House leaders duel in court over ACA subsidies

In dueling documents filed in a federal court in San Francisco, the Republican and Democratic leaders of the U.S. House of Representatives took opposing positions on future financing of subsidies that have been a key part of the seven-year-old federal health insurance program.

Separately, the two groups of leaders asked a federal trial judge to let them file written arguments on the latest constitutional dispute over the Affordable Care Act, a controversy that could be crucial to the law’s future.

U.S. District Judge Vince Chhabria of San Francisco will hold a hearing on Monday afternoon as he pushes along quickly a case filed by 18 states and the local government of Washington, D.C., seeking to revive one of the key subsidy programs under the ACA.

President Trump, arguing that the entire ACA scheme is collapsing, has cut off the federal funds that have been flowing to insurance companies at a rate of $600 million a month to offset their costs in selling health coverage at lower cost to millions of lower-income people.

In ending those payments earlier this month, initially blocking a payment that was due to be paid last Friday, the President relied upon legal advice from Attorney General Jeff Sessions that Congress has not approved the funds for the subsidies to insurers, so it would be unconstitutional to continue them without that approval.

The Republican leaders of the House have been making that same constitutional argument in the federal courts for nearly three years, and they won a ruling by a federal judge in Washington in May of last year, upholding their claim that Congress has never appropriated the funds to cover the ACA subsidies to insurance companies. That ruling is under review by the U.S. Court of Appeals for the D.C. Circuit, so the lower-court judge’s ruling has not gone into effect. In the meantime, the government has continued to make the payments each month – until last Friday.
The California lawsuit by state and local governments in Judge Chhabria’s court involves the same constitutional question, but the Trump Administration is currently trying to get that lawsuit dismissed. Administration lawyers contend that the states had no right to file their California case because they already are involved in the pending case at the D.C. Circuit. (Lawyers for the state and local governments filed a brief with Judge Chhabria on Friday, contending that they were legally entitled to pursue their challengers in both courts.)

The high profile of the case in San Francisco grew even more prominent on Friday and Saturday, when first the top 11 Democratic leaders in the House asked the judge to allow them to file a brief supporting the state and local governments’ challenge, and then by the top three Republican leaders of the House seeking to file a brief supporting the Trump Administration view that reviving the insurance subsidies would be unconstitutional without new approval by Congress.

Although these leadership figures would not be actual parties in the case, they would offer their views as friends-of-the-court. Judge Chhabria has discretion whether to accept them in that role, but seems likely to do so because most of them have been involved with continuing congressional actions on the ACA.

Not surprisingly, the Democratic leaders argued in their planned brief that they were involved in the original passage of the ACA in 2010, and that everyone involved at that time understood that the law itself provided permanent funding for the subsidy payments to the insurers operating in the ACA marketplaces (“exchanges”), and the Republican leaders’ planned brief contended that the specific terms of the ACA do not provide any funding for the insurers’ subsidies and noted that Congress has since not approved any such spending.

Although the House has already won that dueling argument in the decision last year by the judge in Washington, Judge Chhabria is not legally bound to imitate that outcome in the case before him. The Supreme Court, while it has issued two crucial rulings on the scope of the ACA, has not ruled directly on the dispute over whether funding has been provided to cover the insurance companies’ subsidies.

In the House Republican leaders’ filing on Saturday, they did break ranks with the Trump Administration on whether the state and local governments could get a court in the D.C. Circuit Court case to require that the payments be resumed. The Administration had said in its court papers that such a remedy would be available to the state and local governments, but the House Republican filing said that case is limited in scope so the challengers would not be legally entitled to seek a remedy there by expanding that case to cover their claim.

Judge Chhabria has expressed some interest in whether the challengers have an alternative remedy available in the case in Washington, but has not yet indicated what position he will take on that question. It could be one of the issues explored in his hearing on Monday in San Francisco.

Aside from that issue, the issues likely to arise at the hearing are whether the state and local governments had a right to file their case in California, whether they would suffer any harm if the subsidies were not revived, and who is right about whether the ACA itself provided permanent funding for the insurer subsidies.

The state and local government challengers to the cutoff of the subsidies are only asking the judge, at this point, to issue a temporary ruling that would require the government to revive those subsidies, pending a final ruling later on the legality of the cutoff.