A federal court has ruled unconstitutional the Obama administration’s reimbursement of insurance companies under the Affordable Care Act (ACA), in a lawsuit the U.S. House of Representatives brought against U.S. Department of Health and Human Services (HHS) Secretary Sylvia Burwell.
The ACA created a legal mechanism for the federal government to offset insurers’ costs “but did not appropriate monies for it,” wrote Rosemary Collyer, U.S. District Court Judge for the District of Columbia, in the Court’s opinion on May 12. “Paying out … reimbursements without an appropriation thus violates the Constitution.”
The government had argued the ACA’s appropriation to fund premium tax credits, authorized by Section 1401 of the law, equally applied to reimbursing insurers, located in Section 1402. “Such an appropriation cannot be inferred,” Collyer wrote, noting the Supreme Court’s opinion in King v. Burwell (2015) that “if the statutory language is plain, we must enforce it according to its terms.”
Collyer’s decision recognizes as unlawful spending an estimated $175 billion in reimbursements made to insurance companies from the U.S. Treasury. Collyer stayed the effect of her decision, anticipating the government’s appeal to the DC Court of Appeals.
‘No Appropriation, No Money’
Josh Blackman, associate professor of law at South Texas College of Law and author of Unprecedented: The Constitutional Challenge to Obamacare, says the decision elevates the rule of law over populist and political interests.
“This is a significant victory, and not for House Republicans or Obamacare opponents,” Blackman said. “It is a victory for the rule of law and the separation of powers. Article I of the Constitution provides that ‘No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.’ No appropriation, no money.”
Blackman says Collyer based her decision on the power of the purse, which, as James Madison wrote, the Constitution gives solely to Congress.
“In Federalist No. 58, James Madison wrote that ‘This power over the purse may, in fact, be regarded as the most complete and effectual weapon’ of Congress to check the executive,” Blackman said. “Such appropriations,’ Judge Collyer wrote, ‘are an integral part of our constitutional checks and balances, insofar as they tie the Executive Branch to the Legislative Branch via purse strings.’ The ruling vindicates those principles.”
Day Late, Dollar Short
Dr. Jane Orient, executive director of the Association of American Physicians and Surgeons, says even if Collyer’s decision survives appeal, billions of dollars of harmful Obamacare spending will go unchecked.
“Had the Supreme Court found ACA unconstitutional in NFIB in 2012, the $150 billion would not have been spent,” Orient said. “At this point, the money is unlikely to be recouped even if the appeals court does not reverse. The harm done by one wrong decision is not repaired by a later correct decision based on it that addresses a small part of the initial disaster.”
Congress should have tightened its purse strings when the ACA was being written instead of waiting to do so through the courts, Orient says.
“Congress did not do its job of exercising the power of the purse,” Orient said. “Filing a lawsuit is a poor substitute for doing its job. Congress is abdicating its legislative function to the executive and the judiciary.”
Dustin Siggins ([email protected]) writes from Washington, DC.
U.S. House of Representatives v. Burwell, United States District Court for the District of Columbia, May 16, 2016: https://heartland.org/policy-documents/aca-reimbursements-opinion-us-house-representatives-v-burwell
Michael Hamilton, “Obamacare Court Rulings Protect Employers and Taxpayers’ Rights,” Consumer Power Report, May 18, 2016: http://news.heartland.org/newspaper-article/2016/05/18/obamacare-court-rulings-protect-employers-and-taxpayers-rights
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