Federal Court Finds Portion Of Administration’s PPACA Subsidy Funding Unconstitutional
A Federal Court has ruled that the Administration violated the law when it spent funds allocated under the PPACA for purposes other than those authorized by Congress.
A Federal Judge in Washington, D.C. has ruled that the Obama Administration acted contrary to the law and the Constitution when it used funds allocated under the Affordable Care Act to subsidize the cost of insurance to lower income policyholders despite a lack of authorization to do so from Congress:
A federal judge struck down a portion of President Obama’s signature Affordable Care Act health law on Thursday, ruling that Obama exceeded his executive authority in unilaterally funding a provision that has subsidized billions of dollars of insurers costs.
In a 38-page decision, U.S. District Judge Rosemary Collyer of the District stayed the ruling’s effect pending the administration’s certain appeal. Her decision sided with the U.S. House of Representatives, which brought the lawsuit challenging more than $175 billion of spending after a party-line vote by House Republicans in July 2014.
The House GOP argued the Obama administration’s decisions to fund payments to reduce deductibles, co-pays and other “cost-sharing” were unconstitutional, saying lawmakers rejected an administration request for funding in 2014.
Obama officials said they withdrew the request and spent the money, arguing the subsidies were covered by an earlier, permanent appropriation.
“The question is whether Section 1402 can nonetheless be funded through the same, permanent appropriation. It cannot,” Collyer wrote, referring to the provision in question.
“None of [the administration’s] extra-textual arguments — whether based on economics, ‘unintended’ results, or legislative history — is persuasive,” added Collyer, a 2003 George W. Bush appointee. “The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers under Section 1402.”
In a briefing Thursday after the decision, White House Press Secretary Josh Earnest called the lawsuit a new low in the battle over the controversial health care law and predicted the ruling would be overturned by the U.S. Court of Appeals for the D.C. Circuit because it charted new ground in the separation of powers between presidents and Congress.
“This is the first time in our nation’s history that Congress has been allowed to sue the executive branch over the interpretation of the statute,” Earnest said. He criticized Republicans for using taxpayer money to “re-fight a political fight that they keep losing.”
“They’ve been losing the fight for six years and they’ll lose it again,” Earnest said.
In arguments before Collyer last May, Justice Department attorney Joel S. McElvain called Congress’s complaint legally invalid and unprecedented in asking the courts to referee a political dispute that Congress could resolve by revoking the law, passing new legislation or withdrawing funding, among other things.
“There are any number of other tools the legislature can use to influence the executive branch . . . which is why we have not seen a lawsuit like this in over 230 years,” McElvain said.
George Washington University law professor Jonathan Turley, arguing for the House, said the administration’s argument would mean that Congress’s “power of the purse is effectively decorative.”
Collyer, a veteran judge who is taking senior status this month and becoming presiding judge of the Foreign Intelligence Surveillance Court, in her ruling blocked further spending “until a valid appropriation is in place.”
The politically sensitive case revives a battle over the health care law that the U.S. Supreme Court had settled last June, in a 6-to-3 decision that prompted Obama to declare from the White House Rose Garden, “The Affordable Care Act is here to stay.”
Lyle Denniston has more:
At issue in the case, as decided on Thursday, was the part of the ACA program that required insurance companies to provide coverage to low and moderate income consumers, mainly through policies sold on the exchanges, with the costs to the consumers lowered by reduced copays and back-up or co-insurance, along with higher deductibles. The insurance companies, however, do not have to absorb those costs; the ACA mandated that the government directly reimburse such “cost-sharing” arrangements, with federal funds.
Along with that part of the ACA, the law also provided tax credits to consumers at low or moderate income levels to help them afford the premiums charged for the insurance they obtained on the exchanges.
Together, the two programs were estimated to cost the government about $5 billion a year. In her new ruling, Collyer decided that the cost-sharing program, as implemented since January 2014, has been spending money that Congress did not approve. It is unconstitutional, she ruled, because no money can be taken out of the federal treasury if it has not been specifically provided by act of Congress.
“Paying out reimbursement,” she wrote, “without an appropriation [from Congress] violates the Constitution. Congress authorized reduced cost-sharing but did not appropriate monies for it, in the fiscal year 2014 budget or since. Congress is the only source for such an appropriation, and no public money can be spent without one.”
The judge estimated that, in the past two years, the government has spent billions overall without the authority to do so. The judge, however, found that Congress had provided authority to cover the spending for the tax credits to consumers who use them to help afford health coverage. That was funded, she said, through a permanent appropriation measure.
Collyer sharply ridiculed the government’s basic argument that the tax credit and cost-reimbursement parts of the ACA program were interconnected, and thus could both be funded out of that permanent appropriation for tax credits. (Under ACA, insurance companies can only provide cost-sharing arrangements to consumers who are eligible for the tax-credit subsidies.)
The government’s overall argument about linking the two approaches, the judge commented, is “most curious and convoluted.” Its “mother was undoubtedly necessity,” she added, with some sarcasm.
Although she ruled that the government had no authority to pay out any money to insurance companies as cost-sharing reimbursements, she did conclude that Congress had in fact authorized that program to be created. What is lacking, she found, was separate authority to make the payments contemplated by that provision.
If the normal route of appeal is followed, the case would move on next to the U.S. Court of Appeals for the District of Columbia Circuit. However, the administration also has the option of trying to move the case straight to the Supreme Court by asking the Justices to take it on without waiting for the D.C. Circuit to rule.
In addition to today’s ruling on the merits, any appeal of this case will have to deal with a preliminary matter that could bring a quick end to the case without resolving the ultimate legal issue. Last September, Judge Collyer rejected a motion filed by the Obama Administration and ruled that the House of Representatives did indeed have standing to file suit against the Administration under the facts alleged in the Complaint. As I noted at the time, this was a potentially significant ruling due to the fact that Federal Courts had previously rejected attempts by legislators to resolve disputes over the interpretation and implementation of a law through the Court system, ruling that such cases were barred by the “Political Question” Doctrine. In her September ruling, though, Judge Collyer ruled that the Administration’s seemingly open defiance of the fact that, under Article I of the Constitution, only Congress can authorize how Federal Government monies are to be spent, the House did in fact have standing to pursue the case through the Court system. The Administration had sought leave to appeal this issue to a higher court, but that request was denied and the case proceeded to the merits side of the argument, which ended today with the issuance of Judge Collyer’s opinion. As noted, the Administration has two options for appeal at this point. It can either seek its appeal at the Circuit Court of Appeals for the District of Columbia, or it can seek leave from the Supreme Court for a direct appeal from the U.S. District Court, something which the Justices only grant on rare occasions. If that application is denied, then the matter would go to the D.C. Circuit as normal. Where ever it goes, the relevant appellate court(s) will have to deal with both the standing issue and the merits ruling Judge Collyer issued today.
I’ve already discussed the issues surrounding the standing issues. While this remains an issue of first impression, I’m inclined to believe that, ultimately, the Courts will rule that while Congress may have standing in this case, the rules under which Congress as a whole, or an individual member, will have standing are severely limited. Alternatively, of course, the Court could rule that the standing rules that have been in place for decades remain valid and that neither individual members of Congress nor one of the Houses of Congress can maintain a suit in Federal Court for actions such as this. Given the fact that, in this case, that would mean that Congress would have no redress short of impeachment in response to an Administration that was spending money in a manner not authorized by Congress, though, one would think that the Courts would recognize that, in some situations they cannot dodge their own responsibility to uphold the law and the Separation of Powers established by the Constitution. As for the merits of the case itself, a review of Judge Collyer’s opinion seems to make clear that the allegations of the Complaint are true and that the Administration was indeed spending money in a manner not specifically authorized by Congress. This would seem to be a clear violation of Article I, and therefore unconstitutional. The fact that it was accomplishing a public policy goal is, in the end, entirely irrelevant.
Here’s the opinion: