A federal appeals court in Washington has ordered a review of a case involving a major challenge to the Affordable Care Act, raising hopes among the law’s supporters that the law would ultimately prevail. It also diminished the near-term prospects the Supreme Court would become involved in the case.
The order means the full U.S. Circuit Court of Appeals for the District of Columbia will hear Halbig v. Burwell, a case on which a three-judge panel ruled 2-1 in favour of the plaintiffs in June. The 2-1 decision threw out an IRS regulation that implements key subsidies for health insurance under the Affordable Care Act, allowing millions of low-income people to afford insurance.
The Halbig lawsuit is viewed as having the potential to cripple Obamacare in the 36 states where the federal government provides subsidies for low-income people to buy health insurance.
The plaintiffs in the case argue the way the law was written does not allow for subsidies to be provided by the federal government, pointing to a statute that says subsidies should be issued to plans purchased “through an Exchange established by the State under Section 1311” of the Affordable Care Act. Section 1311 establishes the state-run exchanges. But plaintiffs say the law does not permit subsidies in federal exchanges, according to Section 1321 of the law.
The three-judge panel in July was comprised of two Republican appointees and one Democratic appointee. But the Obama administration has better maths with a full, 13-judge panel, which is comprised of eight Democratic and five Republican appointees. Three of President Barack Obama’s appointees to the court have been confirmed by the Senate after a rules change in the past year.
“The full D.C. Circuit will hear Halbig, an important and welcome next step in the process of the Halbig case,” a senior Obama administration official told Business Insider.
“The 2-1 decision of the panel was wrong, and we are confident that the full court will recognise that the text of the statute, the clear intent of Congress, and common sense all demonstrate that premium tax credits are available to Americans in every state — as a unanimous panel of the Fourth Circuit has already concluded.”
In a separate ruling hours after the D.C. Circuit Court panel handed down its Halbig decision in July, the Fourth Circuit Court of Appeals gave the law a unanimous victory in a similar challenge and upheld the federal government’s ability to distribute subsidies.
The plaintiffs in that case are appealing directly to the U.S. Supreme Court. But if, as expected, the D.C. Circuit Court issues a different ruling in concurrence with the Fourth Circuit, the Supreme Court may not step into a situation where the lower courts are in agreement.
“We’ll now see whether the D.C. Circuit will apply longstanding principles of statutory interpretation or will acquiesce to the administration’s request that it be allowed to ignore the plain text of a duly enacted law,” Jonathan Adler, a law professor at Case Western Reserve University in Ohio and a conservative legal scholar behind the Halbig challenge, told Business Insider.
“We’re this not about the [Affordable Care Act], this would really be an easy case.”
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