A federal judge ruled against a section of President Barack Obama's Affordable Care Act on Thursday,12 May, handing a victory to congressional Republicans who argued the Obama administration exceeded its constitutional authority over government spending. US District Judge Rosemary Collyer ruled that Obama cannot send billions of dollars in subsidies to private insurers without Congress' approval.
Collyer, of Washington DC, put her ruling on hold pending the administration's appeal, The Washington Post reported. The 38-page decision sided with the House of Representative, which sued the Obama Administration challenging over $175b (£121) of spending following a vote by House Republicans in July 2014.
Congressional Republicans argue that the subsidies measure was unconstitutional because Congress had rejected the administrations request for funding. However, the Obama Administration claims it withdrew the request and spent the money through an earlier appropriation.
"Congress authorised reduced cost-sharing but did not appropriate monies for it," Collyer said in her ruling. "Congress is the only source for such an appropriation, and no public money can be spent without one." According to USA Today, cost-sharing subsidies help reduce consumers' insurance payments. Subsidies are available to individuals who earn between 100% and 250% of the federal poverty level.
The latest ruling on the Affordable Care Act is not believed to be as large a threat as the two previous challenges by Republicans in 2012 and 2015. "It's a setback, and it's a distraction...but a lot of people think the administration will win on appeal," Katherine Hempstead, from the Robert Wood Johnson Foundation, told USA Today.
"This suit represents the first time in our nation's history that Congress has been permitted to sue the executive branch over a disagreement about how to interpret a statute," White House spokesman Josh Earnest told reporters, according to Reuters. The administration may include its argument that the House lacks the legal standing to sue the executive branch as part of its likely appeal.
"It's unfortunate that Republicans have resorted to a taxpayer-funded lawsuit to re-fight a political fight that they keep losing," Earnest continued. "They've been losing this fight for six years, and they'll lose it again."
House Speaker Paul Ryan, however, quickly praised the court's decision. Ryan called the decision "a historic win for the Constitution and the American people...the executive branch is being held accountable."
If the decision is upheld, insurers will still be legally required to provide low-income individuals with discounts on out-of-pocket costs, "but insurers won't be able to get reimbursed for that expense unless Congress appropriates the money," Timothy Jost, an expert on the ACA and professor emeritus at Washington and Lee University law school, told the Washington Post.
Experts say that many insurance companies would then stop participating in the insurance exchanges, which would reduce the competitiveness of the marketplace and result in higher premiums.