The administration’s implementation
of Obamacare took a potentially fatal blow this morning when a
three-judge panel in D.C. Circuit Court ruled that the
administration has no legal authority to disburse subsidies through
the health law’s federally run insurance exchanges. The ruling
dealt with technical aspects of legislative language and
congressional intent, but the basic issue was incredibly
straightforward and easy to understand: The law says that subsidies
are limited to exchanges “established by a State” under a
particular provision of the law. The court therefore ruled that
exchanges established by the federal government did not count as
exchanges established by “a State.”
Not long after that ruling came out, however, the fourth circuit
court released a ruling coming to the opposite conclusion. It
declared the overall language of the law, when looked at as a
whole, to be ambiguous, and it ultimately sided with the
administration, saying that the subsidies are necessary to fulfill
the law’s policy goals, and are therefore authorized by the
law.
The conflict guarantees that the issue will drag on for a while,
either to an en banc review by the entire circuit or perhaps to a
Supreme Court appeal. Obviously, then, there’s still a lot that’s
up in the air. Yet a few things did become clear today. Here are
three big takeaways from today’s Obamacare rulings.
1. The plain language of the relevant statute is
undeniably clear. The D.C. Circuit essentially concluded
that the government could not provide a good enough legal rationale
for ignoring the plain meaning of the text. Even the Fourth
Circuit, which held that the subsidies are authorized under the
law, admitted that the challengers had a point about the particular
language governing subsidies: “The plaintiffs’ primary rationale
for their interpretation is that the language says what it says,
and that it clearly mentions state-run Exchanges….If Congress meant
to include federally-run Exchanges, it would not have specifically
chosen the word ‘state’ or referenced [the section of the law
dealing specifically with state-based exchanges].” The ruling goes
on to say that “the court cannot ignore the common-sense appeal of
the plaintiffs’ argument; a literal reading of the statute
undoubtedly accords more closely with their position.” This is the
position of the court that ultimately sided with the
administration. In other words, only through a more expansive,
non-literal reading can one side with the administration’s
approach.
2. The challenge is legitimate. As with the
challenge to Obamacare’s individual mandate, which ultimately lost
at the Supreme Court, the health law’s backers and the liberal
legal community had long argued that the argument made by the
challengers was more or less meritless. The win in the D.C. Circuit
makes clear that it is not, and even the Fourth Circuit ruling
concedes that it is a tough call, saying that “the applicable
statutory language is ambiguous and subject to multiple
interpretations” and only coming to its conclusion by “applying
deference to the IRS’s determination.” Basically, the government
won not because it was obviously in the right, but because it got
the benefit of the doubt.
3. Another court has ruled that the president is
breaking the law. The Supreme Court
repeatedly ruled against the administration in a variety of
cases this year, including the Hobby Lobby decision regarding
Obamacare’s contraceptive mandate, the administration’s
interpretation of chemical weapons law, and the president’s
recess appointment powers. The theme of these cases is clear: that
the Obama administration had overstepped the bounds of its
authority. The same goes for the D.C. Circuit’s ruling in Halbig.
One of the messages of the decision is that the Obama
administration had no authority to offer subsidies through the
federally run exchanges, that the IRS was not within its legal
rights to authorize those credits, and that the executive branch
has broken the law in making those subsidies available.
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