A U.S. District Court judge today issued a ruling that could block the operation of the Patient Protection and Affordable Care Act (PPACA) cost-sharing reduction subsidy program.
The program helps PPACA public exchange plan users with income under 250 percent of the federal poverty level pay the plan deductibles, coinsurance amounts, and co-payments.
Judge Rosemary Collyer has ruled, in House vs. Burwell (Case Number 14-1967), that the U.S. Department of Health and Human Services (HHS) needs to get a current appropriation approval from Congress before it can send cost-sharing reduction subsidy money to health insurers.
Collyer says her court will enter a judgment in favor of the U.S. House and enjoin use of unappropriated moneys to make cost-sharing reduction payments.
"The court will stay its injunction, however, pending appeal by either or both parties," Collyer says.
When Congress drafted PPACA, it added funding for the premium tax credit subsidy program described in PPACA Section 1401 to a list of tax provisions with permanent appropriations, but it did not add the cost-sharing reduction program described in PPACA Section 1402 to the list of programs with permanent appropriations, Collyer says.
Collyer, who refers to PPACA using the acronym "ACA," writes in an opinion discussing the ruling that HHS Secretary Sylvia Burwell and other Obama administration officials responsible for administering the cost-sharing reduction program face "a failure to appropriate, not a failure of drafting."
"Congress’s subsequent inaction, not the text of the ACA, is what prompts the secretaries to force the elephant into the mousehole," Collyer writes. "There are no inherent flaws in the ACA that keep Section 1402 payments from being paid, in advance or otherwise."
Obama administration officials have argued that failing to make cost-sharing reduction subsidy payments would lead to nonsensical and undesirable results that are clearly in conflict with the goals of PPACA's drafters.
Collyer acknowledges that insurers might sue HHS if the government fails to make cost-sharing reduction program payments, but she says insurers can avoid undesirable effects by increasing their premiums. In that case, she says, insurers would get the additional cash needed to make the coverage work from the premium tax credit program rather than the cost-sharing reduction program. Collyer argued that the administration has been looking at the wrong questions, and that the U.S. Government Accountability Office has consistently emphasized that all appropriations, and, especially, permanent appropriations, must be expressly stated.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
