Obamacare

The Biggest Legal Threat to Obamacare May Have a Chance

|

credit: MBisanz / Foter / CC BY-SA

Today's Supreme Court argument over Obamacare's contraception mandate may be getting the most attention, but it's not the biggest legal threat to the health law currently in the court system.

That honor goes to Halbig v. Sebelius, a case challenging the use of the law's subsidies for health insurance in the federally run health exchanges operating in 36 states. A three-judge panel at the U.S. District Court of Appeals for the District of Columbia heard arguments for that case this morning. I did not attend the hearing, but most observers seem to agree that the challengers made a strong showing, and may actually have a chance at winning the decision.

The case's underlying argument is really quite straightforward: Despite clear statutory language saying that the law's subsidies were only to be offered within exchanges established by a state, the Internal Revenue Service (IRS) issued a rule declaring that the subsidies would also be available through exchanges established by the federal government. The text of the law is quite clear and consistent that the subsidies can only be offered in state-run exchanges. But the IRS and the law's defenders argue that allowing subsidies through the federal exchange is acceptable because, despite the lack of statute, it is consistent with the larger purpose of the law.

Two of the three judges seem to have made their decisions already.

Appearing to side with the government in favor of the expansive IRS rule, Judge Harry Edwards said the argument against the use of the subsidies in the federal exchanges makes "no sense whatsoever" and accused the challengers of attempting to "gut the statute." 

Judge Arthur Randolph, on the other hand, was friendlier to the challengers. He said that the statutory language "doesn't seem to be malleable," and he responded critically to a government lawyer's argument that the subsidies are authorized through any exchange. "That's a leap, not an interpretation," he said i

A third judge, Thomas Griffith, offered fewer hints about how he might decide. But he did appear at least potentially skeptical of the government's position, clarifying at one point that an exchange established by the federal government is not "established by the State."

That distinction is the heart of the case. The fact that Griffith seems to believe that there is a meaningful distinction suggests he may be willing to side with the challengers against the government.

Over at The Volokh Conspiracy, Jonathan Adler, who, along with Michael Cannon of the Cato Institute, coauthored a paper that inspired the Halbig and several similar legal challenges, offers a more detailed look into the particulars of the case and what the courts have gotten right and wrong about the case. 

Advertisement

NEXT: Does Microsoft Have the Right To Search Your Email?

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Judge Harry Edwards said the argument against the use of the subsidies in the federal exchanges makes “no sense whatsoever”

    In other words: “Are you serious?”

    1. Judge Harry Edwards said the argument against the use of the subsidies in the federal exchanges makes “no sense whatsoever”

      In other words: “Are you serious?”

      Ah yes, the same rationale that the Supreme Court used to declare Black people not to be citizens of the United States in Dred Scott.

  2. What does a ruling against the government on this challenge means for the law?

    1. Everybody using the federal exchange has to pay the full way. And the system collapses.

      1. AND LO, THE TEARS, THEY WILL BE YUMMY AND SWEET

      2. I also believe it means that there’s no individual mandate to purchase (and therefore no penalty for not purchasing) nor employer mandate to provide coverage in states with federal exchanges.

        1. Well, yeah, but other than THAT…right?

        2. I also believe it means that there’s no individual mandate to purchase (and therefore no “tax” for not purchasing)

          FTFY

      3. Or Republicans are bullied into fixing that part of the law. Or the next Republican President decides to “fix” the law as a whole instead of repealing it and coming up with real reforms.

        1. Aqua Buddha willing, Rand is elected and that will not happen.

        2. Or Republicans are bullied into fixing that part of the law.

          That would be interesting to see play out.

          1. “Hey, you said we had to pass it to see what was in it. Well, looks like maybe you should have read it before passing it.”

    2. It also affects employer penalties for employers who are in states using the federal exchange.

      I’m foggy on the details, but there is one set of employer penalties that is triggered by having employees get subsidies. No subsidy, no penalty.

      That’s the real threat. If having a state exchange imposed penalties on the employers on that state, states are going to come under a lot of pressure to drop their exchanges.

      1. Of course my state will remain perhaps the only one that still maintains its state run exchange, because anything that is not absolute groveling to the alter of black jebuz is evidence of racist wimminz-hating and chilrunz-starving teabaggery.

      2. You’re not foggy. The employer penalty is triggered only if an employee gets a subsidy or tax credit for purchasing insurance on an exchange. No subsidy or tax credit, no penalty.

  3. The fact that Obama has pretty much ignored the mandates included in the PPACA, which was the basis for the SCOTUS decision to call it a “tax” thus it falls under Commerce Clause authority shows that this entire process is making a mockery of our system of government.

    There are no rules anymore. Obama has twisted the entire process to adhere to his political whims and has essentially ignored due process altogether. Regardless of the outcome of any of these legal challenges the damage has already been done and the precedent set for future Executives is frightening.

    1. Yeah, but O is so COOL, so it’s all good! Right?

      1. He so dreamy

    2. And his waiving of the various provisions puts total lie to the government claim that this or any other provision is a compelling government interest. How can anything associated with this mess be called “compelling” when Obama reserves the right to waive it for political expediency?

      1. Political expediency is a compelling gov’t interest. Duh.

        1. What could ever be more compelling than keeping racist women haters out of control of the country?

          1. That seems a tad too temporary for them, I think the most compelling state interest would be the total annihilation of ratfucking racist teabagging wimminz haterz and chilrunz and elderly starvers altogether.

            A sort of final solution if you will.

      2. Remember when Cruz was lambasted for “shutting down the government” by demanding that they delay the individual mandate?

        The media portrayed Cruz as a destroyer of worlds who was trying to deny people their free health care.

        Obama does the exact same thing Cruz was criticized for and no one even bats an eye.

        Journalism is dead.

      3. He is not waiving anything, you moron. It has been shown to you that the dates in the letter of the law are flexible.

        1. No, it can’t move more than 8%.

          1. What if you move it 4% + 4%?

            What will that make it?

          2. I imagine that shriek doing arithmetic looks something like this

            Blackadder: Right Baldrick, let’s try again shall we? This is called adding. If I have two beans, and then I add two more beans, what do I have?
            Baldrick: Some beans.
            Blackadder: Yes… and no. Let’s try again shall we? I have two beans, then I add two more beans. What does that make?
            Baldrick: A very small casserole.
            Blackadder: Baldrick, the ape creatures of the Indus have mastered this. Now try again. One, two, three, four. So how many are there?
            Baldrick: Three.
            Blackadder: What?
            Baldrick: …and that one.
            Blackadder: Three and that one. So if I add that one to the three what will I have?
            Baldrick: Oh. Some beans.
            Blackadder: Yes. To you Baldrick, the Renaissance was just something that happened to other people, wasn’t it?

        2. It has been shown to you that the dates in the letter of the law are flexible.

          You can find similar (“no earlier than . . . “) language in a lot of laws. Including, I seem to remember seeing, in the civil rights laws and/or various environmental laws.

          1. Finally, a post seeped in reality.

          2. So you’d be cool with a President who indefinitely postponed enforcement of civil rights and environmental laws?

        3. Holy shit. You just keep topping your own shreekisms.

          Because Obumbles has ignored law in the past, he can do so some more?

          Crawl back in your hole and drink some drano.

        4. They only seem flexible to you because you are an illiterate retard and cuts and pastes canned talking points that you cannot understand.

          No one believes that argument. It is utterly fucking ridiculous and counter to the plain language of the law and the practice of the last 220 years of government. Only a profoundly stupid and dishonest ape such as yourself could make that argument.

          1. Only a profoundly stupid and dishonest ape

            TeH RacIZMMMMMM!11!!!!

        5. Oh really?

          Section 1501 of the Affordable Care Act says:
          “”(a) REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.?An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.”

          Exactly where is the “flexibility” in the phrase, “shall for each month beginning after 2013?”

        6. Or this, also from Section 1501:

          “”(b) SHARED RESPONSIBILITY PAYMENT.?
          ”(1) IN GENERAL.?If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a penalty with respect to the individual in the amount determined under sub- section (c).
          (2) INCLUSION WITH RETURN.?Any penalty
          imposed by this section with respect to any month
          shall be included with a taxpayer’s return under
          chapter 1 for the taxable year which includes such
          Month.”

          Where is the flexibility here?

          1. BTW, you’ve got to love the Orwellian term, “Shared Responsibility Payment.”

    3. The fact that Obama has pretty much ignored the mandates included in the PPACA, which was the basis for the SCOTUS decision to call it a “tax” thus it falls under Commerce Clause authority shows that this entire process is making a mockery of our system of government.

      Not so sure if this is BarryO making a mockery of it or the system collapsing of it’s own weight. Keep in mind, this passed Congress. All these ‘details’ that will take a bevy of appeals and small armies of Constitutional geniuses to tease out were thoughtfully considered, in full, by every member that voted for it.

      Whether they read it or not.

    4. If President Obama can delay implementation from 2013 to 2016 via presidential fiat, then President Rand can delay it from 2016 to 2200 the same way.

      Of course, since Presidentess Clinton can then require compliance starting in 2024, the whole thing becomes a permanent albatross of uncertainty hanging around the neck of industry.

  4. the subsidies in the federal exchanges makes “no sense whatsoever” and accused the challengers of attempting to “gut the statute.”

    How is it appropriate for a judge assigned to impartially interpret the law to attack the motives of petitioners like that?

    1. There is that. There is also the idea that even though the plain language and legislative history of the law indicate that Congress meant it to work exactly like the petitioners said it somehow strikes this judge as making “no sense whatsoever”. Apparently, only things that the President approves of can make any sense.

      1. Roberts has already set the precedent that the plain language and legislative history of the law are irrelevant when making judgements about what it says.

    2. How is trying to “gut [a] statute” a nefarious motive in the first place?

      1. Gutting usually entails the use of a sharp object, and therefore, INCENDIARY RHETORICZ!1!!11

    3. Silly Grand Moff, judges have never been impartial. They are simply politicians in robes.

  5. Once again the O administration is arguing that they should be able to do something because it will allow them to do something, the law be damned.

    Proggies do hate them some rule of law. How can you accomplish big things if your power is limited?

  6. But the IRS and the law’s defenders argue that allowing subsidies through the federal exchange is acceptable because, despite the lack of statute, it is consistent with the larger purpose of the law.

    Oh, the Larger Purpose! Of course! How handy that is. No need to spell things out carefully in words that get passed by legislators, just invoke the Larger Purpose of the law when you want to change any troublesome later. We always all agree what that is, right?

Please to post comments

Comments are closed.