Judge’s comments signal another legal nightmare for health reform law

Business Insurance reports:

“It looks like the Obama administration may have another big legal headache in defending the Affordable Care Act.

A Republican-appointed judge’s comments Thursday suggest that it’s very possible the administration will have to fight a new high-stakes court battle to save another key affordable coverage feature of the law.

During a preliminary court hearing in Washington, U.S. District Judge Rosemary Collyer fired a series of sharply skeptical questions at the administration’s lawyer who was urging her to dismiss an anti-ACA lawsuit filed by House Republicans. She was far less aggressive in questioning the plaintiffs’ lawyer. And she made what was apparently a joke about impeaching the president.

The unprecedented suit challenges the administration’s decision to delay the ACA’s employer mandate and to use Treasury funds that were not appropriated by Congress to pay for $175 billion in subsidies for low-income exchange plan members to help them with out-of-pocket costs. Congressional Republicans refused to appropriate money to fund those subsidies.

Without those subsidies, which are in addition to the law’s premium subsidies, many exchange enrollees likely would not be able to afford health care because of high deductibles and coinsurance. Exchange plans still would be required by the ACA to reduce cost sharing, but doing so would not be financially viable for the insurers, potentially disrupting the exchange market.

The new legal challenge comes as everyone tensely awaits the Supreme Court’s decision in King v. Burwell, expected in late June, which could eliminate premium subsidies in up to 37 states that are using the federal insurance exchange. The new case creates the possibility that even if the high court upholds the premium subsidies, the cost-sharing subsidies for people in silver-tier plans with incomes up to 250% of the federal poverty level still could be in peril.

The hearing Thursday was on the issue of whether House Republicans suffered an actual harm from the Obama administration’s actions and therefore have standing to sue. Many legal experts say the plaintiffs will have trouble proving they have standing because the Supreme Court previously has said members of Congress can’t use the courts to challenge laws they don’t like unless those laws are harming them in some concrete way.

But according to several news accounts, Judge Collyer, who was nominated by President George W. Bush, more aggressively challenged administration lawyer Joel McElvain than she did the lawyer for the plaintiffs, Jonathan Turley of George Washington University. When Mr. McElvain argued that the issue is a “generalized” dispute and there is no particular harm to the House, Judge Collyer interrupted to ask, “You don’t really think that?”

“I have a very hard time taking that statement seriously,” she added.

At other points she chided Mr. McElvain, saying “You are dodging my question” and “You may disagree with me but I happen to be the judge.”

Mr. McElvain repeatedly tried to get back to the standing issue, but Judge Collyer kept returning to the substantive issues of the case. “So it is your position that if the House of Representatives affirmatively voted not to fund something … then that vote can be ignored by the administration, because after all no one can sue them?” she asked.

When Mr. McElvain responded that the case’s merits were not at issue in the hearing, the judge replied, “I want you to explain… why it’s not an insult to the Constitution.” Later she said: “You can’t just shake your head and not deal with the question.”

Mr. Turley, the lawyer for the plaintiffs, argued that if the lawsuit was dismissed, that would take away lawmakers’ ability to prevent future executive branch overreach. Judge Collyer later responded: “What about impeachment, is that an option?” She added, “I don’t want to suggest… Don’t anybody write that down.”

The judge said she had not made up on her mind on the standing issue — even though at times it sounded like she had.

If Judge Collyer grants standing and the case goes to a full trial on the merits, that would be a serious legal setback for the administration. Some legal experts believe the case could be close. In contrast, many say it’s not a close case on standing. But then, a majority of legal experts did not expect the Supreme Court to accept the King v. Burwell case either.

“The precedents are pretty clear that members of Congress do not have standing to sue the executive,” said Tim Jost, a Washington & Lee University law professor and authority on the ACA who supports the law. “If they did, the litigation would be endless, as every time a president did something a member disagreed with, the courts would be dragged in.”

“I hope Judge Collyer sticks with the established law on standing rather than striking out on her own,” he added. “The seriousness of this litigation cannot be overstated.”