Apr 4, 2017

Ryan is still suing the administration. What next?

(J. Scott Applewhite / AP)

Last week, Speaker Paul Ryan told reporters the House won't drop its lawsuit against the Trump administration — originally filed against the Obama administration — over Obamacare's insurer subsidies that lower out-of-pocket costs for low-income people. And on Monday, the administration said it'll keep paying the subsidies while the case is being litigated, per The Hill.

While this was new information, it didn't fully answer the question of what either party will do next. Both Congress and the administration still have major decisions to make, and the sooner they make them, the better for insurers. Here are the options, according to legal experts.

The House argument: The payments are being made illegally, as Congress never passed a law funding them. A district court judge has agreed with the House, but the Obama administration appealed the case before Trump was sworn in. In February, the case was delayed and is currently on hold, but the first check-in will be in May.

What now? Here are the options for both the House and the Trump administration going forward.

The administration:

  • Drop the appeal of the case, essentially accepting the district judge's ruling. The payments would then stop. It would also keep the district court precedent that Congress can sue the administration.It could also appeal only the decision that the House can legally sue the administration. But that wouldn't settle the issue of the payments.
  • Keep fighting the case, paying insurers the subsidies in the meantime.
  • The administration would then either wait for the court to make a decision, or for Congress to pass a law giving the money. Either would settle the issue.
  • The case could also be delayed indefinitely. This would keep the payments flowing to insurers, although it wouldn't give them any kind of concrete certainty.
  • Try to settle the case. But this could also get really awkward. Legally, both parties would likely have to take the case back to district court and then make the argument that they want to keep making the payments, even though almost everyone involved opposed them when Barack Obama was still president.

The House:

  • Wait for the lawsuit to be decided and do nothing in the meantime.
  • Pass a law giving insurers the money, most likely packaged with a short-term spending bill that must be passed by the end of April to keep the government running. The subsidy spending provision could be short-term, either through the end of 2017 or 2018 to give insurers short-term clarity. Or it could be permanent, giving insurers certainty that they'll receive the payments indefinitely.

Why this matters: Insurers have to pass along the subsidies to low-income people; that part of Obamacare isn't being questioned. Insurers say it's critical that they continue receiving the money, especially in light of challenges they're already having making a profit on exchanges.

Bottom line: They need guidance soon, as they have to make crucial 2018 decisions beginning in a few weeks. If the money isn't paid, or there's still uncertainty about the issue, insurers could exit the market in droves, premiums could skyrocket, or both.

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