Federal judge rules Obamacare funded unconstitutionally

A judge found in favor of House Republicans on one aspect of Obamacare.

A federal judge ruled Thursday that the Obama administration has been improperly funding a key Obamacare subsidiary program, absent the legislative branch's appropriations – and in so doing, she handed House Republicans a long-sought victory in the ongoing battle over President Obama's signature health-care overhaul.

Specifically, U.S. District Court Judge Rosemary Collyer, an appointee of George W. Bush, said the subsidy program can in fact continue, pending an appeal. But she also made clear the House was correct in its legal challenge – that the program, while authorized by Congress, was never given funding.

Collyer said the administration does not have the power to spend money on "cost sharing reduction payments" to insurers without an appropriation from Congress.

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

Constitutionally, the executive branch simply doesn’t have the power to spend money that Congress hasn’t appropriated.

"Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution. Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or since. Congress is the only source for such an appropriation, and no public money can be spent without one," said Collyer.

The Obama administration is likely to immediately appeal.

“This is an historic win for the Constitution and the American people," Speaker Paul Ryan, R-Wis., said in a statement. "The court ruled that the administration overreached by spending taxpayer money without approval from the people's representatives."

"This decision is a critical step in protecting Congress's power of the purse from an Administration that has repeatedly ignored a fundamental principle of our Republic: the separation of powers," said House Ways and Means Committee Chairman Kevin Brady.

If the ruling were to stand, however, the set-back to Obamacare could prove substantial. The health-care reform package was set up to reimburse insurance companies that provided subsidized medical treatments to low-income individuals who obtained their mandated coverage through the federal-exchange system.

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A chink in that funding armor could mean more out-of-pocket expenses for the very low-income earners Obama claimed to want to help when he pressed forward his signature health-care overhaul years ago.

The suit stemmed from a 2014 White House request to Congress to fund Obamacare in its budget. House Republicans denied the funding, but Obama officials deviated funds from a refundable tax credit account for that subsidy purpose. Former House Speaker John Boehner kicked off House v. Burwell, the lawsuit challenging this unilateral White House funding, saying the executive branch didn't hold the authority to go behind lawmakers' backs to appropriate tax dollars.

The Justice Department, for its part, claimed the White House acted appropriately.

Josh Earnest, White House press secretary, said of the ruling, the Hill reported: "This is not the first time that we've seen opponents of the Affordable Care Act go through the motions to try to win this political fight in the court system."

He also indicated the White House was ready for more fights.

"[Republicans are trying to] refight a political fight that they keep losing," he said. "They've been losing this fight for six years and they'll lose it again."