Constitutional Lawyer: Yes, Obama’s Affordable Care Act Subsidy Provision Was Illegal

Matt Vespa
|
Posted: Oct 16, 2017 7:30 PM
Constitutional Lawyer: Yes, Obama’s Affordable Care Act Subsidy Provision Was Illegal

There’s are a lot of liberals frothing at the mouth over the Trump administration’s decision to end the unconstitutional subsidies to insurance companies under the Affordable Care Act last week. The subsidies were given to insurance companies to help offset costs from lower-income individuals concerning deductibles and other out-of-pocket expenses. It's meant to prevent premium spikes. And the termination of this subsidy is not just a conservative view or action item, by the way. It’s the opinion of the courts, as the LA Times reported back in May of 2016–it’s unconstitutional:

House Republicans won Round 2 in a potentially historic lawsuit Thursday when a federal judge declared the Obama administration was unconstitutionally spending money to subsidize health insurers without obtaining an appropriation from Congress.

Last year, U.S. District Court Judge Rosemary Collyer broke new ground by ruling the GOP-controlled House of  Representatives had legal standing to sue the president over how he was enforcing his signature healthcare law.

On Thursday, she ruled the administration is violating a provision of the law by paying promised reimbursements to health insurers who provide coverage at reduced costs to low-income Americans.

The judge's ruling, while a setback for the administration, was put on hold immediately and stands a good chance of being overturned on appeal.

Well, it prompted 18 states to sue the Trump administration over this decision. As with the issue over the Deferred Action for Childhood Arrivals program on immigration, it's another example of executive overreach under Obama, bypassing Congress on issues that only the legislative branch can legally resolve. Josh Blackman elaborated on this subsidy provision in National Review back in July:

In 2014, a federal judge concluded that with the so-called OPM fix, the “executive branch has rewritten a key provision of the ACA so as to render it essentially meaningless in order to save members of Congress and their staffs.” Allowing the administration to rewrite the law, he wrote, “would be a violation of Article I of the Constitution, which reposes the lawmaking power in the legislative branch.” However, because the plaintiffs in the lawsuit (Senator Ron Johnson and one of his staffers) were not personally injured by OPM’s policy — indeed they benefited — the case was dismissed for lack of standing. While the Obama administration was content to make these illegal payments, the Trump administration should halt them.

Congress is not the only beneficiary of such illegal largess. The ACA employed two strategies to make health insurance more affordable. Section 1401 of the law provides for the payment of subsidies to consumers to reduce premiums. Section 1402 provides payments to insurers to offset certain “cost sharing” fees, such as deductibles and co-pays. But while the ACA funds the subsidies under Section 1401 with a permanent appropriation, to date, Congress has not provided an annual appropriation for the cost-sharing subsidies under Section 1402.

Once again, where Congress would not act, President Obama did so unilaterally. The executive branch pretended that the ACA had actually funded Section 1402 all along, and it paid billions of dollars to insurers. Once again, Mr. Trump is exactly right that this is a “BAILOUT.” And, once again, the payments are a violation of the separation of powers.

Now, we have Jonathan Turley, a constitutional scholar at the George Washington University Law School, reiterating the point that the Obamacare subsidy provision was unconstitutional with Fox News’ Bret Baier last Friday. Turley added that the court ruling made it clear that you have to play within the confines of the U.S. Constitution, and that even benevolent reasons are not good enough to usurp the rule of law  (via RCP):


BRET BAIER, SPECIAL REPORT: Can the president stop Obamacare subsidies? ... You're also the lead counsel for the U.S. House of Representatives in the challenge to the actions by the Obama administration to set up these subsidies in a court case that ended in victory. So, this is a Constitutional move.

JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY LAW PROFESSOR: The original order that has just been rescinded was unconstitutional by finding of a federal court. The court found it not only violated Article One of the Constitution, it violated the health care law itself. Because Congress had the ability to grant subsidies under the federal law but it chosen not to. In fact, the administration had come to Congress and asked for this money and Congress said no. And then the president say alright, I'll just order it directly from the Treasury. Well, you can't do that. The defining power of Congress is the power of the purse. And the federal judge issued a historic ruling and said this is wrong, you can't violate the Constitution no matter what your motivations are, no matter what you're complaining about with Congress, you have to play within the rules of the Constitution.