Republicans sue Obama Administration for massive taxpayer-funded payouts to health insurance companies

(NaturalNews) House Republicans have filed suit against the administration in D.C. Circuit Court, alleging unilateral actions taken regarding the implementation of provisions tied to the Affordable Care Act by President Obama are outside of his constitutional authority.

The suit, which had been threatened by GOP leaders for months, was filed against secretaries of the Treasury and Health and Human Services departments, and reports said it focuses on two critical aspects of Obamacare relating to the manner in which the law was put into effect.

As reported by CNBC:

The suit accuses the Obama administration of unlawfully postponing a requirement that larger employers offer health coverage to their full-time employees or pay penalties. (Larger companies are defined as those with 50 or more employees.)

In July 2013, the administration deferred that requirement until 2015. Seven months later, the administration announced a further delay, until 2016, for employers with 50 to 99 employees.

'Potential game changer'

The lawsuit also charges that Obama has illegally awarded some $175 billion of taxpayer money to insurance companies under the law -- yes, the very some ones he characterized as "greedy" and uncaring when he was campaigning for Obamacare's passage in 2008 and 2009.

The Congressional Budget Office has said that the administration will pay those tens of billions to insurers over the next decade despite the fact that the funds have never been appropriated by Congress, under the Legislative Branch's Article I power of the purse. The suit alleges that the funds transfer is thus unconstitutional.

CNBC noted that the issue centers on subsidies known as cost-sharing reductions, which the Treasury pays to insurance companies on behalf of American insurance enrollees whose incomes "range from the poverty threshold to two and a half times the poverty threshold ($11,670 to $29,175 a year for an individual)."

Obamacare critics are calling the suit's success a potential game changer, because it would essentially gut the law. People would not lose health coverage, because insurance companies would still be legally required to provide it; however, they likely would have to raise costs elsewhere to compensate (or raise rates -- which they are already doing in response to insurance company taxing provisions of the Act).

"The subsidies reduce the co-payments, deductibles and other out-of-pocket costs that consumers incur when they go to doctors and hospitals," CNBC reported.

Another legal challenge to Obamacare

Michael Cannon, director of health policy for the libertarian CATO Institute, has been instrumental in opposing the law's constitutionality. In 2012, he and law professor Jonathan Adler authored a paper in which they argued that "Congress specifically meant to limit insurance subsidies to states that ran their own marketplaces," Vox reported, not through the federal exchange via Healthcare.gov. A separate lawsuit, citing Cannon's and Adler's conclusions, claim an IRS rule permitting taxpayer subsidies to enrollees through the federal exchange were never authorized in the law and are therefore illegal. The law's actual language says subsidies are available to people who enrolled "through an Exchange established by the State" -- not the federal government. The scholars said the provision was meant to entice states to adopt exchanges.

The House suit, meanwhile, comes a day after Obama revealed his plans to unilaterally move forward on immigration reform, which could result in as many as 5 million illegal aliens being permitted to live and work in the U.S. without a threat of deportation.

House Republicans have labeled it "executive amnesty" in violation of the U.S. Constitution, because only Congress can pass laws; GOP leaders have said they may add an immigration component to their Obamacare lawsuit

"Time after time, the president has chosen to ignore the will of the American people and rewrite federal law on his own without a vote of Congress," Speaker John A. Boehner said in a statement. "If this president can get away with making his own laws, future presidents will have the ability to as well. The House has an obligation to stand up for the Constitution, and that is exactly why we are pursuing this course of action."

Sources:

http://www.cnbc.com

http://papers.ssrn.com

http://www.vox.com