Ryan: We’re Not Dropping O’Care Lawsuit, But Subsidies Will Continue

Speaker of the House Paul Ryan (R-WI) on Thursday signaled that Republicans have no intention of dropping an Obamacare-related lawsuit that could cripple the individual health insurance market, but he confirmed that the subsidies to insurers at the heart of the legal challenge would continue while the lawsuit proceeds.

“We don’t want to drop the lawsuit because we believe in the separation of powers. We believe in Congress retaining its lawmaking power,” Ryan said at a press conference Thursday, while adding that the Trump administration is “exercising their discretion” in continuing the subsidies to insurers.

The lawsuit, brought by the House GOP against the Obama administration in 2014, concerns subsidies known as cost-sharing reduction payments that reimburse insurers for keeping out-of-pocket costs down for low income consumers, as mandated by the Affordable Care Act. Republicans objected to the subsidies because they were not explicitly appropriated by Congress, so the administration was using Treasury Department funds.

A district court judge sided with the Republicans last year but stayed the decision while the administration appealed it. The case is now at the U.S. Court of the Appeals for the D.C. Circuit, where it has been paused until May for the parties to figure out their next move, now that the Trump administration has taken over.

“I don’t know when the lawsuit’s going to get wrapped up,” Ryan said. “I think it goes into May. If we end up going to court, that could take us months.”

For insurers, who will be filing their intentions for the 2018 plan year in the months to come, the payments are crucial, and it is believed that their federal contract would allow them to exit the individual marketplace immediately if the subsidies were stopped. At the very least, it is expected that ending the subsidies would cause premiums to increase dramatically.

Now that the GOP’s Obamacare repeal effort has stalled, some key Republicans on the House side have indicated that they are interested in appropriating the subsidies, however Sen. Roy Blunt (R-MO), the Republican who oversees Health and Human Services appropriations in the upper chamber, said he did not think his subcommittee would appropriate them this year.

“While the lawsuit is being litigated, then the administration funds these benefits. That’s how they’ve been doing it, and I don’t see any change in that,” Ryan said Thursday.

Update: The top trade group for the insurance industry responded to Ryan’s comments by calling for policymakers to do more to ensure that the subsidies will continue for insurers in order to stabilize the individual market.

“The CSR payments have continued throughout the lawsuit continuing through appeals,” Kristine Grow, a spokeswoman for America’s Health Insurance Plans (AHIP), told TPM over the phone. “What would be most helpful in ensuring stability in 2018 is to formally continue the funding for CSRs at least through the 2018 benefit year.”

She confirmed that Congress appropriating the funds is one way to bring stability, but added, “Whatever the mechanism is that Congress identifies for funding those CSRs through 2018…the solution for the continued funding is what we’re looking for as opposed to making recommendations about what particular vehicle is selected.”