• Don’t panic about House v. Burwell.

    From the New York Times on what might happen if the House prevails in House v. Burwell:

    A study by the Department of Health and Human Services estimated that premiums for midlevel “silver plans” could rise by nearly 30 percent without [cost-sharing] reimbursements.

    Many consumers would be protected, since under the law, they would be entitled to larger tax credits to help pay the higher premiums, the administration said. However, taxpayers would bear some of the extra costs. The Urban Institute, a nonprofit research organization, estimated additional spending would total $3.6 billion in 2016 and $47 billion over the next decade.

    The HHS and Urban studies rest on the assumption that insurers will eat the costs of eliminating the cost-sharing reductions. As I’ve explained before, though, that’s not a realistic assumption.

    The Affordable Care Act obligates the federal government to reimburse health plans for cutting their low-income customers a break on their out-of-pocket payments. Whether or not there’s an appropriation for the cost-sharing reductions, that statutory obligation is enforceable in court—specifically, in the Court of Federal Claims.

    Health plans that get stiffed can therefore sue the federal government for the cost-sharing reductions. Winning those cases should be easy: the plans will just have to show that they’re owed money under the ACA. And here’s the kicker: Congress has permanently appropriated the money to pay court judgments, even if it hasn’t appropriated money for the cost-sharing reductions.

    The right question isn’t whether health plans will get paid. It’s when.

    That’s one reason that Congress routinely appropriates the money to honor its debts. There’s no point in refusing to do so. And so, as Kate Stith has noted, “in the case of statutory entitlement programs, even where Congress has not provided for a permanent appropriation—instead, formally enacts a new appropriation each year—internal congressional rules and practice treat such appropriations as predetermined and mandatory.” Congress’s bullheaded refusal to appropriate the cost-sharing payments marks a break with this longstanding convention.

    To be clear, any delays in getting health plans what they’re owed will be costly and disruptive. And it’s uncertain how quickly the Court of Federal Claims could process thousands of duplicative lawsuits. HHS and Treasury might try to jerry-rig a dispute-settlement process under which they’d stipulate to judgment in cases seeking payment, but who knows how well that’d work? And it’s always possible that Congress could relent and appropriate the damn money.

    To account for the delay and uncertainty, health plans would have to raise premiums—but they won’t have to raise them by as much as these early studies suggest. I don’t think it’ll come to that: the D.C. Circuit and the Supreme Court are unlikely to rule that the House has standing to bring this political dispute into court. But even if the House somehow manages to eke out a victory, the ACA isn’t in danger of collapsing.

    @nicholas_bagley

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