A federal appeals court put a key Obamacare case on hold Monday as judges begin to anticipate a President Trump, and move to give his administration the chance to change the Obama administration’s legal strategy on everything from immigration to health care.

The latest case is a landmark challenge brought by the U.S. House against the Health and Human Services, which was sending Obamacare money to insurance companies despite Congress specifically canceling the money in the annual appropriations process.

The case is pending in the U.S. Circuit Court of Appeals for the District of Columbia, and several sets of briefs are due over the next two months, but a three-judge panel issued a short order Monday putting the case in abeyance and asking for updates to be filed a month after Mr. Trump is sworn in.

He has promised a clean break from President Obama on health care, saying he would move to repeal the 2010 Affordable Care Act.

“The D.C. Circuit wisely put this case on hold, recognizing that they may never have to resolve this thorny constitutional question. Waiting one month will let the case go away after the change in administrations,” said Josh Blackman, an associate professor at the South Texas College of Law.

He had predicted that the appeals court judges would welcome a chance to take a step back from the case, which presents thorny issues about what one chamber of Congress can do to stop a runaway executive branch.

But Democrats said the ruling paves the way for Mr. Trump to quickly unravel Obamacare next year.

Rep. Steny H. Hoyer, the second-ranking House Democrat, said all Mr. Trump would have to do is order his Justice Department to stop defending Obamacare in this case, and the government would have to stop paying insurance companies, who would then pull out of Obamacare, leaving customers without coverage.

“It will be possible for the next President to sabotage the ACA immediately upon taking office without any action by Congress, upending the stability of health insurance markets and eliminating subsidies that enable millions of Americans to afford health coverage,” Mr. Hoyer said.

The case stemmed from a challenge the House of Representatives filed against Mr. Obama’s Health and Human Services Department, which made Obamacare payments to insurance companies despite Congress zeroing the funding out in its appropriations bills.

A lower court sided with the House, ruling both that lawyers had standing to sue and that the spending was illegal.

Mr. Obama had fought to keep the case on track, with his lawyers arguing insurance companies who are counting on the money could be confused, and might be scared away from participating in Obamacare.

“The district court’s decision thus threatens to ‘create untenable business uncertainty’ for insurers and significant harm to consumers,” the Justice Department argued in briefs filed last month.

The department declined to comment Monday on the latest legal blow.

The lower court judge’s ruling hasn’t gone into effect yet, so lawyers for the House said there’s no more uncertainty by delaying. Those lawyers also said there’s a high chance the case would be settled by a Trump administration that’s committed to unraveling Obamacare, and moving ahead now would only waste resources and time, since they’d have to reargue all the issues after the Jan. 20 transition of power.

The jump from an Obama White House to a Trump presidency could mark the biggest break in presidential transition history, with deep differences on nearly every major public policy issue.

Mr. Trump has nominated Sen. Jeff Sessions, who opposed many of the current administration’s policies, to be his attorney general.

Obama lawyers had already signaled surrender on immigration cases, agreeing to requests to put several major court battles on hold to await a Trump administration.

But the president had fought the House’s request, saying bigger issues than policy were at stake. In particular, Mr. Obama argues, allowing one chamber of Congress to sue to stop a presidential action threatens the separation of powers.

Justice Department lawyers said no matter Mr. Trump’s position on Obamacare, he is not any more likely than the current president to want to see his powers threatened by a single chamber of Congress.

“This suit arrogates to the House a role in deciding how laws will be executed that the Constitution assigns to the Executive Branch,” the Obama lawyers said.

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