I don’t want to jinx anything, ‘cause it ain’t over till the guy in the White House sings (or until we vote him out of the White House), but last week ended up being a surprisingly good week for those of us rooting for Obamacare. And now, we have another bit of good news on the Obamacare front.
In Tuesday’s post, I told you that I feared Trump might be ready to make good on his threat to cut off funding for Obamacare’s cost sharing reductions (CSRs), which would badly damage the Obamacare insurance markets. I also included a re-post of a detailed explainer from several months ago about the CSRs – how they work, why they’re so important, and how we got into the situation where Trump is even able to legitimately make such threats.
Well, late Tuesday we got a really important court ruling on that topic. This new ruling might not prevent Trump from going through with his sabotage, but it’s going to make it a lot harder for him to walk away from such a scheme unscathed. Here’s what happened, in short: the D.C. Circuit ruled that a group of state Attorneys General can intervene in a lawsuit in order to defend crucial Obamacare subsidies, in a case that was previously dependent entirely on the whims of President Trump. Needless to say, this gives the case a much better chance than it had previously of turning out favorably for those who rely on and/or root for Obamacare’s survival.
Now, in order to understand what the heck, that actually means, you’ll need to understand a bit about the lawsuit, and where it stood before Tuesday’s ruling. So here’s a quick background on the case, for those who aren’t familiar with it*: In 2014 the Republican House brought a lawsuit against the Obama administration, claiming that the administration didn’t have the authority to pay out the CSR reimbursements. The basis of this was a flaw of in the drafting of Obamacare – the law called for the CSR payments to be made to insurers, but it never made a specific appropriation of the funds. Only Congress has the legal right to appropriate funds, and since Congress failed to appropriate the money when they wrote Obamacare, the Obama administration had no authority under the law to make the payments. Or so the lawsuit argues.
To the surprise of nearly everyone, a District Court judge in D.C. not only took the case, but eventually ruled in favor of the House. Ruling that that the payments by the executive branch were impermissible, the judge granted an injunction to stop the payments. (Congress could still decide to pass new legislation appropriating the funds at any time, but the anti-Obamcare GOP Congress has not been inclined to do so. Though that appears to be changing a bit over the last few days).
However, realizing that it would be very disruptive to suddenly cut off the payments, the judge stayed her ruling until an appeal could be heard. So the payments were allowed to continue in the meantime. And of course, the Obama administration did plan to appeal. But before the appeal could be heard, the 2016 election was held, Trump won, and he came into the Presidency with a clear antipathy to Obamacare. As the new President, Trump inherited the Obama administration’s position on the CSR lawsuit. So now, awkwardly, it became the Trump administration defending against the GOP House in the appeal of the CSR case.
And that’s what gave Trump the upper hand in his threat-making spree. For the last few months, the case has been delayed at the request of both sides, because Trump and the Republicans had thought they were going to repeal Obamacare and the entire case would become moot. But obviously that has not happened. So with the case becoming relevant against, as Obamcare repeal failed, Trump was entirely in control of its fate: All Trump had to do was drop the appeal, and then the lower court’s injunction would go into effect: the CSR payments would stop immediately.
To be clear, Trump will likely cut off the CSR payments without even taking any sort of action in the court case. He’s been making threats indicating that he’s just going to stop the payments on his own any time he feels like it. And according to law professor Nicholas Bagley, Trump probably does have the ability to do so. But the key is that, before this Tuesday, this looming court case gave him backup. Trump could have stopped the payments and then defended against any blowback by saying that the law was on his side. If anyone complained about his decision (and they would have!), all he would have to do is say “hey, the court said these payments aren’t permissible.” And then ultimately, he’d drop the appeal, and the legal issue would be settled in his favor, backing up his argument.
But now, that ace in the hole is gone. As mentioned at the top, on Tuesday, the D.C. Circuit granted a motion by Attorneys General from 15 states plus D.C. requesting to intervene in the CSR case. This sort of thing can be permitted when a judge determines that the parties already involved in the case aren’t representing the interests of the parties who seek to intervene and that the intervening parties have an interest in the outcome of the case.
So now these AGs will be defending the interests of the people of their states in the case. And, most importantly, even if Trump were to drop the appeal, the case would still continue, because the AGs will be there to defend that side of the argument. Trump can no longer get rid of the case (and thus the CSRs) by simply dropping the appeal. This is huge news for supporters of Obamacare.
In closing, I’ll leave you with this thought from law professor Timothy Jost, who tidily sums up the significance of Tuesday’s court ruling:
The decision does not mean that the Trump administration is barred from ending the cost-sharing reduction payments. It does mean, however, that the administration cannot unilaterally stop the CSR payments, dismiss the appeal, and claim judicial imprimatur for its doing so.
*The background of the case is actually fairly complicated, so for those who are interested, please take a look at the re-post section of Tuesday’s post for a fuller explanation.