The House GOP Finally Files Their Lawsuit

August 3, 2014

Now that House Republicans have finally filed their lawsuit against the president after talking about it for nearly half a year, the countdown to when it will be thrown out of court can begin.

What’s interesting though is that the Republicans are not just challenging the president’s authority to delay the employer mandate. They’re also challenging a provision that reimburses insurance providers who keep their prices lower.

In other words, House Republicans are suing to increase your bills.

The other focus of the lawsuit is a little-known provision in ObamaCare designed to alleviate out-of-pocket medical costs for people with lower incomes. 

Separate from the widely discussed premium subsidies on the exchanges, the administration pays health insurance companies to reduce the cost of deductibles and co-pays for some consumers. The Congressional Budget Office estimates the payments will total $3 billion this year and $175 billion over 10 years.

Republicans argue that the payments are unlawful because no funds for the subsidies have been appropriated by Congress.

Funds for the subsidies have not been appropriated by Congress because the funds are redistributed from other insurance providers.

Funds from providers who overcharge are redistributed to providers who undercharge, preventing large variations or price shocks. This is what some Republicans have alleged is a “taxpayer bailout” of insurance providers, but it isn’t. It’s more comparable to a professional sports league, like the NFL, that redistributes funds from one franchise to another.

The net effect of this program is that your out of pocket costs are lower than they otherwise may be.

Why do House Republicans want you to pay higher prices? Why do House Republicans want to make business more difficult for insurance providers?

A memo from the speaker’s office which downplays the threat to American pocketbooks posed by their lawsuit misses the point

”The lawsuit [sic] were successful on this cost-sharing point, no low-income Americans would lose their health care because insurance companies would still be required to provide the coverage/subsidy to those people,” a memo stated. 

“The insurance companies simply wouldn’t be able to get a refund from the government for the subsidy.”

Yes, Americans would still be able to acquire federally subsidized plans, but their premium or their out-of-pocket costs would go up because insurance companies are not going to just eat the extra cost; they’re going to pass the extra cost on to the consumer.

Isn’t the Republican party the party that routinely craps their pants over the non-existent threat of skyrocketing costs? Don’t they say Obamacare is responsible for higher costs? Why are they suing to increase costs?

The House will have a difficult time proving that they have been “injured” by the delay of the employer mandate. This will be especially difficult for them to prove because they have voted numerous times to delay or repeal the mandate.

A lawsuit filed by Wisconsin Senator Ron Johnson (R) which sought to take subsidies away from congressional staffers was thrown out of court earlier this year because his office could not provide evidence of injury.