As Peter Suderman
noted earlier, the U.S. Court of Appeals for the District of
Columbia Circuit ruled today in Halbig v. Burwell that the
plain text of the Patient Protection and Affordable Care Act trumps
an I.R.S. rule granting insurance subsidies through the federally
run health exchanges now operating in 36 states. In effect,
according to the D.C. Circuit, the Obama administration is in
violation of its own health care law.
Yet just a few hours later, a second federal appellate court,
the U.S. Court of Appeals for the 4th Circuit, reached the opposite
conclusion, ruling that while the relevant provision of the federal
health care law might appear to cut against the federal government,
the I.R.S. is nonetheless entitled to the benefit of the doubt from
the federal courts.
“We cannot discern whether Congress intended one way or another
to make the tax credits available on HHS-facilitated Exchanges. The
relevant statutory sections appear to conflict with one another,
yielding different possible interpretations,” the 4th Circuit
declared in King v. Burwell. “Confronted with the Act’s
ambiguity, the IRS crafted a rule ensuring the credits’ broad
availability and furthering the goals of the law. In the face of
this permissible construction, we must defer to the IRS Rule.”
We now have a circuit split on this fundamental question about
the legality of the ACA, a fractured state of affairs that
increases the likelihood of review by the U.S. Supreme Court. The
next big question is whether the Obama administration will seek
en banc review by the D.C. Circuit, which is a re-hearing
of the case by a full bench of D.C. Circuit judges (in contrast to
the 3-judge panel that just ruled). If that turns out to be the
case, the Supreme Court will stay out of the dispute pending final
resolution by the D.C. Circuit, a process that could take many
months. But if it’s not the case, Obamacare could be back before
the high court next term.
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