U.S. Capitol building in Washington, D.C. Photo: Mike Scarcella/ALM

The U.S. House and U.S. Department of Health & Human Services on Monday asked a federal appeals court to freeze for another 90 days a dispute over billions of dollars in insurance industry subsidies under the Affordable Care Act, a delay that could further unnerve the health insurance markets.

The lawfulness of the subsidies—which the government pays to health insurers as part of a cost-sharing program to reduce premiums and other out-of-pocket expenses for low-income consumers—is the centerpiece of a case in the U.S. Court of Appeals for the D.C. Circuit. An estimated 6 million consumers participate in the cost-sharing program.

The D.C. Circuit in December put the case on hold to allow the U.S. House of Representatives, which sued over the propriety of the subsidies, and the incoming Trump administration to decide whether and how to resolve the dispute. The court set a May 22 deadline for the lawyers to advise the panel judges on the next steps in the litigation.

“The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action,” House general counsel Thomas Hungar wrote in the filing, also signed by the Justice Department’s Alisa Klein, an appellate lawyer in the Civil Division.

U.S. House Republicans in 2014 sued health regulators to stop the government from making those payments to insurers, arguing that Congress never permitted them in the first place. A federal trial judge, Rosemary Collyer, ruled for the U.S. House in May 2016. The Obama administration’s Justice Department, representing the U.S. Health and Human Services Department, filed the appeal.

Donald Trump’s win in November set up a tricky situation for Republicans, who are now facing off in court against the Jeff Sessions-led Justice Department and HHS Secretary Tom Price. A settlement wouldn’t automatically render void the reasoning behind Collyer’s injunction that blocked the cost-sharing program. Former President Barack Obama’s Justice Department wanted the ruling overturned on the ground the House didn’t have standing to sue in the first place. That institutional concern could cut across party lines.

A group of insurance, medical and business associations—including America’s Health Insurance Plans, American Medical Association and the U.S. Chamber of Commerce—on May 19 urged Congress to fund cost-sharing reduction payments, known as CSRs.

“As providers of health care and coverage to hundreds of millions of Americans, we are writing again to you as leaders in Congress to express our serious concerns about the continued uncertainty around funding for cost-sharing reduction (CSR) payments,” the groups wrote in their letter to U.S. Senate leaders. “There now is clear evidence that this uncertainty is undermining the individual insurance market for 2018 and stands to negatively impact millions of people.”

More from their letter:

Unless CSRs are funded, a tremendous number of Americans will simply go without coverage and move to the ranks of the uninsured. This threatens not just their own health and financial stability, but also the economic stability of their communities.

A spokesperson for America’s Health Insurance Plans said on Monday: “We need swift, immediate action and long-term certainty on this critical program. It is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care.”

Sixteen state attorneys general last week urged the D.C. Circuit to let them intervene in the case to defend the subsidies. The lawyers for the 15 states and the District of Columbia said the Trump administration can no longer be relied on to defend the cost-sharing subsidies. The state AGs on the brief included California, New York, Pennsylvania, Connecticut and Illinois.

“In this litigation, the House of Representatives attacks a critical feature of the Patient Protection and Affordable Care Act—landmark federal legislation that has made affordable health insurance coverage available to nearly 20 million Americans, many for the first time,” the state AGs wrote in their filing, signed by California Solicitor General Edward DuMont. “If successful, the suit could—to use the president’s expression—’explode’ the entire act. Until recently, states and their residents could rely on the executive branch to respond to this attack. Now, events and statements, including from the president himself, have made clear that any such reliance is misplaced.”

The D.C. Circuit hasn’t yet ruled on whether to allow the states to intervene in the dispute.

In Monday’s filing, lawyers for the House and the Justice Department urged the appeals court to reject the intervention request. The D.C. Circuit in January turned down a request from two individual consumers, represented by Mayer Brown, to intervene in the case.

Kristen Rasmussen in Atlanta contributed reporting.