In yet another opposition of the Affordable Care Act, a new lawsuit has been filed with the Supreme Court that seeks to prevent the payment of tax credit subsidies. The lawsuit could potentially undermine health care reform as well as force consumers to pay more health insurance.
If the case is successful, low and middle-income people will be paying much more in insurance premiums.
The suit was filed last month by the Republican-dominated House. The federal government has established healthcare reforms that would ensure that insurance companies keep their deductibles, co-payments and other cost-sharing low for the poor. However, with this lawsuit, the government will be blocked from reimbursing insurers for the subsidies.
The Affordable Care Act outlines the maximum amounts people will have to pay based on their incomes, and the rest is made up through federal subsidies. However, if the government does not reimburse insurers for the subsidies, the cost will have to be borne by the insurers. According to the lawsuit, no money was appropriated to reimburse the insurers for cost-sharing and that the administration would not be able to use money from a separate account that subsidizes premiums.
When the Affordable Care Act was enacted in 2010, it authorized cost-sharing subsidies. The suit argues that it was unconstitutional for the administration to tap the fund to pay these subsidies. The total expected amount over a ten-year period for these subsidies is approximately $175 billion.
However, it is still being speculated whether this suit will be able to proceed. Courts generally shy away from disputes between Congress and the executive branch. This particular lawsuit was filed only by the House and does not include the will of the Congress. The House will have to show its standing and will have to provide sufficient evidence that it was indeed injured by the administration. Even if the courts grant standing, the House will still have to prove that a specific appropriation for this subsidy is required.
If successful, the lawsuit may create problems for a large number of individual policymakers who will have to pay more.