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Affordable Care Act Suffers Court Setback



Obamacare, or the Patient Protection and Affordable Care Act as it is legally known, has been dealt a setback by the federal courts on May 12, 2016. The decision by Judge Rosemary Collyer, of the United States District Court for the District of Columbia, determined that only Congress has the right to allocate the public money from the public purse.

While the lawsuit has constitutional ramifications, there also may be politics in play. The GOP-led US House of Representatives was the plaintiff in the suit challenging the allocation of the money by the executive branch. The argument in the suit was that President Obama overstepped his constitutional powers by creating a financial subsidy.

The U.S. Constitution states that: “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” The judge referred the portion of the constitution that includes the following: “the administration does not have the power to spend money on ‘cost-sharing reduction payments’ to insurers without an appropriation from Congress.”

This decision is not a fatal blow to the signature piece of legislation by President Obama, but it certainly has a major impact. Obamacare provides a subsidy to health insurers to keep premium costs down. This decision adds another layer of uncertainty to this ever changing premium process.

An appeal by the administration, which has been promised, would automatically stay the effects of the district court ruling. Judge Collyer also delayed implementation of her ruling until after an appeal could be heard. Therefore, there will be no immediate changes in the health care law are until the judge would be upheld on appeal.

By Bob Reinhard
Edited by Cathy Milne

United States Constitution: Article I; Section 9
The Hill: Judge rules for House GOP in Obamacare suit
Image Courtesy of Michael Weinberg’s Flickr Page – Creative Commons License