House Republicans on Friday filed a long-anticipated lawsuit against the White House, alleging the Obama administration abused its power by making unilateral changes to the implementation of the Affordable Care Act. The lawsuit comes just hours after President Obama enacted sweeping changes to the immigration system, enraging conservative lawmakers and setting the stage for an all-out war between the Republican Party and the president over the limits of his executive authority. The legal action threatens not only the president's healthcare overhaul, but could change the power of executive authority forever.
The government makes these payments to insurance companies for a little-known program called "cost-sharing reductions." These are subsidies that low-income people get to help cover the out-of-pocket costs above and beyond monthly premiums. Cost-sharing subsidies essentially cap how much Obamacare enrollees have to pay for co-payments, co-insurance, and other forms of cost-sharing. The limit is on a sliding scale by income, so someone right at the poverty line would be expected to spend no more than $2,250 on out-of-pocket insurance costs. The cost-sharing reduction would kick in to cover anything above and beyond this. You can see how the cost-sharing limit goes up with income in this chart from the Kaiser Family Foundation. The federal government pays the cost-sharing subsidy directly to the insurance plan. So if, for example, someone right at the poverty line had $3,000 in out-of-pocket costs, she would pay $2,250 — and the government would send along the other $750.