Health Reform WK-EDGE Court puts cost-sharing appeal on hold, awaits possible Trump policy
Tuesday, December 13, 2016

Court puts cost-sharing appeal on hold, awaits possible Trump policy

By Kayla R. Bryant, J.D.

The U.S. Court of Appeals for the District of Columbia granted the U.S. House of Representatives’ motion to hold the appeal over cost-sharing reduction funding in abeyance until February 21, 2017. By that time, the parties must file motions to direct the rest of the proceedings, which the House believes may look very different from the current state of the litigation (U.S. House of Representatives v. Burwell, December 5, 2016, per curiam).

Appropriated funds. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) provided cost-sharing reductions under section 1402 in order to make coverage more affordable for consumers. Insurers must provide these reductions in order to participate in the marketplace, but section 1402 does not establish a process for providing refunds to the insurers.

In addition to the cost-sharing reduction provision, section 1401 implemented premium tax credits as another means of financial assistance for consumers. The House agrees with HHS that these credits are funded under the Internal Revenue Code (IRC) (31 U.S.C. §1324). The HHS Secretaries have taken the position that sections 1401 and 1402 of the ACA are so integrated that cost-sharing reductions funding is appropriated along with the tax credits. However, the House successfully argued before the district court that the reductions cannot be considered appropriated under the IRC because they do not reduce a taxpayer’s liability (see Court sides with House Republicans, finds no appropriation for cost-sharing reductions, May 18, 2016).

Appeal. Although the district court granted summary judgment for the House and enjoined further cost sharing reduction reimbursements to insurers, the injunction was stayed pending appeal. The House’s motion requesting briefing to be held in abeyance stated that the House and President-elect Trump’s transition team had discussed resolution options for the litigation that would take effect, if at all, after the inauguration on January 20, 2017. The motion also pointed out that there was "at least a significant possibility" of the new administration enacting policy change that would affect the scope of the issues under review. The House’s responsive brief was originally due December 23, 2016, and Burwell’s reply brief was due January 19, 2017.

The case is No. 16-5202.

Attorneys: Thomas G. Hungar for the United States House of Representatives. Alisa B. Klein, U.S. Department of Justice, for Sylvia M. Burwell.

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