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Is the Affordable Care Act in trouble again?

Will it dodge another bullet?
Will it dodge another bullet?
Photo by Chip Somodevilla/Getty Images

After the Supreme Court upheld the Affordable Care Act in a controversial 5-4 ruling two years ago, most assumed this was the final word on the law. But a new threat to the law previously written off as an impossible task has emerged on the horizon.

The case, Halbig v Sebelius, is a major legal challenge that targets the ACA by going after the legality of the federal subsidies and those who benefit from them. A U.S. District Court previously sided with the Obama administration on Jan. 15 and the case is now before a three-judge panel of the U.S. Court of Appeals for the District of Columbia. The Hill reported today that the Court could issue its ruling on Tuesday.

The key part of the lawsuit is one line in the ACA statute that says subsidies will be available only to consumers who buy their new health insurance on “an Exchange established by the State.” Thirty-six states refused to build their own exchanges, so the federal government went ahead and built Healthcare.gov for the people in those states as a substitute. These subsidies are critical to the success of the ACA. Without them, purchasing health care on the individual marketplace would likely become too expensive for the residents who are in the federal exchange. This would also have an adverse effect on the insurance companies, who are depending on millions of new customers to keep prices from skyrocketing. The “sticker shock” ACA critics have been warning about since the law was passed would come full circle.

Does the lawsuit have a shot? Two prominent legal experts appear to think so. "Of all the challenges since the individual mandate, this is the one that presents the most mortal threat to the act," Jonathan Turley, a professor at George Washington University Law School, told the liberal website Talking Points Memo. Lawrence Tribe, Obama’s legal mentor and prominent supporter of the ACA also said this week that the Supreme Court would almost certainly get “a second bite of the apple” and “wouldn’t bet the family farm on this coming out in a way that preserves Obamacare.

But the Obama Administration still has the upper hand. If the three-judge panel rules against the government, it’s likely the administration will request an en banc ruling, which means there would be a vote taken by all of the judges on the court. The full court is comprised of 11 judges and tilts in the Democrats' favor by a 7-4 margin. So it is likely that even if the three judge panel sides against Obama, the full Court will overturn the decision in short order. The Supreme Court will then be more reluctant to take up Halbig v. Sebelius because two full courts will have ruled in favor of the Affordable Care Act.

So ultimately despite some legal eagles' concerns, the Act will probably dodge another bullet. But no matter what happens, the law will remain unpopular for the foreseeable future and it will be a long time before opponents throw in the towel.