Trumps plan to kill Obamacare isnt just recklessits illegal, and likely to fail in the courts.
By Mark Joseph Stern at Salon
http://www.slate.com/articles/news_and_politics/jurisprudence/2017/10/trump_s_plan_to_kill_obamacare_is_likely_to_fail_in_the_courts.html
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There are three ways to avoid this expensive mess. First, and most obviously, states can sue to force the administration to continue paying out cost-sharing reductions. This summer, the D.C. Circuit allowed 18 attorneys general to intervene and defend the subsidies; these attorneys general can now ask the court to block the implementation of Trump’s executive order. Alternatively, these states can file a new lawsuit in a federal district court. (Several attorneys general have already indicated they will do just that.) When Congress passed the ACA, after all, it instructed HHS to make these payments. And in doing so, it effectively appropriated the necessary funds. As Georgetown University law professor David Super explained to my colleague Jordan Weissmann in 2015: “The Supreme Court has been very clear that you do not have to have a law that says ‘appropriations’ across the top. You just need a law directing that the money be spent.”
Second, insurers could sue the federal government to reimburse them for the cost-sharing reductions. Nicholas Bagley, a professor at the University of Michigan Law School, has explained how this would work, and why it would succeed. The federal government keeps a permanent appropriation called the Judgment Fund that pays court judgments when “payment is not otherwise provided for.” Insurers could sue in the Court of Federal Claims and would likely win given the ACA’s unequivocal command that these payments be made. As Bagley put it: “The question is thus not whether the government will pay, but when.”
There is already precedent for this type of litigation. The ACA includes a “risk corridor” program to encourage insurers to offer health plans on exchanges. This initiative directs HHS to collect money from health plans that exceed their financial targets and redistribute it to plans that lose money. But Congress failed to include an explicit appropriation for the program. Moreover, congressional Republicans kept attaching a rider to appropriations bills that prevented HHS from redistributing these funds. Eventually, insurers sued to get the money they were owed under federal law. The Court of Federal Claims has repeatedly found in their favor, ordering the government to pay out hundreds of millions of dollars to insurers. Trump’s retraction of cost-sharing subsidies will provoke similar suits and awards.
A third and final solution, one proposed by Slate contributor and University of Chicago Law School professor Daniel Hemel, combines these first two approaches. Hemel has urged states to make cost-sharing payments themselves, then sue the federal government to recover the money from the Judgment Fund. As Hemel put it to me in an interview on Friday, these states would “step into the shoes of the insurers in any litigation against the feds” at the Court of Federal Claims. Meanwhile, they can continue paying the amount that HHS was required to pay from their own budgets. Presumably, only progressive states would participate in this plan, but their actions could help stabilize the ACA at a time when such stabilization is desperately needed. “It seems irresponsible for states not to save their exchanges when they have the opportunity,” Hemel said.
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