strong inclination to rule for the House,” Jost said, though he also said the outcome is hard to predict because neither side has argued the merits yet.
The Obama administration could try at least one more legal maneuver that could get the circuit court to intervene. It could seek what's called a writ of mandamus.
But Blackman said the odds of getting one would be very low because the White House would have to argue there would otherwise be irreparable harm. Collyer's decision allowing the House to sue, however, doesn't change anything about the way the ACA plays out in the real world.