GOP sued to stop some Obamacare funds, now set to spend under Trump

Fate of Obamacare faces legislative realities
Fate of Obamacare faces legislative realities

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Story highlights

  • Republicans challenged some Obamacare payments in court and won, but now are faced with making those same payments
  • They must update the court next Tuesday

Washington (CNN)Three years ago, House Republicans sued the Obama White House to block the administration from diverting funds to pay health care insurers to help cover low-income Americans.

They won the lawsuit and now control the White House and Congress. But that means they're facing a deadline to determine how they will do what they sued to stop: spending taxpayer money to insurers to subsidize insurance for low-income Americans.
Republican leaders are acknowledging that in order to keep the Obamacare marketplace from collapsing on their watch, they will need to allocate billions of dollars in what are known as cost-sharing reduction payments. They also have to act fast -- they need to update the judge in the lawsuit Tuesday — and figure out how to placate insurers and skeptical conservatives.
The payments are at the center of a contentious 2014 lawsuit the House filed against the Obama administration. Back then, Republicans were trying to gut the Affordable Care Act in whatever way they could with Obama still in the White House. The House argued that that the cost-sharing reduction payments were illegal because Congress --- not the executive branch -- had control over allocating spending, and Congress had not appropriated the money.
Now that they're on the verge of repealing Obamacare, Republican members are cautious about any disruptions that could hit the marketplace on their watch.
House Energy and Commerce Committee Chairman Greg Walden said that he's long believed the payments needed to be preserved now that Republicans are on the brink of repealing Obamacare, but sees no hypocrisy in House Republicans allocating the money now despite the 2014 lawsuit.
"Our argument in the courts was that the President never had the authority to begin that process or expend that money and the one decision that has been rendered was in our favor," he said. "The principle there is separation of powers, constitutional authorities that Congress appropriates the money."
One of the issues with cost-sharing reductions is that if they aren't paid, insurers can leave the Obamacare marketplace. Without many choices, that would drive up costs for consumers and likely have devastating political consequences Republicans. So Republicans find themselves in a tough spot: To keep insurers from leaving the marketplace, they will be forced to spend money they never wanted to spend.
"I said early on that I felt it was important and the insurers made it clear that if they didn't get the CSR payments, they probably would pull out of the market early," said Walden, an Oregon Republican.
Republican members argue that as long as they appropriate the money there is no problem. They haven't agreed when or how that will happen, however.
"We have to deal with CSRs because if we don't, if it's not funded, then insurance companies can immediately cancel plans so we have to deal with it," said Rep. Brett Guthrie, R-Kentucky, the vice chair for the subcommittee on Health. "We have to deal with it or people could lose plans immediately.
But Rep. Kevin Brady, chairman of the House Ways and Means Committee, said no decision had been made yet.
That is in part because some conservatives in the House would be outraged if Republicans allocated money to incentivize insurers to stay in the Obamacare marketplace.
Some conservatives say that allocating the money at all would be disingenuous after members railed against the payments for years. They argue that if the market collapsed because the House refused to appropriate CSR payments that would not be the Republicans' fault.
"The marketplace collapsed when Barack Obama walked through the doors of the White House," said Rep. Trent Franks, R-Arizona.
But Rep. Mark Meadows of North Carolina, the chairman of the House Freedom Caucus, acknowledged he's OK with some additional payments so long as Obamacare is being repealed.
"A number of us want a smooth transition and part of those cost-sharing features whether it'is cost sharing or reinsurance, which in a year-over-year basis is very substantial and something that we would oppose," he said. "We also understand that in a transition period when you are looking at truly phasing out the Affordable Care Act and putting in a replacement that creating more uncertainty in the marketplace is not necessarily the most prudent of ventures."