To buy President-elect Donald Trump time to craft an Affordable Care Act replacement, House Republicans have asked a federal appellate court to delay considering the Obama administration's appeal in a case that could end some payments to health plans and throw the individual insurance market into chaos.
The House Republicans' general counsel filed a motion Thursday to temporarily hold in abeyance all briefings in the appeal of a federal district court's May ruling in House v. Burwell that the Obama administration illegally compensated insurers for reducing low-income enrollees' cost-sharing responsibilities. A U.S. District Court judge nominated by President George W. Bush unexpectedly held that the payments were unconstitutional because Congress had not appropriated the money.
The cost-sharing reductions mandated under the ACA make it affordable for people with incomes up to 250% of the federal poverty level to obtain healthcare without having to pay high deductibles and coinsurance.
If those cost-sharing reduction payments were eliminated, as House Republicans have sought, insurers either would have to sharply raise premiums or exit the ACA exchange markets, since the law requires them to reduce cost-sharing burdens for eligible members in silver plans.
The incoming Trump administration and congressional Republican leaders have promised to quickly repeal most of the ACA. But some Republicans and health policy experts fear that any hasty, drastic moves would crash the individual insurance markets. They warn that ending the cost-sharing reductions without any replacement system might panic insurers by causing them to lose lots of money.
The U.S. Court of Appeals for the District of Columbia Circuit is considering the Obama administration's appeal in the case, and it's possible that court may dismiss the case based on lack of standing. But the Trump administration would face a major dilemma if the lower court's ruling were upheld and the payments to insurers were suddenly cut off.
Political observers have speculated that House Republicans would end the litigation and let the Trump administration resolve the issue without disrupting the insurance markets, which appears to be what they decided to do. The motion filed Thursday asked the court to direct the parties to file by Feb. 21 a joint status report indicating whether the parties are considering settlement or voluntary dismissal of the appeal.
The motion said the House Republicans and Trump's transition team are discussing potential options for resolving the matter. It added that “there is at least a significant possibility of a meaningful change in policy in the new Administration that could either obviate the need for resolution of this appeal or affect the nature and scope of the issues presented for review.”
Meanwhile, the motion added, the cost-sharing reduction payments to insurers would continue on a monthly basis.