Republicans scored their biggest legal victory over Obamacare when a federal judge found the White House illegally paid insurers without congressional approval.
So far Republicans have been positioning the ruling as a victory over Obama’s executive overreach, but they have largely been mum on whether they are in favor of approving the funding for subsidies called cost-sharing reductions.
“This is about upholding the Constitution, period,” A Republican House aide told the Washington Examiner. “The court sided with Republicans and our efforts to respect the rule of law.”
Cost-sharing payments are given to insurers to help them lower the cost of co-pays and deductibles for lower-income Obamacare enrollees. The lawsuit filed by House Republicans in 2014 argued that the cost-sharing payments were never appropriated by Congress.
Top-ranking Republicans said the Obama administration couldn’t spend taxpayer money without an appropriation.
“Disagreeing with Congress doesn’t give the White House the authority to circumvent Congress,” said Sen. Chuck Grassley, R-Iowa, chairman of the Senate Judiciary Committee.
Other Republicans played down any impact on consumers.
“Although insurance companies would no longer receive federal resources for the program, individual cost-sharing levels are set by law,” said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee. “Today’s decision reflects solely to payments to insurers.”
Studies have shown that while the payments go to insurers, the loss of such payments could trickle down to consumers.
A recent study from the left-leaning think tank Urban Institute showed that premiums for certain silver plans, the most popular of the three tiers of Obamacare plans, could rise by up to $1,000.
The loss of payments to insurers could cause premiums to rise and therefore increase federal government costs. As premiums for Obamacare enrollees increase, so do the tax credits given to low-income enrollees.
The Urban Institute said that about 85 percent of people on the exchanges get a tax credit.
If the ruling is upheld by higher courts, Congress would have to decide whether to keep the cost-sharing reductions.
The GOP won’t have to deal with the issue immediately. The administration has announced it will appeal the ruling, and any appeal could take more than a year, experts say.
That means that a new president and new Congress will have to decide what to do if the ruling stands.
One legal expert recalls what happened when the GOP was in a similar predicament last year due to a court challenge over Obamacare.
In the case King v. Burwell, Obamacare’s tax credits were at risk for Obamacare enrollees in more than 30 states.
In the run-up to the Supreme Court’s ruling, which decided in favor of the administration, GOP lawmakers sparred over what to do if the ruling ended the tax credits and millions were left without insurance because it would suddenly be unaffordable.
Some lawmakers offered plans to extend the tax credits for a short period, a move more conservative GOP lawmakers opposed.
“My sense from where they were a couple of days before the Supreme Court ruling, more members were looking to dodge the issue or paper over the consequences of someone losing their subsidies,” said Tom Miller, a scholar for the American Enterprise Institute. “That is just the nature of short-term political and economic pressures.”
Another big question is whether lawmakers would try to get money back from insurers since the administration wasn’t authorized to give the funds in the first place.
“Those dollars are flying out periodically from the Treasury to the insurers,” Miller said. “It is not just that we are not going to get any new money, they have to get the old money back.”
The House has made efforts to reach a consensus on an Obamacare replacement plan. A task force of House committee leaders is developing a replacement plan now, and Upton has said that the task force plans to release the plan this summer.
While the GOP isn’t planning to vote on the plan, it will act as a template for a Republican president to use to repeal and replace Obamacare, he has said.
