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Federal judge rules Obamacare is being funded unconstitutionally

House Republicans won Round 2 in a potentially historic lawsuit Thursday when a federal judge declared the Obama administration was unconstitutionally spending money to subsidize health insurers without obtaining an appropriation from Congress.

Last year, U.S. District Court Judge Rosemary Collyer broke new ground by ruling the GOP-controlled House of  Representatives had legal standing to sue the president over how he was enforcing his signature healthcare law.

On Thursday, she ruled the administration is violating a provision of the law by paying promised reimbursements to health insurers who provide coverage at reduced costs to low-income Americans.

The judge's ruling, while a setback for the administration, was put on hold immediately and stands a good chance of being overturned on appeal.

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But the 38-page opinion highlights the repeated complaint from Republicans that Obama and his administration have ignored constitutional limits on their authority.

The Constitution says "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law," Collyer noted, but the administration has continued to pay billions to insurers for their extra cost of providing health coverage.

"Paying [those] reimbursements without an appropriation thus violates the Constitution," she wrote. "Congress is the only source for such an appropriation, and no public money can be spent without one."

House Speaker Paul Ryan called the ruling “a historic win for the Constitution and the American people. The court ruled that the administration overreached by spending taxpayer money without approval from the people’s representatives.”

White House Press Secretary Josh Earnest said the administration remained confident it will prevail in the end.

“This suit represents the first time in our nation’s history that Congress has been permitted to sue the executive branch over a disagreement about how to interpret a statute,” he told reporters. “It’s unfortunate that Republicans have resorted to a taxpayer-funded lawsuit to re-fight a political fight that they keep losing."

Two years ago, House Republicans sued Obama under then-Speaker John Boehner and claimed the president had violated the law by delaying enforcement of several provisions of the Affordable Care Act.

But lawyers later focused on the reimbursements for health insurers that had received little attention before. They said these payments would come to $175 billion over a decade.

The healthcare law says insurers who enroll eligible, low-income Americans shall cover the costs of their deductibles and co-payments, but promises the federal government “shall make periodic and timely payments” to cover those costs.

The law is not entirely clear on where this money will come from, however.

At first, the administration asked Congress for an appropriation to cover these costs.

But when that request went nowhere in Congress, officials at the Department of Health and Human Services said they could continue to pay these required reimbursements.

They said payments were like “other appropriate entitlements like Medicaid” that are covered by permanent federal funds and not subject to an annual appropriation.

Judge Collyer called that claim a “most curious and convoluted argument whose mother was undoubtedly necessity.”

Collyer, an appointee of President George W. Bush, said she would block “any further reimbursements…until a valid appropriation is in place,” but then put her order on hold while the administration appeals.

The case of House of Representatives v. Burwell will move to the U.S. Court of Appeals for the District of Columbia, where Democratic appointees have a solid majority.

Obama’s lawyers will likely renew their argument that this lawsuit should be thrown out because lawmakers do not have standing to sue the executive branch.

In the past, the Supreme Court has tossed out suits from senators who objected to how the administration was interpreting the law.

But a ruling may not come until after Obama leaves office next January.

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UPDATES:

2:43 p.m. – This story was updated with comment from House Speaker Paul Ryan

10:38 a.m.: This post was updated with a staff-written account replacing wire service reporting.

This was first posted at 10:20 a.m. 

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