A federal judge’s decision Thursday that the Obama administration unconstitutionally spent money to pay for part of the Affordable Care Act may not disrupt health plans or beneficiaries right away. But the fresh uncertainty immediately delivered a blow to the share prices of hospitals and health insurers.
House Republicans alleged in a lawsuit that the administration illegally spent money that Congress never appropriated for the ACA’s cost-sharing provisions. Those provisions include reduced deductibles, copayments and coinsurance many Americans receive, depending on income, for plans purchased through the ACA’s insurance exchanges.
U.S. District Court Judge Rosemary Collyer agreed with House Republicans on Thursday, writing that appropriating the money without congressional approval violates the U.S. Constitution.
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California’s health insurance exchange estimates that its Obamacare premiums may rise 8 percent on average next year, which would end two consecutive years of more modest 4 percent increases.
The projected rate increase in California, included in the exchange’s proposed annual budget, comes amid growing nationwide concern about insurers seeking double-digit premium hikes in the health law’s insurance marketplaces.
Any increases in California, a closely watched state in the health law rollout, are sure to draw intense scrutiny during a presidential election. Republicans are quick to seize on rate hikes as further proof that President Barack Obama’s signature law isn’t doing enough to hold down health care costs for the average consumer.
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Health plans would likely feel the financial hit if the courts ultimately strike down Obamacare’s cost-sharing subsidies. That’s because those payments go directly to insurers to make up for lower payments from their poorest customers.
A federal court ruled today that the Obama administration has been improperly funding the cost-sharing subsidies. The ruling is stayed pending appeal, so there will be no immediate fallout for health plans.
But at stake is approximately $175 billion over a decade that insurers would receive to subsidize their Obamacare customers. Cost-sharing subsidies are available to enrollees with incomes below 250 percent of the federal poverty level who enroll in silver plans. They’re designed to reduce out-of-pocket costs when those individuals access medical care.
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As the fourth year of Obamacare approaches, Politico’s Paul Demko reports that consumers can expect more of the same price hikes and narrowed choices as they have seen the first three years. The Obama administration insists that prices only rose eight percent for 2016 over the previous year – even though that itself is still more than three times the rate of inflation, and ignores states like Minnesota where the average premium increase was over 30 percent.
“There are reasons to think the next round may be different,” Demko warns. He quotes a Deloitte executive who agrees. “A number of carriers need double-digit increases” for 2017. Those price increases will hit the Obamacare exchanges on November 1st, one week before voters elect a new President and Congress.
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The leaders of the House GOP effort to replace the Affordable Care Act (ACA) will brief lawmakers at a closed-door meeting Thursday before publicly releasing their plan in June.
The meeting, which will be attended by Speaker Paul Ryan (R-Wis.), marks the first time the task force will lay out a draft of its plan after months of conversations with members, according to a House GOP aide.
The plan is expected to include numerous standard Republican health policy ideas — including a controversial proposal to cap the employer tax exclusion for health insurance, according to two Republican lobbyists.
Democrats have long attacked Republicans for failing to come up with an alternative healthcare plan, but leaders, including Ryan, have promised to produce one that could be taken up by a GOP president next year.
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Today, a federal judge sided with the House of Representatives in a major lawsuit challenging executive branch overreach,ruling that the Obama administration has been making illegal payments to health insurance companies participating in the Affordable Care Act (ACA) exchanges. U.S. District Court Judge Rosemary Collyer found that Congress never appropriated the billions of taxpayer dollars that the administration has delivered to insurers through the ACA’s cost sharing reduction (CSR) program. Today’s decision is a victory for the rule of law. It may also give insurers pause about their future participation in the exchanges.
The issue raised by the House of Representatives lawsuit is that the executive branch cannot spend money without a congressional appropriation since Article I of the Constitution gives Congress the power of the purse. Today, Judge Collyer agreed, writing “Paying out [cost-sharing subsidies] without an appropriation violates the Constitution. Congress is the only source for such an appropriation, and no public money can be spent without one.”
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House GOP leaders announced Wednesday at a weekly closed-door conference meeting that they will present members with an update on the Republican Obamacare replacement plan on Thursday afternoon, according to a senior GOP aide.
The same day, Democrats and Republicans in a key committee had a civil conversation about health care policy, indicating where that debate may be heading.
The Obamacare replacement plan is part of House Speaker Paul Ryan’s (R-Wis.) promise to put together a conservative agenda ahead of the Republican convention this summer.
While the plan is not yet finalized, a hearing in Energy and Commerce Committee’s health subcommittee on Wednesday offered hints of what the replacement plan might contain. Committee members are mulling various ways to handle pre-existing conditions, quality of coverage, affordability and insurance regulation.
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