MA AG Joins with Other States to Defend Critical Aspect of ACA

Massachusetts Attorney General Maura Healey announced that her office would join with Attorneys General from 14 other states and D.C. in an attempt to intervene in House v. Price, now pending before the D.C. Circuit Court of Appeals.  The motion was filed on May 18, 2017.  The lead states are California and New York.

House v. Price concerns a lawsuit filed by House Republicans in 2014 that attempted to erode certain aspects of Obamacare.  The lawsuit alleges that the Obama administration illegally allocated billions of dollars in funding to health insurance companies (termed “cost-sharing reductions”) in order to assist low income patients pay for out-of-pocket medical expenses.  On May 12, 2016 Judge Collyer (a Bush appointee) of the District of D.C. ruled that this allocation of funds was an unconstitutional spending of money that had not been authorized by Congress.  Accordingly, she enjoined the “cost-sharing reductions” but stayed the injunction pending appeal.

AG Healey’s press release announcing her office’s support for the motion placed the Trump administration squarely in the cross-hairs saying “[d]espite the repeated attempts by the Trump Administration and the Republican Congress to sabotage the Affordable Care Act, it remains the law of the land… In Massachusetts, we believe that everyone should have access to health care and we will use our state authority to defend the law and our values.”  President Trump has bluntly declared that the pending litigation could “explode” the ACA, and his administration is unlikely to continue the appeal.  The proceedings are currently in abeyance in order to allow time for a “resolution that would obviate the need for judicial determination of [the] appeal, including potential legislative action.”  In general, the motion to intervene raises an interesting question as to whether the states have standing to step into the shoes of the federal government and continue the appeal.

For the states to intervene, they need to establish a legally protected interest.  The requisite interest exists if the states face a potential injury sufficient to establish Article III standing.  The states’ motion amply describes the multitude of harms which would result from the district court’s injunction going into effect.  These harms include: 1) rising health insurance premiums for residents of the several states leading more people to forgo health insurance: 2) general destabilization of the state-operated health care exchanges as a result of healthy people forgoing health insurance due to the higher premiums; 3) diminished competition as certain health insurers would exit the exchanges in the absence of the cost-sharing reductions; 4) loss of direct federal funding to basic health programs in NY and MN; and 5) rising health care costs for every state.  Indeed, the most tangible state harm outlined in the motion is the potential rise in uncompensated care which would greatly burden state resources.  Both state and federal law require state-funded hospitals to provide emergency care regardless of a patient’s insurance status or ability to pay.  Put simply, as the number of uninsured goes up, so does state health care spending.

While the motion exhaustively explains the potential injuries from the injunction, it devotes only slightly more than one page to the explanation of how those injuries confer Article III standing.  In cursory fashion, the motion explains that the enumerated harms “stem directly from improperly allowing the House to maintain this lawsuit and the district court’s improper interpretation of the ACA.  And the harms would be redressed by a decision from this Court… [thus the] States have both a legally protectable interest in the outcome of this appeal and Article III standing to intervene.”  This assertion of standing could fall short.  Interestingly, the motion also makes an equitable argument for intervention highlighting the House’s own questionable Article III standing.  The motion suggests that because the existing parties urge the Court to allow the motion to stand, allowing intervention is the only way to give the Court a set of willing parties “able to present a competing view” on whether the district court even had jurisdiction to hear the case initially.

We will see if the states have made a winning argument.  We will keep you apprised of any updates.

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