WASHINGTON ― House Republicans want a federal appeals court to let them delay the next phase of their lawsuit against President Barack Obama that would have devastating consequences for the Affordable Care Act.
A lower court this year ruled in favor of House Republicans’ claim that the Obama administration is illegally spending $5 billion a year on subsidies for the poorest Obamacare enrollees. With Obama on his way out, the Justice Department’s appeal would pit House Republicans against President-elect Donald Trump’s administration next year.
According to Politico, House Republicans don’t want the appeals court to take up the case, House v. Burwell, while Congress and Trump devise a health care agenda to succeed the Affordable Care Act, so they have formally asked the court to wait.
“In light of public statements by the President-elect and his campaign, 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,” the House Republicans’ motion to the appellate court says. “The status quo will be maintained during the abeyance period, because the district court stayed its ruling, permitting appellants to continue paying insurers the funds at issue on a monthly basis.” The motion requests the court delay any further action on the appeal until as late as Feb. 21.
The Obama administration rejects the lawsuit’s premise that the funds are being distributed illegally, and argues that lawmakers don’t have standing to sue a federal department.
If the House Republicans eventually prevailed in the case, it would cut off cost-sharing reduction payments made to health insurance companies that are required to reduce out-of-pocket costs like deductibles and co-payments for low-income people.
As The Huffington Post reported Saturday, eliminating these subsidy payments would give Trump and congressional Republicans their first major win in their war against Obamacare. But it also would severely disrupt the health insurance market.
But dealing this damage to Obamacare would come at a cost, and perhaps one higher than Trump and congressional Republicans are willing to pay, even as they prepare to scrap the Affordable Care Act.
The damage wouldn’t be limited to only those low-income enrollees. Health insurance companies would be faced with a choice of losing money in an already fragile market or abandoning it. That would extend the effects of cutting off those payments beyond the beneficiaries of these subsidies to other Obamacare enrollees, whose insurance plans would suddenly cease to exist.
Consumers whose insurers exit the market would then need to scramble to find new coverage ― if they could. Depending on the scale of the disruption, there may not be insurers still willing to offer policies on the exchanges, because they all would be subject to the financial losses caused by the lost subsidy payments.
Whatever congressional Republicans and the Trump administration may devise as a health reform platform to succeed Obamacare ― if they ever actually do ― would rely on private health insurance companies. Disruption to today’s insurance market by eliminating the cost-sharing payments could cause financial harm to those companies and make them wary of participating in any future health care reform.
And that’s not to mention any public outcry that may occur if millions of consumers suddenly find themselves uninsured through no fault of their own.
Even if the court accedes to the House Republicans’ request for a delay, the threat of these subsidies disappearing remains. Trump will retain the authority as president to end the subsidy payments if he wants to. Neither he nor his transition team has taken a public position on the matter.
More than half of those who enrolled in health insurance policies on the Affordable Care Act’s health insurance exchanges this year, or about 7 million people with incomes below 250 percent of the federal poverty level, which is $60,750 for a family of four, qualified for these subsidies. They are separate from the tax credits exchange enrollees can receive to offset their monthly premium costs.
This article has been updated to include a quotation from the Republicans’ appeal.