On April 10, 2013, the Office of Management and Budget (OMB) submitted the President’s Fiscal Year 2014 Budget of the U.S. Government. Budget [Dkt. 30-1].9 The Appendix to the FY 2014 Budget Request contained “more detailed financial information on individual programs and appropriation accounts than any of the other budget documents.” App. to Budget [Dkt. 30-2] at 3. The Appendix included, among other things, “explanations of the work to be performed and the funds needed.” Id. In the FY 2014 Budget Appendix, the Administration requested the following:
For carrying out, except as otherwise provided, sections 1402 [Reduced Cost-Sharing] and 1412 [Advanced Payments] of the Patient Protection and Affordable Care Act (Public Law 111-148), such sums as necessary. For carrying out, except as otherwise provided, such sections in the first quarter of fiscal year 2015 (including upward adjustments to prior year payments), $1,420,000,000.
Id. at 448.
On the same day, HHS separately submitted to the relevant appropriations committees in the House and Senate a Justification of Estimates for Appropriations Committees. Justification [Dkt. 30-3]. In that document, the Centers for Medicare and Medicaid Services (CMS) explained:
The FY 2014 request for Reduced Cost Sharing for Individuals Enrolled in Qualified Health Plans is $4.0 billion in the first year of operations for Health Insurance Marketplaces, also known as Exchanges. CMS also requests a $1.4 billion advance appropriation for the first quarter of FY 2015 in this budget to permit CMS to reimburse issuers who provided reduced cost-sharing [under Section 1402] in excess of the monthly advanced payments received in FY 2014 through the cost-sharing reduction reconciliation process.
Id. at 7. In its conclusion, HHS referred to “Cost-Sharing Reductions” as one of “five annually-appropriated accounts.” Id. In a later graphic entitled “Reduced Cost Sharing,” HHS listed “--” under “Budget Authority” for “FY 2013 Current Law,” id. at 184. The chart reflects a view by HHS and OMB that no prior appropriation funded Section 1402 reduced cost sharing.10 HHS compared the Section 1402 program to “other appropriated entitlements such as Medicaid.” Id.
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On May 20, 2013, OMB issued its Sequestration Preview Report for FY 2014, which listed “Reduced Cost Sharing” as subject to sequestration in the amount of $286 million, or 7.2% of the requested appropriation. Report [Dkt. 30-18] at 23. Because permanently-appropriated programs (such as Section 1401) are exempt from sequestration, OMB’s including Section 1402 on a list of sequestration-bound programs appears to acknowledge that no permanent appropriation was available for Section 1402 reimbursements.
On July 13, 2013, the Senate Appropriations Committee adopted S. 1284, a bill appropriating monies to HHS and other agencies for FY 2014. An accompanying report stated that “[t]he Committee recommendation does not include a mandatory appropriation, requested by the administration, for reduced cost sharing assistance . . . as provided for in sections 1402 and 1412 of the ACA.” S. Rep. No. 113-71, 113th Cong., at 123 (2013). No subsequent consideration of funding for Section 1402 appears in the record, for FY 2014 or since.
On October 17, 2013, the President signed into law the first of two continuing resolutions to keep the government running pending a consolidated appropriations act. See Continuing Appropriations Act for 2014, Pub. L. 113-46, 127 Stat. 558 (2013); Joint Resolution, Pub. L. 113-73, 128 Stat. 3 (Jan. 15, 2014). Neither resolution included an appropriation for Section 1402 reimbursements. The October 2013 legislation did, however, require HHS to certify that a program was in place to verify that applicants were eligible for “premium tax credits . . . and reductions in cost-sharing” before “making such credits and reductions available,” Pub. L. 113-46, Div. B, § 1001(a), 127 Stat. 566.
On January 17, 2014, the President signed the Consolidated Appropriations Act for 2014, Pub. L. 113-76, 128 Stat. 5 (2014). That law similarly did not appropriate monies for Section 1402 reimbursements to insurers. Indeed, the Secretaries have conceded that “[t]here was no 2014 statute appropriating new money” for reimbursements under Section 1402. 5/28/15 Hr’g Tr. at 27:9-10. Since January 2014, Treasury has been making advance payments of premium tax credits and cost-sharing reimbursements to issuers of qualified health plans to eligible individuals. Sec’y Mot. at 10 & Ex. 3, CMS Payment Policy and Financial Management Group, Marketplace Payment Processing (Dec. 6, 2013) [Dkt. 55-5] at 6-7 (discussing plans “to make estimated payments to issuers beginning in January 2014 based on data provided by the December deadline”
. These payments have been based on the Secretaries’ determination that “ the permanent appropriation in 31 U.S.C. § 1324, as amended by the Affordable Care Act, is available to fund all components of the Act’s integrated system of subsidies for the purchase of health insurance, including both the premium tax credit and cost-sharing portions of the advance payments required by the Act.” Sec’y Mot. at 10.