In a major victory for Republicans, a federal judge ruled that the Obama administration didn’t fund Obamacare’s subsidies properly.
The judge said Thursday that the subsidy program will remain in place pending an appeal. The win means that potentially millions of people could see their premiums rise as insurers lose subsidies intended to help them pay down healthcare costs.
It also gives Republicans a victory over what they deem “executive overreach” by President Obama.
The lawsuit focuses on whether money for the law’s cost-sharing reductions was approved properly by Congress. Obamacare’s tax credits are given to Obamacare customers to pay down the cost of premiums, while the cost-sharing reductions are given to insurers to help with deductibles and co-pays.
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Judge Rosemary Collyer ruled that Congress never appropriated the funding for the cost-sharing payments.
She found that unlike the tax credits, which were permanently appropriated by Congress, the cost-sharing reductions cannot be funded through a permanent appropriation.
The ruling means the GOP-controlled Congress that voted more than 70 times to repeal the law now can decide whether to approve the cost-sharing subsidies under the normal appropriations process.
Collyer found that the Obama administration’s defense did not hold water. The administration claimed that the lawsuit was over a disagreement on a federal statute.
However, Collyer said the case was over a constitutional issue, noting that the Constitution says that no money shall be spent without appropriations.
“The House’s injury depends on the Constitution and not on the U.S. Code,” she wrote.
Collyer was appointed to the bench in 2003 by President George W. Bush.
The White House didn’t say immediately whether it will appeal the ruling, although press secretary Josh Earnest said the administration is “quite confident about the power of the legal arguments that we need to make here.”
Earnest slammed House Republicans for bringing the lawsuit, saying it was unprecedented for Congress to sue the executive branch “over a disagreement on how to interpret a statute.”
“It is unfortunate that Republicans have resorted a taxpayer-funded lawsuit to refight a political fight that they keep losing,” he said.
Cost-sharing reductions are paid out based on the type of plan that an enrollee gets, and the reduction payments are only for low-income Obamacare enrollees. Only people who have incomes between 100 and 250 percent of the federal poverty level and buy a silver plan can get their co-pays and deductibles reduced.
The amounts of cost-sharing payments vary greatly based on the plan selected and the size of the deductible offered by the insurer.
At mid-2015, more than 5 million exchange enrollees had plans with cost-sharing subsidies, according to data from the Centers for Medicare and Medicaid Services.
