Skip to main content

See also:

Court invalidates Obamacare subsidies

In a stunning ruling this morning, the DC Circuit Court of Appeals ruled that some Obamacare subsidies are illegal:

WASHINGTON – A powerful federal appeals court dealt a major blow to ObamaCare on Tuesday, ruling against the legality of some subsidies issued to people through the Affordable Care Act exchanges.

A three-judge panel ruled 2-1 on Tuesday that the IRS went too far in reinterpreting the language in ObamaCare to extend subsidies to those who buy insurance through the federally run exchanges, known as HealthCare.gov.

The clear language of the ACA, aka the Affordable Care Act, only allowed subsidies to be paid to people who bought their insurance through state-run insurance exchanges:

The suit maintains that the language in ObamaCare actually restricts subsidies to state-run exchanges, of which there are only 14, and does not authorize them to be given in the 36 states that use the federally run system, commonly known as HealthCare.gov.

This is the biggest threat to the ACA thus far:

"Section 36B plainly makes subsidies available in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith. "We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly."

In his dissent, Judge Harry Edwards, who called the case a "not-so-veiled attempt to gut" Obamacare, wrote that the judgment of the majority "portends disastrous consequences."

Judge Edwards is right that Halbig v. Burwell intends to gut the ACA. That doesn't mean, though, that the majority opinion isn't right. The intent was clear. The ACA's plain language states clearly that subsidies are only available to state-run exchanges.

First, this ruling means the Obama administration will appeal this to the Supreme Court. If the Supreme Court upholds this ruling, Congress will have have to rewrite the ACA if they want to extend these subsidies to people who bought their insurance through HealthCare.gov.

Second, if the Supreme Court upholds this ruling, that means the GOP House would have leverage to insist on other changes to the ACA. That's the one thing this administration doesn't want.

Third, this case won't be heard by the Supreme Court until next year. By then, Republicans might hold both the House and the Senate. If that happens, they could push through significant changes to the ACA. That would put President Obama in the impossible position of either vetoing the subsidies or signing a bill that includes lots of changes that would dramatically change the ACA.

Predictably, the Left is upset with this ruling:

The plaintiffs' claim has been met with derision by Obamacare supporters, who argue that it relies on a narrow reading, or even misreading of the law. Those supporters said the claim ignores its overarching intent: to provide affordable insurance to millions of people who were previously uninsured.

The ruling isn't complicated. It simply affirms what the bill's language says. If Congress wanted these subsidies to be for everyone, they should've written that the subsidies should be for anyone buying insurance through a federal or a state exchange.

It isn't the judiciary's responsibility to rewrite Congress's messes.

UPDATE: The Department of Justice "will seek en banc review by the full D.C. Circuit."