A big win on Thursday by House Republicans in a quest to defund part of Obamacare could be headed to appeal at a federal court where Merrick Garland is chief judge.
In a lower federal court, Judge Rosemary Collyer ruled in favor of the House of Representative in its dispute with the Obama administration over how insurance companies are reimbursed for offering lower-cost heath plans to lower-income households.
In House v. Burwell, Judge Collyer said the Health and Human Services and Treasury Departments improperly spent money on “cost-sharing” arrangements because the funds weren’t directly appropriated by Congress.
The Affordable Care Act, or Obamacare, allowed for two programs to provide tax credits and reduced premiums to consumers who qualified for them. The first program, known as Section 1401, changed the tax code that is already approved by Congress. The second program, Section 1402, allocated money to insurers to compensate for the lower premiums they offer to certain consumers.
The House argued that it had never approved any spending to pay for the insurance provider rebates. The Obama administration said it had the ability to spend the money under the tax code that funds Section 1401, since the two programs are “economically and programmatically integrated.”
Judge Collyer found that Section 1402 needed its own direct appropriation from Congress before it can be funded.
“Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or since. Congress is the only source for such an appropriation, and no public money can be spent without one,” Collyer said.
That said, Collyer put her ruling on hold until it could be considered on appeal. And where and how that appeal happens could determine the case’s outcome.
One possibility could come in the form of a request from the Obama administration for the Supreme Court to consider the appeal directly. But with the Supreme Court currently split on conservative and liberal lines, the administration could risk an evenly split decision, which would uphold Collyer’s ruling.
The other option is for United States Court of Appeals for the District of Columbia Circuit to take the case. If that court sounds familiar, it is the one where Merrick Garland, President Barack Obama’s Supreme Court nominee, serves as chief judge.
The court usually hears cases where three judges from the 11-person court are selected randomly to consider arguments. But on some occasions, the full 11-person bench will rehear a case already decided by the three-person panel.
And on the current full court, seven judges were appointed by Democratic Presidents.
Back in September 2014, the full Circuit Appeals court decided to rehear a three-judge panel’s judgment against another Obamacare provision with its full 11-judge bench. At the time, the act was seen as unusual. Two months later, the Supreme Court stepped in to hear the case, King v. Burwell, directly, invalidating the need for the en banc panel including Garland.
In a 6-3 decision, the Supreme Court ruled for the Obama administration in the dispute over insurance exchanges run at a state level.
In the current case, Judge Collyer found that the House had standing to sue the Executive Branch. The administration’s legal experts believe that on appeal, the standing issue may decide the issue in its favor before another court can review Collyer’s constitutional reasoning.
