Awaiting critical ObamaCare lawsuit

By Grace-Marie Turner

Supporters of ObamaCare are nervously awaiting a decision by the D.C. Court of Appeals that could have even more dramatic consequences for the law’s ability to function than the Supreme Court’s religious liberty decisions issued last week.

Judge Thomas B. Griffith presided in March over arguments in one of the four cases – Halbig v. Burwell – challenging the Obama administration’s decision that subsidies for health insurance can flow through federal as well as state exchanges.

The Affordable Care Act says that health insurance subsidies are available only “through an exchange Established by the State.”  The IRS, however, interpreted the statute to mean that the subsidies also could be distributed in the now 36 states where the federal government is operating exchanges.

During oral arguments, Judge A. Raymond Randolph indicated he felt the statute was quite clear in repeating “seven times” in that section that the subsidies are available only if the state sets up its own exchange.

Judge Harry T. Edwards seemed to side with the government in saying that Congress’ overall intent to deliver subsidies should prevail.  Judge Griffith is likely to be deciding vote in the three-judge panel.

The administration could appeal to the full panel of D.C. Circuit Court judges if it loses.  If the plaintiffs prevail, the U.S. Supreme Court would likely hear the case next term to resolve conflicts between conflicting appeals court decisions.

The political fallout would be enormous if the D.C. Circuit decides that the law actually means what it says.  This would set up a new series of battles in the states much like those over Medicaid expansion.  States could still set up an exchange so their citizens could get the subsidies since there is no deadline for a state to do so.  But most states, like the federal government, have struggled mightily to create functional exchanges, wasting billions of taxpayer dollars in the process.

Columnist Jonathan Turley explains why liberals are so nervous in a column for the Los Angeles Times.  He cites several recent Supreme Court opinions holding that the Obama administration has exceeded its authority and violated separation of powers:

In Michigan vs. Bay Mills Indian Community, for example, Justice Elena Kagan noted that “this court does not revise legislation … just because the text as written creates an apparent anomaly as to some subject it does not address.” In Utility Air Regulatory Group vs. EPA, Justice Antonin Scalia, writing for the majority, stressed that “an agency has no power to tailor legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.” And a third strike came last week in National Labor Relations Board vs. Canning, when the Supreme Court unanimously found that President Obama had violated the Constitution in circumventing Congress through his use of recess appointments.

A decision against the government could strike a blow to the heart of the law, sending a strong message that the administration has gone far beyond its legal authority in interpreting and changing the law.  That would make it even more difficult for the administration to continue to make extra-legal changes in the future to this dysfunctional law.

On the bright side, this would clear a path for a renewed debate leading to new legislation to free states and citizens from ObamaCare’s straightjacket.

Posted on Forbes, July 10, 2014

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