END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

Time: D H M S

Like the villian in horror movie sequels, King v. Burwell simply refuses to die.

I posted about the House v. Burwell federal lawsuit (aka "The Return of the King...vs. Burwell", or "King v. Burwell Part 2") twice before: First in July (only a week after the Supreme Court's King vs. Burwell decision), and then again in early September:

Nick Bagley, a University of Michigan law professor, said it's not an "earth shattering surprise" that the court is allowing part of the lawsuit to go forward.

But the judge also opened a pathway to the part of the lawsuit that could be most damaging to the law, he said.

"Holding that the administration lacks the authority to cover the cost of those reductions would create a real mess on the ground," Bagley said.

"It inserts the court into the middle of a political food fight," he said.

To be serious, House v. Burwell isn't the same as King v. Burwell; it's a different case, brought by a different plaintiff (outgoing Republican House Speaker John Boehner, to be precise), and is targeting a different type of ACA financial assistance (Cost Sharing Reduction, as opposed to the Advance Premium Tax Credits). The basis for the case is different this time as well, and the stakes aren't as high (although they're high enough; see below). However, it sure as hell feels like a rehash of KvB.

Anyway, the wheels of the judicial system have continued to chug along, and there's been another development which, once again, is bad news for the administration (as well as people like myself who, apparently, are going to have to keep writing about this case for another year or so):

On October 19, 2015, Judge Rosemary Collyer of the federal district court for the District of Columbia denied the government’s request for an expedited appeal in House v. Burwell. This means that Judge Collyer is going to decide the merits of the House’s claim before an appellate court has the opportunity to decide whether she has the constitutional authority to do so. This could have a destabilizing effect on insurance markets.

Timothy Jost goes on to recap the suit:

The House of Representatives brought this lawsuit challenging both the Obama administration’s delay of the Affordable Care Act’s employer mandate and its reimbursement of health insurers for cost-sharing reductions for low-income enrollees in the absence of a specific line-item appropriation to cover the reimbursements.

Collyer scrapped part of the House's lawsuit (about the delay of the employer mandate, which really was a pretty stupid thing to sue over given that the GOP hates the mandate anyway), but said that the CSR reimbursement portion of the suit could go forward...and with the latest development, it looks like it's full steam ahead for the case.

...Judge Collyer’s decision means that the Court of Appeals will only get a chance to decide the very important question of whether a federal court has any business intervening in a dispute between Congress and the administration over the expenditure of federal funds after Judge Collyer has in fact intervened in this dispute. Her decision also raises serious questions as to the continued funding of cost-sharing reduction payments, which substantially reduce the cost of health care for over half of ACA premium tax credit recipient, just days before the 2016 open enrollment period begins.

If Judge Collyer rules that insurers cannot be reimbursed for the cost-sharing reductions they are required to provide to low-income enrollees unless Congress enacts a specific appropriation, insurers would face substantial costs which are not covered by their current premiums. This could introduce serious instability into insurance markets, particularly after the Obama administration’s recent announcement that marketplace insurers would only receive a fraction of the “risk corridor” payments—designed to compensate insurers for higher-than-expected costs in an unfamiliar market—that they are owed because of limits that Congress had placed on risk corridor payments for this year.

And just how much would those potential "substantial costs" add up to? Well, I took a crack at the numbers on this about a month ago:

OK, so the good news is that the enrollees currently receiving CSR credits would continue to receive them, and thus would not be directly impacted; it's the insurance companies who would be screwed here, right? Well...

Or would they? Even without an appropriation, health plans still have a statutory entitlement to cost-sharing payments. What that means in non-legalese is that Congress has promised to pay them money—whether or not there’s an appropriation. And health plans can sue the government in the Court of Federal Claims to make good on that promise. (Congress has undeniably appropriated the money to pay court judgments.)

So the question isn’t whether the government will pay the cost-sharing reductions. It’s when. If the government is right, Treasury can make pay health plans on a “periodic and timely” basis. If the House is right, health plans have to file thousands upon thousands of duplicative lawsuits to get the money.

That’d be bonkers, of course. Forcing health plans to pursue expensive and time-consuming litigation to recover what they’re owed doesn’t help anyone. The plans will just pass on the costs of the litigation, delay, and uncertainty to their customers.

Yep: The insurance companies would most likely simply jack up their premiums to their enrollees enrollees to make up the difference as an increased "cost of doing business" (and in this case they'd have a solid justification for doing so).

So, what would that mean to the enrollees?

At the time, I crunched the numbers and determined that you'd be talking about roughly $5 billion divided by 17 million people (everyone in ACA-complliant individual policies, whether on or off the exchanges), which in turn broke out to around $300 per year, or $25 per month.

However, that was for 2015. Assuming House v. Burwell ends up going all the way to the Supreme Court, it's very likely that a plaintiff win (remember: The plaintiff in this case is the House Republican caucus itself, not a third-party like the CATO Institute or the patsies that they dredged up to act as "plaintiffs" for King v. Burwell) wouldn't have any actual real-world impact until 2017 at the earliest. At that point, both the dollar amount and the number of people impacted will have increased, though the dollars per enrollee would likely have only gone up by $100/year or so.

In addition, according to Jed Graham, several hundred thousand people in Minnesota and New York who will presumably be enrolled in the ACA-funded "Basic Health Plans" in those two states would have the rug yanked out from under them.

Stay tuned...