What happens if congress refuses to appropriate money for ACA?

I assume there is a GQ answer to the question, but I don’t object to moving it. I just saw on this morning’s Votemaster posting that 27% of the federal budget goes for medicare, medicaid, and ACA. Suppose congress were to simply refuse to appropriate money to cover some of this. What would happen in that case?

Well, remember when they didn’t vote money to fund the entire Federal Government, and it had to shut down?

The Administration could juggle numbers for a while, and then would have to close the doors at the relevant offices and bureaus at HHS.

There has been more than one government agency shut down and eliminated by defunding it. Also many times a big news item is some new government regulation that is going to save the world but no money is put up to enforce it.

This came up during the Obama admin. After all, the Republicans controlled Congress for much of that time and they wouldn’t be willing to fund it, since they mainly spent their time trying to repeal it. Obama’s answer was that most of its funding was embedded in the bill.

What do you think “defunding the ACA” consists of? It isn’t a governmental entity, after all.

It’s a law directing various entities to behave a certain way.

It’s a bit like Trumps empty Executive Order telling ACA enforcement entities to be as restrained as the law allows. The law doesn’t allow enforcement agencies to refuse to enforce it.

What if Congress refused to appropriate money for the Exchange subsidies and/or Medicaid expansion?

The money has to come from somewhere and if congress doesn’t appropriate the money, then what? That’s my question. And what defunding means.

The vast majority of the spending authorized by the ACA is mandatory spending (including Medicaid expansion matching and exchange subsidies). It cannot be “refused” without passing a law that modifies that authorization. Which, of course, would require 60 votes in the Senate (unless you use the reconciliation process which the GOP just tried, and failed, to do).

Some information on mandatory spending here: https://www.thebalance.com/mandatory-spending-definition-programs-and-impact-3305940

One could also point out that not funding Medicaid matching screws the states directly and eliminating subsidies screws poor folks buying health insurance. Neither does anything to change the regulations and requirements on insurance products that the GOP actually wants to change, nor does it change the new taxes included in the ACA. So it would actually work pretty poorly for the GOP from a policy and politics perspective as well.

Lots of wonkishness on the appropriations embedded in the ACA here: https://fas.org/sgp/crs/misc/R41301.pdf (PDF warning).

I guess that’s the answer I was hoping for. Thanks.

No, this is wrong. Enforcement agencies have discretion over how they enforce the rules - this is why when you get pulled over for speeding, you don’t have to get a ticket, why a DA can drop charges against a person, why not all mistrials are re-tried, why the Obama Administration could direct ICE to prioritize certain types of folks to deport over certain others, etc.

Trump could simply refuse to enforce the individual mandate. He could direct the IRS to not enforce the penalty for not having insurance. He could exercise discretion in a multitude of ways to collapse the ACA if he really wanted to slash and burn. If Trump’s only goal was to destroy the ACA, he could do that easily by himself - for as long as he is in office.

Consider where the money spent on Obamacare ends up.

Much of it goes to hospitals – 20% of them are owned by stockholders.
A lot goes for drugs, bought from Big Pharma (with no price negotiation).
Much of it subsidizes purchasing insurance from big insurance companies.
Some goes for medical equipment, from the medical devices industry.
Some goes in payments to doctors.

So effectively, much (most?) of the money spent on Obamacare eventually ends up in the hands of groups that are heavily Republican. They aren’t going to shut down that gravy train, no matter how much they complain publicly about it.

Presumably it would go like this:

Congress decides to pass a bill that after X date, “we will no longer pay bills related to ACA”.
Unoless they give plenty of warning, like maybe a year or two:

So, the government will be sued by the states that expanded medicaid, as they promised to fund IIRC 90% of the extra costs of Medicaid expansion.
They will also be sued by the insurance companies that were promised that their customer’s premiums for the private exchanges would be subsidized by the feds in a major way.
Unless they repeal the “Cadillac tax” people who pay the extra tax will be saying “what’s this extra money I paying going to, then?”
People on the private exchanges will be told their insurance coverage stops as of date X or earlier.
Late bills from doctors and hospitals will not be paid.
Employers paying too much for health care will announce cheaper plans eliminating many of the guaranteed items mandated? Not necessarily, unless those rules are also rescinded.
people without money or insurance who go to hospitals will continue to be subsidized by paying customers, just 24 to 40 million more.

It wouldn’t. Taxpayers generally cannot sue the federal government just for doing things that negatively impact them financially, except (so far) for Establishment Clause violations. That’s what we have elections for.

But states or companies (and individuals) can sue the government for breach of contract if an existing arrangement is terminated in mid-stream. I don’t know where the additional federal money for Medicaid expansion falls in terms of contract law, but a promise is a promise, and so essentially a contract. Depends on the amount of notice. Presumably reasonable notice to terminate existing arrangements without liability would mean they would end insurance coverages, say, about the time people are voting for the next round of congresscritters.

Read the following from the Votemaster under the rubric “Republicans have an easy way to kill the Affordable Care Act”: http://www.electoral-vote.com/evp2017/Pres/Maps/Mar28.html#item-6.

Basically, the act calls for a subsidies for insurance companies that get stuck with too many sick people and the HR Republicans sued to prevent the payments. Some federal judge has apparently ruled for the plaintiffs (on what grounds it is not said–perhaps that the money had not been authorized by congress). If Trump fails to appeal the ruling, it stands and insurance companies might desert in droves, killing the ACA.

This would make Trump’s claim that the ACA is about to implode correct.

Yes, but that’s different I assume from the subsidies where people who do not make enough income, have their insurance premiums subsidized. This was additional coverage for excessive claims. Plus, should the subsidies fail to be paid, the insurance companies can then sue. I’m guessing they haven’t yet because the level of cost has not hit the trigger point where costs are so high that extra subsidies are necessary; so no implosion… yet.

When it does happen, presumably the insurance companies can sue instead. There’s some principle in law IIRC that you can’t settle a lawsuit issue by having two parties actually on the same side pretend to take an issue to court. So the final outcome of that lawsuit would be called into question since the executive failed to defend it… if the insurance companies can afford expensive lawyers. Do you think they can?

Yes, failing to defend the lawsuit could cut off the subsidies causing insurance companies to pull out of the market. Furthermore, the employer and employee mandates have been scuttled, which will mean far fewer healthy people in the risk pool, raising rates for the rest.

The Democrats don’t control the House or Senate now, but they would have a strong incentive to gain control 2018 if Trump/GOP lets the ACA die by executive action/legislative indifference. Might light a fire under their asses, who knows.

What contract? What promise? When the federal government gives states money, it doesn’t obligate itself to continue giving them money for ever and ever. States would no longer be bound to comply with Medicaid coverage requirements if Congress stopped funding Medicaid, but that doesn’t mean Congress has to give them money.

The AHCA act would have started winding down payments for Medicaid expansion in 2020 -

Presumably cold turkey slamming the door on any payments would result in (a) a lot of uninsured people and (b) lawsuits from state governments promised the money.

The government is under no obligation to fund anything indefinitely, but it must reduce funding in a reasonable manner. It could not, for example, chop funding for a department so abruptly that there is no money for final pay cheques or any termination pay. Despite being the 500-lb gorilla it still has certain obligations.

Payments to states under federal entitlement programs are unlike wages and salaries paid to federal employees, which are the subject of a contract. What you say is true of the executive branch. But Congress can pretty much do as it pleases with regard to funding, except that it may not place “coercive conditions” on funds given to states.