One of the most significant court battles over the Constitution and the Affordable Care Act may just fade away, in the wake of an order Monday by a federal appeals court. The dispute over funding for the health care law’s payments to insurance companies to keep their premiums and deductibles lower for people with lower incomes has been put on hold until February 21 by the U.S. Court of Appeals for the District of Columbia Circuit. That is a month after the new Trump administration begins.
The Circuit Court acted at the request of the House of Representatives – and over the objection of the Obama administration – after lawyers for the House had told the court that the GOP leaders were negotiating with the incoming Trump administration about options for ending the lawsuit.
The House won the case in a federal district court, which ruled that the Obama administration was using funds that Congress had not provided to pay the insurance companies for their role in making the consumer subsidies in the health care law work as planned. The Treasury has already paid out billions of dollars in those payments, and is continuing to make the payments because the district court put its ruling on hold to allow the federal government to appeal.
The future of the entire Affordable Care Act is in doubt, because President-elect Trump has joined in the Republican congressional leaders’ plans to “repeal and replace” the entire law. That process, if actually pursued, may take many months, and perhaps longer.
The government filed its opening legal brief in the Circuit Court on October 24, under a schedule set up before the election in November. But after the election, with the Trump victory, the House’s lawyers told the court that there was “a significant possibility of a meaningful change in the new administration.” Among other options, that filing said, was that the new government may simply withdraw the appeal, That would let the district court order against the funding take effect.
If that were to happen, the payments to the insurance companies presumably would have to stop, even if the new government and Congress had not yet worked out a plan to abandon the health care law and, with that, all of the system of subsidies that are an economic mainstay of the overall ACA could collapse. The subsidies are designed to keep enough people in the health insurance marketplaces to keep the ACA economically functioning.
One of the key issues in the government’s appeal is whether the House has any legal right to pursue its challenge to the way the Obama administration has operated the subsidy scheme, including the payments to insurers. The government contends that, once Congress passes a law, it cannot dictate how the government implements that law without passing new legislation.
In trying to head off the House’s request for the case to be put on hold, Justice Department lawyers voiced doubt about whether the new administration would want to have left oundisturbed a federal court ruling giving one house of Congress the legal permission to second-guess, in court, how a federal program is carried out by the Executive Branch.
The government’s filing argued that, because the ACA subsidy scheme was written into the law by Congress, it remains “the law of the land.” It thus said it would have no objection if the House ended the constitutional controversy by simply dismissing its lawsuit, and thus leading to the dissolving of the district court order against the payments to insurers.
With the Circuit Court’s order on Monday, further filings of legal documents in the case are postponed until February 21 That will then hand the initiative to the Justice Department in the new Trump administration.