Breaking: Federal Court Rules Obamacare Insurance Subsidies Invalid
July 22, 2014 - 7:55 am
This case was going to the Supreme Court anyway, but for the notoriously liberal U.S. Court of Appeals for the D.C. Circuit to rule the subsidies invalid may sound the deathknell of an important part of Obamacare.
This morning the U.S. Court of Appeals for the D.C. Circuit released its much awaited opinion in Halbig v. Burwell. In a 2-1 opinion, the Court held that the Internal Revenue Service regulation authorizing tax credits in federal exchanges was invalid. Judge Griffith, writing for the court, concluded, “the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges ‘established by the State.” In other words, the court reaffirmed the principle that the law is what Congress enacts — the text of the statute itself — and not the unexpressed intentions or hopes of legislators or a bill’s proponents. Judge Randolph joined Judge Griffith’s opinion and wrote a concurrence. Judge Edwards dissented. The opinions are available here.
Background on the case can be found here.
CNBC lays out some of the consequences of the ruling:
A judicial panel in a 2-1 ruling said such subsidies can be granted only to those people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia — not on the federally run exchange HealthCare.gov.
“Section 36B plainly makes subsidies available in the Exchanges established by states,” wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith. “We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.”
In his dissent, Judge Harry Edwards, who called the case a “not-so-veiled attempt to gut” Obamacare, wrote that the judgment of the majority “portends disastrous consequences.”
Indeed, the decision threatens to unleash a cascade of effects that could seriously compromise Obamacare’s goals of compelling people to get health insurance, and helping them afford it.