Capitol Correspondence - 08.04.17

Court Rules That States Can Defend ACA Cost-Sharing Subsidies

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On August 1, a federal appeals court said that state attorneys general can defend the cost-sharing reduction (CSR) subsidies provided for in the Affordable Care Act (ACA). The subsidies have been a topic of discussion inside the beltway for some time, most recently by President Trump after the efforts to repeal and replace the ACA fell apart in the Senate last week. The President threatened to stop the payments, which are used to cover deductibles and co-pays incurred by certain low-income Americans. The Obama administration was sued by the Republican-led House of Representatives over CSRs in 2014, with the legislative body arguing that the Executive did not have the authority to make the payments that had not been explicitly appropriated by Congress. That case (House v. Price) is still pending, and what happens to CSRs in the next several months may impact the court in its disposition of the case. If President Trump does decide to discontinue the payments, Congress could intervene and authorize funds for them. But in so doing, they might be forced to acknowledge that the payments are necessary to keep the insurance markets stabilized. If Congress does not intervene to appropriate funds, their inaction could signal acquiescence that the President has unilateral authority over the payments. Thus far, there has been little appetite among lawmakers to cease the CSRs, court case notwithstanding. 
Against this backdrop, the court that is currently adjudicating House v. Price ruled that states can intervene in the case. The United States Court of Appeals for the District of Columbia granted the motion of attorneys general from seventeen states and the District of Columbia to intervene in the case. The states argued that they have an interest in the action and they do not believe the Trump administration is adequately defending their interest. For now, the payments are being made despite an initial court holding that sided with the House in its argument that the payments were illegal. That decision was appealed, and payments were allowed to continue pending appeal. This most recent court decision says that states have standing to sue the President over CSRs if he does decide to discontinue them.