After already surviving two challenges that resulted in U.S. Supreme Court decisions that essentially preserved the law (National Federation of Independent Business v. Sebelius and King v. Burwell), the Affordable Care Act will face additional judicial scrutiny as a federal district court has denied the administration’s motion to dismiss the case brought by the House last year.  (United States House of Representatives v. Burwell et al., No. 1:14-cv-01967 [D. D.C. filed November 20, 2014).

In breaking the news of the decision on Wednesday, Law360 described it as “bad news for the ACA.”  The court ruled that the House has standing and stated a proper claim in its challenge to the Obama administration’s expenditure of funds to subsidize lower income participants in health exchanges without Congressional fund appropriation, as provided in Article 1 of the U.S. Constitution.  This pre-trial ruling does not address the merits of the case.  Nevertheless, it creates new uncertainty as to the future of those government subsidies, which are considered critical to the viability of the health exchanges that provide coverage for millions of Americans.

This case may well be headed to the Supreme Court in a few years for the ultimate determination on whether implementation of exchange subsidies is contingent upon specific Congressional appropriation – in other words, we might see Burwell II.  How the subsidies will be funded in the interim will be interesting to follow.