A three-judge panel at the D.C. Circuit asked the lawyers in the case to provide an update on Feb. 21. (Photo: John Kroetch/Thinkstock)

A federal appeals court on Monday granted a request from U.S. House Republicans to pause their lawsuit that challenges how the Obama administration funded an Affordable Care Act insurance subsidy program.

The House, represented by its general counsel Thomas Hungar, had asked the U.S. Court of Appeals for the D.C. Circuit to freeze the litigation to allow Donald Trump’s Justice Department to re-evaluate whether to settle or withdraw the case. The case deals with the subsidies provided through the ACA cost-sharing reduction subsidy program. The program helps low-income ACA public health insurance exchange enrollees cover the cost of deductibles, co-payments and other out-of-pocket costs.

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The D.C. Circuit panel—judges Karen LeCraft Henderson, David Tatel and Sri Srinivasan—granted the request. The court asked the lawyers in the case to update the panel on Feb. 21 about the next steps. The ruling was a win for the House, which had secured a key decision in the trial court that funding for the subsidies program was unlawful. The Justice Department brought the appeal.

U.S. District Judge Rosemary Collyer in May ruled for the House, saying the government, without a funding appropriation from Congress, unlawfully paid billions of dollars in reimbursements to insurance providers. The government, the court said, was not permitted to fund the cost-sharing reduction subsidy program through an appropriation that provides tax credits to lower the cost of insurance premiums.

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“The relatively short stay requested by appellee would provide the incoming president and his appointed officials time to decide whether withdrawal or settlement of the appeal is warranted,” Hungar wrote in D.C. Circuit papers. “In light of public statements by the President-Elect and his campaign, there is at least a significant possibility of a meaningful change in policy in the new administration that could either obviate the need for resolution of this appeal or affect the nature and scope of the issues presented for review.”

The Justice Department had urged the D.C. Circuit not to pause movement in the case, one that the government has framed as a significant intrusion in separation of powers. Lawyers from Main Justice said the House had shown no compelling reason to pause the litigation midstream. The deadline for the House’s opening brief was late December.

“If the House wishes to dismiss its complaint voluntarily, the executive branch has no objection to an order that dissolves the injunction and remands with instructions to dismiss the complaint and vacate the district court’s decision,” the Justice Department’s Alisa Klein wrote in court papers last month. “But if the House wishes to proceed with this unprecedented suit, it should file its brief on the due date that was set by agreement of the parties.”

The Justice Department said Collyer’s order in the case, if left to stand, “threatens to ‘create untenable business uncertainty’ for insurers and significant harm to consumers.”

Related:

GOP: We need ACA cost-reduction subsidy information

Democrats defend ACA subsidy program funding

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