Hospitals slump on federal court ruling backing Republicans on unconstitutionality of ACA subsidies without OK from Congress

  • Hospital stocks took it on the chin today as bearish investors anticipate the potential softening of revenues after a federal judge ruled that the Obama administration is unconstitutionally spending money to reimburse health insurers for the extra cost of providing coverage to low-income Americans under the Affordable Care Act (ACA) without obtaining an appropriation from Congress.
  • House Republicans sued Obama accusing the President of violating the law by delaying the enforcement of several provisions of the ACA. Lawyers later focused on the reimbursements, which could be as high as $175B over a decade according to Republicans. Predictably, administration attorneys say the suit should be dismissed because the House has no legal right to sue considering the reimbursements were authorized by law.
  • Judge Rosemary Collyer, appointed by George W. Bush in 2002, issued an order stopping further reimbursements, but its implementation will be delayed until the appeal process runs its course.
  • Related tickers: (CYH -10.8%)(HUM -2.5%)(HCA -3.2%)(HLS -1.5%)(KND -8.1%)(LPNT -3.3%)(THC -9.8%)(SSY -1.5%)

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