House Republicans argue that the Obama administration had no legal basis to fund a series of payments to insurers as part of Obamacare.
An investigation by two House panels uncovered a new memo used by the White House to justify payments to insurers to reduce copays and deductibles for low-income Obamacare customers.
When Obamacare was created, it set up a permanent appropriations process for funding the law's tax credits that pay down the cost of premiums. That meant that Congress did not oversee the spending levels on the tax credits.
The Obama administration sought to use the same permanent appropriations process for the cost-sharing reduction payments to insurers.
Republicans argue that the law enables only the tax credits to be funded through permanent appropriation, not the cost-sharing payments. House Republicans sued the White House in federal court, and a federal judge sided with them.
The administration appealed the ruling, but that appeal could be dropped once President-elect Trump assumes power next month. However, two Obamacare customers recently petitioned the federal appeals court to intervene and continue the lawsuit, as they may be affected by the loss of cost-sharing reduction payments.
The House Energy and Commerce and Ways and Means committees, which have been investigating the source of the cost-sharing payments for more than a year, announced new findings Thursday.
A prior report from the committees said the administration was warned by the Treasury Department in 2012 that it couldn't use the permanent appropriations for the cost-sharing payments.
However, a memo from the Office of Management and Budget gave the administration a legal justification for funding the program through permanent appropriation.
The committee said Thursday that it obtained the memorandum and concluded it didn't provide a "cognizable legal basis for using the permanent appropriation to fund the [cost-sharing reduction] program."
An addendum to an earlier committee report said that OMB officials scrambled to write the memo in 2013.
The committee said officials with the Internal Revenue Service raised concerns about the use of permanent appropriations for the payments. The committees' report said the memo was essential to the IRS on moving forward and making the cost-sharing payments through permanent appropriation.
The memo said that insurers would charge higher premiums without a permanent appropriation, which could lead to increases in subsidies to cover premiums, and so the "permanent appropriation would be used to cover the costs eventually," the committee said Thursday.
The committees said the memo doesn't address the "clear text" of the Affordable Care Act that provided an "authorization and an appropriation for premium tax credits, but only an authorization for [cost-sharing reduction] payments."
Lawmakers on both committees blasted the administration for what they called obstruction and for not turning over the memo earlier.
"Because of our committees' persistence, we have learned much more about the administration's decision to ignore the clear text of the ACA, disregard the separation of powers, and obstruct a congressional investigation to further its own political agenda," said Reps. Fred Upton of Michigan and Kevin Brady of Texas, the chairmen of the House Energy and Commerce and Ways and Means committees, respectively.
The administration did not return a request for comment on the new report.