What you should know about United States House of Representatives v. Burwell

There has been a multitude of lawsuits challenging various features of the Patient Protection and Affordable Care Act (“PPACA”) since it was signed into law six years ago.  As a result, one might have a tendency to overlook the latest court ruling as simply another politically-motivated effort to derail the PPACA.

The United Stated District Court for the District of Columbia issued a decision earlier this month in the case United States House of Representatives v. Burwell (May 12, 2016).[1]/  If the court’s holding prevails through appeals, the impact on the PPACA will likely be significant.

The PPACA requires insurers offering qualified health plans through the PPACA’s Exchanges to reduce deductibles, coinsurance, copayments, and similar charges for eligible insured individuals enrolled in their plans. These reductions are referred to in the statute as “cost-sharing reductions.”  The PPACA also directs the Secretary of the Department of Health and Human Services (“HHS”) to make periodic payments to the insurers of the qualified health plans making these cost-sharing reductions, with such payments being equal to the value of these cost-sharing reductions.  The central issue in this case is whether the government, which has paid perhaps as much as $150 billion dollars in cost-sharing reductions, was authorized under the United States Constitution to do so starting in 2014.

The plaintiffs in the lawsuit – the United States House of Representatives – contend that, while the PPACA authorizes the government to make these cost-sharing reduction payments to the insurers of qualified health plans, Congress had not appropriated funds for these payments since January 2014.  The court analyzed the complicated issue of whether these payments were funded through a “permanent appropriation” (similar to the permanent appropriation under the PPACA that funded premium tax credits to low-income individuals), or whether such payments were subject to “current appropriations” (which allows an agency to obligate funds only in the year or years for which they were appropriated).

The court concluded that: (i) the cost-sharing reductions were not funded by a permanent appropriation; (ii) Congress had not otherwise appropriated funds for the payment of these cost-sharing reductions; and (iii) therefore, the government’s actions in making these payments were not authorized by law.  The court granted the plaintiffs’ motion for summary judgment and enjoined any further payments by HHS for cost-sharing reductions. The judge, however, stayed her injunction pending appeals by the parties.

Developments in this lawsuit merit your attention in view of the far-reaching effects should the House of Representatives ultimately prevail.  A copy of the decision is available at:

https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2014cv1967-73

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[1]/             In 2015, this court ruled that the House of Representatives has standing to pursue its claim that the government violated the United States Constitution by spending public monies that were not appropriated by Congress.  The May 12 ruling addressed the merits of the plaintiff’s case.  Article I, § 9, cl. 7 of the United States Constitution states, in pertinent part, that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law ….”