Obamacare Opponents May Have Reached a Dead End in Court


The D.C. Circuit Court of Appeals on Thursday granted a request by the Obama administration to have its full panel of judges review an earlier decision that found those who purchased health insurance on federally run exchanges can receive federal subsidies in the form of tax credits.

At issue in the lawsuit is an IRS regulation that interpreted the Affordable Care Act’s tax credit provision to apply to insurance purchased through the federal exchange.

Opponents of the health-care reform law argue that the IRS rule is not authorized by the ACA, which states the tax credits were for insurance bought through exchanges “established by the state.” The challengers claim the statutory language means tax subsidies were only meant to apply to those state-run exchanges.

In July a divided panel of D.C. Circuit judges ruled that people who purchase insurance through federal exchanges in the 36 states that declined to set up their own exchanges were not eligible to receive tax credits to help subsidize the cost of that coverage.

The D.C. Circuit’s decision was announced the same day a different federal appeals court ruled the opposite and held that the federal government could offer subsidies for health insurance purchased through federally run exchanges.

Those challenging the federal government’s ability to administer subsidies for health insurance on the federal exchanges had requested the U.S. Supreme Court step in and resolve the issue.

But earlier this week, the Roberts Court granted a request by the administration for more time to respond to that request.

Elizabeth Wydra, chief counsel for the Constitutional Accountability Center, a public interest law firm and advocacy organization, said Thursday’s decision by the D.C. Circuit Court of Appeals, along with the Roberts Court’s grant of additional time to the Obama administration to respond to that court filing, leaves the legal challengers at a dead end.

“Decisions this week by the D.C. Circuit and the U.S. Supreme Court have put these last-ditch challenges to the Affordable Care Act exactly in the position they deserve to be—virtually nowhere,” Wydra said in a statement.

Constitutional Accountability Center Senior Counsel Simon Lazarus echoed Wydra’s conclusion, noting that the D.C. Circuit’s decision to hear the case before its entire panel resolves, for the time being, any disagreement in the federal courts that would normally prompt Supreme Court intervention.

“On Tuesday of this week, the Supreme Court rejected the claims transparently fabricated by the challengers’ attorneys to rush the High Court into hearing an appeal of the case that the challengers lost at the Fourth Circuit,” Lazarus said in a statement. “Instead, the Court granted the federal government their entirely routine request for additional time to respond. Then, this morning, the D.C. Circuit decided to re-hear the case in which the challengers were victorious, and by so doing, eliminated any pretext  that immediate Supreme Court review is required to resolve a split between the Fourth and D.C. Circuits.”

In addition to providing another legal challenge to the Obama administration’s signature legislative achievement, the case presents an early test for the administration’s judicial appointments.

It was Republican concern over appointments to the D.C. Circuit Court of Appeals—considered to be the second most powerful court in the country—that led to last year’s Senate fight that prompted Democrats to reform filibuster rules. The full court, including Obama appointees Sri Srinivasan, Patricia Millett, Cornelia Pillard, and Robert Wilkins, has yet to decide a case together.

Oral arguments in Halbig v. Burwell are scheduled for 9:30 a.m. on December 17.

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