Federal Panel to Hear Obama Administration Appeal of ACA Insurance Ruling

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The battle between congressional Republicans and the White House over the Affordable Care Act is again escalating–in court and on Capitol Hill. The administration last week appealed a federal trial judge’s ruling that the government is improperly reimbursing insurers under a program to cover discounts for low-income consumers.

And House Republicans on Thursday began two days of hearings to poke holes at the issue. They released a report that said the administration distributed the funds even though it was aware it needed Congress’s approval.

The standoff centers on a program that reduces out-of-pocket costs for very-low-income individuals. The Congressional Budget Office has estimated the costs will come to about $130 billion from 2017 through 2026 [pdf]. The program helps reduce consumers’ deductibles, coinsurance and copayments.

House Republicans in 2014 filed a lawsuit over the payments. They alleged the administration defied Congress and paid the money to insurers for discounts they are required to offer. Lawmakers said they never appropriated the funds for the administration to do so.

The administration maintains the funds were available in another part of the law that provides money from the Treasury for the program that reduces health-insurance premium costs. More than six million people benefit from cost-sharing reductions.

In May, U.S. Judge Rosemary Collyer sided with Republicans but stayed her decision to give the administration an opportunity to appeal. The appeal filed Wednesday in U.S. Court of Appeals for the District of Columbia Circuit advances a battle over a central pillar of the health law on the cusp of a 2016 election season that has cast new uncertainty over the fate of the law.

The appeal will be assigned to a three-judge panel. While the appeal was expected, its timing as House Republicans hold hearings on the program is likely to reignite GOP claims President Barack Obama has exceeded his authority.

Republicans on a House Ways and Means subcommittee said Thursday that the administration obstructed their investigation by not complying with subpoenas for documents. Officials with federal agencies said they have been responding and working with the committee.

Steve’s Take: For the moment, let’s forget about the 63 times Republicans have tried to pass legislation that would repeal all or part of the Affordable Care Act. We even finally have the GOP’s substitute for Obamacare, and it, like the previous repeal bills, has zero chance of succeeding until and unless there is a Republican in the White House.

But aside from all the Congressional theatrics, real trouble has been brewing in the courts, and I mean trouble where chickens may come home to roost and perhaps put a fatal dent in Obamacare, after all. The administration’s appeal last week of Judge Collyer’s ruling that President Obama exceeded his authority by reimbursing insurers under a program to cover discounts for low-income consumers–even though he was aware that doing so necessitated Congress’s approval–is far from certain to prevail.

Now that the case is before a three-judge panel, if it gets to the Supreme Court, the outcome will ultimately depend upon who picks the ninth judge (replacing Antonin Scalia), the GOP or Dems. It’s all about the timing, in my opinion.

The current eight-member Court has been noticeably left-leaning, thanks to Justice Anthony M. Kennedy. I believe the case is unlikely to be heard before the ninth member is installed. The outcome most likely would be decided depending upon who claims the White House next year. The fate of Obamacare would surely hang in the balance.