CHA News Article

California Enters Lawsuit Related to ACA Cost-Sharing Reductions
Case challenges necessity of appropriation to fund CSRs

Attorney General Xavier Becerra announced today California’s intervention in a lawsuit, The United States House of Representatives v. Thomas E. Price, M.D. Secretary of Health and Human Services; U.S. Department of Health and Human Services; and, Steven T. Mnuchin, Secretary of the Treasury; U.S. Department of the Treasury (House v. Price). The case challenges whether an appropriation is necessary to fund the Affordable Care Act’s (ACA) cost-sharing reductions (CSRs). California is one of many intervening states; others include New York, Connecticut, Delaware, Hawaii, Iowa, Illinois, Kentucky, Oregon, New Mexico, Maryland, Massachusetts, Minnesota, Pennsylvania, Washington and the District of Columbia.

In support of the state’s motion to intervene, Anne McLeod, senior vice president, health policy and innovation, prepared a declaration on behalf of CHA. Part of the declaration states, “When individuals and families don’t have health care coverage, they also lose access to care. Providers don’t get paid to treat uninsured individuals. When patients can’t be seen by a primary care doctor, they often turn to hospital emergency rooms as a last resort. More uninsured individuals will seek care in hospital emergency rooms – the most expensive place to be treated – if funding for CSRs is lost.”

The injunction issued in House v. Price by the United States District Court for the District of Columbia has been stayed pending appeal. At issue in the stayed injunction are several factors, including pending repeal legislation and the possibility of action by the new Administration to refuse to make CSRs without specific appropriations regardless of the district court’s injunction. In October 2016, under the Obama Administration, the Executive Branch filed an opening brief on appeal in this case arguing that the district court’s injunction should be reversed because (1) the House lacks standing and (2) the district court erred on the merits because the ACA provides a continuing appropriation for federal CSRs. 

Following the 2016 election, the court held further briefing in abeyance because of the possibility of legislative or other developments that might make it unnecessary for the court to decide the case. The court has instructed the parties to file a status report by May 22, 2017. To the extent this litigation remains relevant, it may not be actively litigated, as to one or both issues (the House’s standing and the statutory merits), unless some other party intervenes to challenge the district court’s injunction.