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.”
Supreme Court Chief Justice John G. Roberts Jr. upheld health insurance subsidies to qualifying Americans against a challenge that claimed the law authorized only tax credits for those who buy insurance on marketplaces “established by the state.”
Roberts agreed with administration lawyers that millions of people served by federal exchanges authorized for states that did not set up their own exchanges were lawful, reasoning that Congress’s intent was clear and that was the only way the law would work, even though the legislation’s wording was problematic.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible we must interpret the Act in a way that is consistent with the former, and avoids the latter,” Roberts wrote.
The House GOP lawsuit, House of Representatives v. Burwell, was aimed at the Treasury and Health and Human Services departments, and took another tack.
The suit, challenges the constitutionality of billions in subsidies to insurance companies that the government expects to issue over 10 years on behalf of taxpayers who sign up for coverage in federal or state-run health exchanges.