“I am Yahweh; that is My Name! I will not give My glory to anyone else, nor share My praise with carved idols.” (Isaiah 42: 8)
Getting Up to Speed on President Trump’s Decision to Stop Obamacare Reimbursement Payments
A federal judge in California on Wednesday denied a request from 19 attorneys general across the country to force the Trump administration to resume funding of cost-sharing payments under the Affordable Care Act.
The ruling leaves intact President Trump’s decision earlier this month to immediately end the payments that reimburse insurers for discounts the law requires them to give lower-income customers with health plans through ACA marketplaces. The attorneys general, from 18 states and the District, were seeking a temporary order that would have maintained the funding while the rest of the case is decided.
In his decision, Judge Vince Chhabria of the U.S. District Court for the Northern District of California wrote that resuming the payments to insurers “would be counterproductive.”
Chhabria pointed out that most states’ insurance regulators had already prepared for a possible end to the money, by allowing companies to charge higher rates for the coming year. “Although you wouldn’t know it from reading the states’ papers in this lawsuit,” he wrote, “the truth is that most state regulators have devised responses.”
- See “Why did Trump make the Obamacare reimbursement payments he claims are illegal and unconstitutional?”:
The legal battle over billions of dollars in cost-sharing reimbursements due to insurers under the Affordable Care Act underscores the wisdom of the line from Charles Dickens’ “Oliver Twist” that “the law is a ass.”
Boiled down to its essence, the dispute is this: The ACA requires insurers to reduce deductibles and co-pays for low-income buyers on the individual insurance market, and it requires the government to reimburse the insurers for those reductions; but because the ACA didn’t specifically provide an appropriation for the payments, congressional Republicans have maintained that they can’t be made.
It’s a sad sign of our times that the constitutionality of any given government action is now seen as a wholly secondary consideration, subordinate to politics and arguments about politics. And so it is with Donald Trump’s necessary decision to halt federal payments of cost-sharing subsidies to insurance companies.
For example, here’s how the Washington Post led off its coverage of Trump’s decision: “President Trump is throwing a bomb into the insurance marketplaces created under the Affordable Care Act, choosing to end critical payments to health insurers that help millions of lower-income Americans afford coverage.”
The New York Times headlined its article with the declaration “Trump to scrap critical health care subsidies, hitting Obamacare again.” But that’s not exactly right. In reality, the Constitution scraps Obama’s subsidies. They were never lawful because Congress never appropriated the money.
Here’s the legal background. Section 1402 of Obamacare requires insurance companies to reduce deductibles, copayments, and other similar payments for lower-income consumers and then says that the federal government will reimburse the insurers for their losses. Specifically, insurers will notify the federal government of the amount of their price reductions, and the government will “make periodic and timely payments to the insurer equal to the value of the reductions.”
Clear enough? There was just one problem. Unlike other provisions of Obamacare covering other forms of subsidies (for example, Section 1401, which funded subsidies that helped cover insurance premiums), the law didn’t specifically appropriate any money to fund these payments.
This isn’t a small thing. In fact, it implicates the core constitutional structure of our government. Article I, Section 9, of the Constitution unambiguously declares that “no Money shall be drawn from the Treasury, but in Consequence of Appropriations made by law.” The most relevant federal appropriations statute states quite clearly that “a law may be construed to make an appropriation out of the Treasury . . . only if the law specifically states that an appropriation is made.”
Facts are Stubborn Things
Contrary to California federal Judge Chhabria’s observation that resuming payments to insurers “would be counterproductive”, those payments are unconstitutional, because the Affordable Care Act (ACA) didn’t appropriate money for them.
Keep in mind that when the ACA was passed, the Democrat Party controlled the House and the Senate. Even so, lawmakers did not include a provision in the law that would require the federal government to subsidize lower-income Americans who were forced to purchase health insurance.
President Obama decided to order the subsidies anyway. He did not have the constitutional authority to do that.
The quote below from Jonathan Turley, a George Washington University law professor, explains the predicament well:
“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 chose not to. In fact, the administration had come to Congress and asked for this money and Congress said no. And then the president said 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.”
In a nutshell, Congressional Republicans did not create this problem. Neither did President Trump.
All of the blame for the Obamacare fiasco lies on Congressional Democrats who could have included a subsidies provision in the ACA but didn’t and on President Obama who ordered the subsidies even though they were not authorized by the ACA.
We have three branches of government. Congress appropriates money, and Congress didn’t appropriate any money for ACA subsidies. The president must abide by the law. Even so, Obama ordered the treasury to provide ACA subsidies.
ACA subsidies are unconstitutional. That’s not a matter of opinion. That’s what the federal courts said a long time ago. President Trump simply applied the law.
The chickens are coming home to roost. They always do.
“The glory which You have given Me I have given to them, that they may be one, just as We are one; I in them and You in Me, that they may be perfected in unity, so that the world may know that You sent Me, and loved them, even as You have loved Me. Father, I desire that they also, whom You have given Me, be with Me where I am, so that they may see My glory which You have given Me, for You loved Me before the foundation of the world.” (John 17: 22-24)
See “His Name is Yahweh”.