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by Mish

What happened is healthy individuals, especially millennials decided to opt out of Obamacare. Those who opted in after having been denied coverage previously were high-cost individuals.

Adding fat to the fire, a federal court ruled today that “cost sharing reductions”  to insurers are unconstitutional payments.

Please consider Judge Rules for House GOP in ObamaCare Suit.

In a major ruling, Judge Rosemary Collyer, an appointee of President George W. Bush, said the administration does not have the power to spend money on “cost sharing reduction” payments to insurers without an appropriation from Congress.
Collyer stayed her ruling so the administration can appeal the decision.
At issue are billions of dollars in “cost sharing reduction payments” under ObamaCare which are paid to insurance companies so they can reduce out of pocket costs such as deductibles for low income people on ObamaCare plans.
The House GOP argued that the administration was unconstitutionally spending money on these payments without an appropriation from Congress.
The administration argued it did not need an appropriation from Congress because the funds were already permanently appropriated by ObamaCare in the same section as the law’s better known tax credits that help people afford coverage.
However, Collyer ruled that the section only appropriated funds for tax credits, and said the cost sharing reductions require a separate congressional appropriation, which the administration does not currently have.
“Such an appropriation cannot be inferred,” Collyer wrote. “None of Secretaries’ extra-textual arguments — whether based on economics, ‘unintended’ results, or legislative history — is persuasive. The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers under Section 1402.”

Judge Rosemary Mayers Collyer (born November 19, 1945) is a United States District Judge for the United States District Court for the District of Columbia, and a member of the United States Foreign Intelligence Surveillance Court.

On August 1, 2002, Collyer was nominated by President George W. Bush to a seat on the United States District Court for the District of Columbia vacated by Thomas Penfield Jackson. Collyer was confirmed by the United States Senate on November 14, 2002, and received commission on November 15, 2002. She has announced that she will take senior status on May 18, 2016.

Senior status equates to semi-retirement. Last October, Collyer Refused to Let House ObamaCare Suit Move to Another Court.

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Court Case

Collyer’s ruling seems to make sense. However, this case is surely headed to higher courts.

I do not pretend to know how those courts will rule.

Potential End of Obamacare

Many lawsuits were filed against Obamacare, some of them outright frivolous. This once could potentially stick.

Should the case go the the Supreme Court, it is conceivable a ruling might depend on who wins the presidential election this November.

Meanwhile there are going to be lots of skittish insurers with serious concerns. Already, many insurers are bleeding cash and dumping Obamacare.

This could mean the end of Obamacare, at least as we know it.

Mike “Mish” Shedlock