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Speaker 1: It's a House Republicans. It seemed like a good idea

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Speaker 1: at the time when they sued to challenge a crucial

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Speaker 1: aspect of Obamacare. Lawsuit challenged the cost sharing payments that

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Speaker 1: compensate insurers for the subsidies they must provide some people

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Speaker 1: under the healthcare law. But with that old Trump in

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Speaker 1: the White House, the lawsuit has become a complication in

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Speaker 1: Republican efforts to dismantle Obamacare. The Trumps Trump administration is

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Speaker 1: now the defendant in the suit, and it's and it's

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Speaker 1: still not clear how it will handle the case. This week,

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Speaker 1: the administration and House Republicans sought to put the case

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Speaker 1: on hold for another three months. Meanwhile, a group of

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Speaker 1: Democratic state attorneys general are seeking to intervene and defend

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Speaker 1: the payments. With us to try to make sense of

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Speaker 1: all this are Josh Blackman, he's a professor at South

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Speaker 1: Texas College Law and the author of a book on

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Speaker 1: the legal fight over Obamacare. And Kristin Underhill, the professor

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Speaker 1: at Columbia Law School with an expertise in health law.

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Speaker 1: Welcome to you both, um, Kristen, let me start with you.

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Speaker 1: Can you just tell us why these cost sharing payments

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Speaker 1: are important in the first place, Yes so. UM. Under

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Speaker 1: the original version of the Affordable Care Act UM, insurers

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Speaker 1: on the market who ensure people who enroll in silver

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Speaker 1: plans have to drop the cost sharing requirements for people

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Speaker 1: enrolled in those plans to certain levels, which means that

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Speaker 1: the insurer would ordinarily internalize more of the costs of

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Speaker 1: care um SO. In order to provide some security for

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Speaker 1: insurers who are entering this market UM, the Affordable Care

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Speaker 1: Act had UH several different types of insurance, several different

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Speaker 1: types of assistance for insurers, and one of these was

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Speaker 1: the cost Sharing Reduction Payments um SO. Currently, about six

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Speaker 1: to seven million people who are enrolled and qualified health

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Speaker 1: plans UM benefit to some extent from these cost sharing

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Speaker 1: reduction payments UM and they're they're estimated to be about

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Speaker 1: seven billion dollars this year, and they're really key protection

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Speaker 1: for insurers that undertake these obligations on the individual market. Josh,

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Speaker 1: what has the Trump administration said about what it wants

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Speaker 1: to do with these cost sharing payments? Much like with

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Speaker 1: most things and shrub administration, it depends when you ask

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Speaker 1: at some junctures, Trumpet said he will continue making the

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Speaker 1: payments at other junctures, he's hinted that he may not

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Speaker 1: make the payments, and at other junctures he said he'll

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Speaker 1: stop making the payments to let Obamacare unravel. Um. That's

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Speaker 1: the position of the presidents himself in court. The government

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Speaker 1: has been far more circumspect, and they said, well, uh,

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Speaker 1: we're not going to tell you exactly what our intentions are,

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Speaker 1: but we want the court to put this matter on hold,

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Speaker 1: so if there's any legislative action that occurs, we can

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Speaker 1: revisit this. There's no sense reaching a difficult legal question

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Speaker 1: if Congress will amend the bill. Um. The difficulty is

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Speaker 1: that the insurance companies, as far as I can tell,

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Speaker 1: have been getting the money all along, and they're worried

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Speaker 1: that at some arbitrary point the money will stop. And Kristen,

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Speaker 1: what would happen if that money would stop? What would

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Speaker 1: be the impact on healthcare coverage in America? There will

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Speaker 1: be a few different impacts. Um. So if insurance companies

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Speaker 1: stay in the market, they still have these obligations to

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Speaker 1: provide low excuse me low levels of cost sharing, and

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Speaker 1: so that money has to come from somewhere, and so

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Speaker 1: the most likely place that is going to come from

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Speaker 1: is increasing premiums um so. Currently I'm looking at three

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Speaker 1: different estimates here, and it looks like premiums may increase

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Speaker 1: by twenty to twenty cent um across the board. And

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Speaker 1: this may not just be on the exchanges. It may

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Speaker 1: be premiums kind of among all all different types of

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Speaker 1: plans that insurers offer um so, premiums may go up.

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Speaker 1: And if that happens, actually paradoxically, um the advanced premium

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Speaker 1: tax credits that are available for consumers on the exchanges

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Speaker 1: will also have to go up because they are pegged

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Speaker 1: to the premium costs on these plans um so, it

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Speaker 1: would in fact cost the government money to stop making

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Speaker 1: the cost sharing reduction payments. Um. People would also be

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Speaker 1: more likely to opt out of demandate due to hardship

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Speaker 1: exemptions if premiums rise um which would further under i'm

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Speaker 1: the effectiveness of the individual mandate and would undermine the

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Speaker 1: markets um so. But you know, the much more immediate

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Speaker 1: and concern and consequence would be that insurers are going

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Speaker 1: to leave the market entirely, and some have threatened to

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Speaker 1: do that if they don't have some certainty about the

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Speaker 1: coshering reduction payments. Josh given all that, and given the

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Speaker 1: basic Trump administration position, which is that Obamacare should be

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Speaker 1: repealed and replaced, is there an obvious good option for

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Speaker 1: the Trump administration or is it just something of a

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Speaker 1: dilemma about how to handle this lawsuit. So there's an

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Speaker 1: element here we haven't talked about, which is the actual law.

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Speaker 1: It's my first that that pleas into it because Attorney

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Speaker 1: General Sessions, his position is largely informed by the fact

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Speaker 1: the payment of these subsidies are illegal. Um, he said

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Speaker 1: that as much many times. So it's not about whether

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Speaker 1: you want to keep making these payments as a matter

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Speaker 1: of policies, whether they're lawful. So I think there's a

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Speaker 1: huge tug of war. And in the one side you

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Speaker 1: have the Attorney General who says these payments were illegal.

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Speaker 1: On the other side you have people like Steve Banners,

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Speaker 1: they let this thing burn. And then you have the

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Speaker 1: other wing, you know, the Krishna wing, whatever that's worth,

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Speaker 1: who's saying, no, we need to save healthcare for everyone.

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Speaker 1: So it's just odd try lemma where all these things

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Speaker 1: are tugging chump in different directions, and so far, the

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Speaker 1: best that they've come up with is give us time.

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Speaker 1: Let the House and Senate figure something out, but don't

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Speaker 1: go ahead with this litigation. You're listening to Bloomberg Law

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Speaker 1: and we are talking about the lingering court fight over Obamacare.

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Speaker 1: New developments in the case this week, originally filed by

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Speaker 1: House Republicans against the Obama administration. Our guests are Kristin Underhill,

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Speaker 1: who's a professor at Columbia Law School, and Josh Blackman,

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Speaker 1: author of the book Unraveled, which has told the story

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Speaker 1: about the legal fight of Obamacare so far. You may

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Speaker 1: need a sequel to that book, Josh Um Kristen Um.

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Speaker 1: Josh pointed out a moment ago that we hadn't really

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Speaker 1: talked much about the law. Tell us about the legal

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Speaker 1: claim in this case. What what are the grounds that

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Speaker 1: the House Republicans are raising in what chances do you

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Speaker 1: think it has of success if if a court were

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Speaker 1: if or to go ultimately to a ruling on the

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Speaker 1: merits by the appeals court considering it. Yes, Well, there's

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Speaker 1: two different issues at stake in this case, and the

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Speaker 1: first was the kind of the the novel finding that the

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Speaker 1: House has one Chamber of Congress would have standing to

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Speaker 1: sue the administration based on uses of funds that weren't

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Speaker 1: specifically appropriated for the purpose they're being used for. UM.

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Speaker 1: So up until this case in the d C in

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Speaker 1: the District of d C, UM that that precise issue

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Speaker 1: hadn't ever been decided. And so this is the first

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Speaker 1: case to find that that the House couldn't fact to

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Speaker 1: based on the use of unappropriated funds here. UM. So

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Speaker 1: that was one of the key issues on appeal and

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Speaker 1: may in the long term be more h could could

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Speaker 1: unleash more litigation in the long term, depending on whether

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Speaker 1: the President and the House are of different parties UM.

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Speaker 1: So that would be a big question on appeal and

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Speaker 1: I think depending on UM it was initially expected to

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Speaker 1: be reversed on appeal, but who knows, who knows what

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Speaker 1: would happen with that UM. And then the other issue

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Speaker 1: is whether or not there was a specific funding allocation

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Speaker 1: for the cost sharing reduction payments UM. The Secretary of

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Speaker 1: HHS Burwell back the time UM said that it was

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Speaker 1: included in the appropriations for Advanced Premium Tax Credits UM,

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Speaker 1: the tax subsidies that an individual policy holders received under

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Speaker 1: the under the law UM, but that was dismissed. UM.

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Speaker 1: That argument was was very much criticized in the district

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Speaker 1: of d C. And so we were. It was it

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Speaker 1: was an open question where where it would go on

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Speaker 1: the on the DC circuit. Josh Federal District Judge agreed

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Speaker 1: with the House members who sued, Um, did you find

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Speaker 1: that ruling convincing? But I did. In fact, you mentioned

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Speaker 1: to write a sequel unraveled as the second book I've

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Speaker 1: read about Obamacare, I'm actually working in a third book.

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Speaker 1: We would probably come out in so called undone. UM.

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Speaker 1: The district court decision I found extremely persuasive. Then, let

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Speaker 1: me give you a little bit background about this bill. UM.

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Speaker 1: There are two types of subsidies at issue. UM. One

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Speaker 1: was subject to us called a permanent appropriation. That is,

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Speaker 1: Congress doesn't need to renew it every year. If there's

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Speaker 1: a government shut down, these payments continue. The other is

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Speaker 1: what subject is subject to. It's called an annual appropriation

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Speaker 1: that this Congress has to every year create a new appropriation.

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Speaker 1: Now here's what happened during the time this slow is

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Speaker 1: being implemented. The sequester was in effect, which meant that

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Speaker 1: for permanent appropriations all the money would be spent, but

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Speaker 1: for annual appropriations there would be a ten percent cut.

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Speaker 1: That is, the insurance companies would only get nine cents

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Speaker 1: uh ninety cents out of the dollar for their payments.

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Speaker 1: So the Obama administration actually requested that Congress not appropriate

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Speaker 1: money for the insurance companies for these subsidies, and the

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Speaker 1: camp with this convoluted argument that really this other pile

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Speaker 1: of money was sufficient to pay for them. Uh, this

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Speaker 1: was merely a means we've made a sequester. But they

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Speaker 1: got caught. The failure to actually appropriate money lies with

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Speaker 1: the Obama administration, and now they're trying to argue that

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Speaker 1: this other pot of money, which was permanent, covers it.

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Speaker 1: It doesn't. Uh. This is a fairly black litter violation

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Speaker 1: of appropriations law. What makes this case unique, As Kristen

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Speaker 1: mentioned a moment ago, it had its being resolved in

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Speaker 1: the courts, This was the first time that such a

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Speaker 1: student has ever been successfully brought by one branch of Congress. Kristen,

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Speaker 1: there is a new motion files I believe it was

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Speaker 1: yesterday by a fifteen state attorney attorneys general and the

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Speaker 1: District of Columbia seeking to intervene in the case to

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Speaker 1: help defend the cost sharing payments. Do you see that

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Speaker 1: as a as a well. First of all, is that

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Speaker 1: likely to succeed and if so, could that have any

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Speaker 1: significant impact on on the way the case comes out? Yes,

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Speaker 1: I there, So there's two ways that they could succeed

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Speaker 1: in intervening. And before moving on to that, I should

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Speaker 1: note that this is the second motion to intervene in

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Speaker 1: the case UM. Back in January, several policyholders individuals who

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Speaker 1: had enrolled and qualified health plans actually filed a motion

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Speaker 1: to intervene UM saying that the price HHS would no

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Speaker 1: longer adequately represent their interests UM and that after after

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Speaker 1: the change of administration, and that was rejected back in January. UM.

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Speaker 1: But now that's right, we do have fifteen UH states

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Speaker 1: in the districts of Columbia UM trying to file a

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Speaker 1: similar emotion based on the injuries that are occurring to

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Speaker 1: the states with the uncertainty of managing these individual markets UM.

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Speaker 1: The so some of the consequences that I've already mentioned

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Speaker 1: above are are coming to pass now UM as insurers

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Speaker 1: are trying to file multiple sets of papers trying to

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Speaker 1: manage whether or not they'll be on the exchanges. And

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Speaker 1: so they could succeed as as of rights, having a

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Speaker 1: right to intervene in the appeal um if their emotion

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Speaker 1: is timely, if they can show legally protected interest in

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Speaker 1: the action um and showing that no one in the case,

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Speaker 1: no existing party is adequately representing their interest. They may

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Speaker 1: also succeed, however, as a per miss of intervention, because

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Speaker 1: they they do have claims that are that are adjacent

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Speaker 1: to the issue of the issues in the case, and

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Speaker 1: intervening won't jildie or prejudice the adjudication of the of

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Speaker 1: the other rights stake in the case. And so I

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Speaker 1: am I am hopeful that the motion to intervene would

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Speaker 1: be granted and that they could take up this this

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Speaker 1: piece of the appeal. Josh, we have all of about

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Speaker 1: twenty seconds left, But I do want to ask you

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Speaker 1: one thing. Democrats have criticized the Trump administration for using

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Speaker 1: these costuing payments as a bargaining chip. Do you think

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Speaker 1: that's a fair fair criticism? This is how government works,

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Speaker 1: right when Congress fails to appropriate money, the president can

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Speaker 1: decide not to spend it. We have here as a

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Speaker 1: violation the law, and even people who defend the government

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Speaker 1: understanding UH, generally think that they're breaking the law. So

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Speaker 1: I see, maybe Trump seos. This is a bargaining chip.

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Speaker 1: I see they trying to prove all the law. Okay,

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Speaker 1: I want to thank Josh Blackman and Kristin on your Hill,

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Speaker 1: our guest talking about, uh, the legal fight over Obamacare