Sunday, November 30, 2014

GOP Lawsuit Against ObamaCare Focuses on Cost-Reductions

In mounting the latest court challenge to the Affordable Care Act, House Republicans are focusing on a little-noticed provision of the law that offers financial assistance to low- and moderate-income people.

Robert Pear, “Suit on Health Law Puts Focus on Funding Powers,” New York Times, November 29, 2014

In April, the Supreme Court will hear the case the GOP House has lodged against the Obama administration.

Insurance companies are now reducing co-payments, deductibles and other out-of-pocket costs for some people in health plans purchased through 37 federal insurance exchanges. The federal government is reimbursing insurers for these “cost-sharing reductions.” But these reimbursements may be illegal under the wording of the health law.

In their lawsuit, House Republicans say the Obama administration required , but never sought, nor received, Congressional approval to make these payments to insurance companies nor does the Law say they can. As a result, they contend, the spending violates the Constitution, which says, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

Nevertheless, the administration has been making the payments, using money from a separate account established for tax refunds and tax credits.

“Under a standard insurance policy, for example, consumers might have to pay a deductible of $2,500 before the health plan starts to pay. But with cost-sharing subsidies, the deductible could be reduced to $750 or just $100. And the co-payment for a doctor’s office visit could be cut to $15 from $45.

The lawsuit, House of Representatives v. Burwell, is the latest battle in a political war over the Affordable Care Act, adopted in 2010 without any Republican votes.

Once again, President Obama, who considers himself a Constitutional scholar, has chosen to go around the GOP and the Constitution, to establish or change the law as he sees fit under his executive powers.

The House suit was filed two weeks after the Supreme Court agreed to hear a separate case challenging the tax-credit subsidies in three dozen states that rely on the federal insurance exchange.

The health care law says the tax credits shall be available to people buying insurance on an exchange “established by the state.” The Internal Revenue Service has allowed tax credits for plans bought through the federal exchange as well, saying that is what Congress intended.

The Obama administration and the IRS may have had the best of intentions, but their cost-reductions for co-payments, deductibles, and out-of-pocket expenses, may be illegal under the Constitution and wording of the Health Law.

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