Stopping (or Delaying) Obamacare's Less Known, Unlawful Subsidies Accelerates Demise of PPACA

From the New York Times:

The Trump administration asked a federal appeals court on Monday to delay ruling on a lawsuit that could determine whether the government will continue paying subsidies under the Affordable Care Act to health insurance companies for the benefit of low-income people — effectively prolonging uncertainty that is already rattling the health law.

The request could further destabilize insurance markets as insurers are developing rates and deciding whether to participate in 2018.

Insurers are supposed to submit their proposals to the federal government by June 21 and have already filed rate requests with several states. Loss of the cost-sharing subsidies, they say, could lead them to increase premiums by 15 percent to 20 percent or more, on top of any increases they might seek for other reasons.

In recent statements, the administration has not made any commitment to pay the subsidies beyond this month. ...

The legal fight stems from a lawsuit that the House of Representatives filed in November 2014 against the Obama administration. Last May, Judge Rosemary M. Collyer of the Federal District Court here ruled for the House, finding that the Health and Human Services Department had illegally paid billions of dollars in subsidies to health insurance companies.

The subsidies reimburse insurers for reducing deductibles and other out-of-pocket costs for low-income consumers — seven million people this year.

Judge Collyer said the spending violated the Constitution because Congress had never provided explicit authority for it. In particular, she said, the payments violated Article I of the Constitution, which states, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

“An appropriation must be expressly stated; it cannot be inferred or implied,” Judge Collyer declared.

President Barack Obama requested money for the cost-sharing subsidies as part of a budget he sent Congress in April 2013. Congress never approved the request. But the Obama administration saw the subsidies as essential to the success of the Affordable Care Act and began making the payments in early 2014, using money from a separate account established for tax refunds and tax credits.

Judge Collyer ordered a halt to the payments last year but suspended her order to allow the government to appeal.

The case has created an awkward situation for the Trump administration and for Republicans in Congress who began the lawsuit.

If the government continues paying the subsidies, it will, in effect, prop up the Affordable Care Act, even though Mr. Trump and congressional Republicans want to tear it down. On the other hand, if the government stops paying the subsidies, many insurers say they will sharply increase premiums or pull out of Affordable Care Act marketplaces, and Democrats will surely accuse Republicans of taking coverage away from millions of Americans.

The Trump administration has sent mixed signals, confusing insurers and consumers alike. The Health and Human Services Department said last month that it would continue paying the subsidies while the lawsuit was being litigated. But Mr. Trump has threatened to withhold the subsidies as a way to force Democrats to negotiate with him on a replacement for the 2010 health care law.

Several senior House Republicans have said they are willing to appropriate money for the subsidies, but the administration does not want that.

Mick Mulvaney, the director of the White House Office of Management and Budget, refers to the subsidies as “Obamacare bailout payments” and said on May 2 that the administration had not made a commitment to pay them beyond this month. Mr. Trump said he could stop the payments “anytime I want.”

The Congressional Budget Office estimates that the cost-sharing subsidies will cost $7 billion this year and $135 billion from 2018 to 2027.

The subsidies are available to people with incomes from 100 percent to 250 percent of the poverty level ($11,880 to $29,700 a year for an individual).