Challengers Ask SCOTUS to Hear Obamacare Subsidies Case



Last week, two circuit courts split over legal challenges to the Obama administration's decision to allow subsidies in federally run exchanges under Obamacare.

A three judge panel in the D.C. Circuit ruled that the administration's implementation, authorized by an Internal Revenue Service rule, was illegal. A separate three judge panel from the Fourth Circuit ruled that the administration's approach was allowable under the law. 

The challengers who lost in the Fourth Circuit have now appealed directly to the Supreme Court, asking the high court to resolve the issue as quickly as possible.

The petition, from the Competitive Enterprise Institute (CEI), which is coordinating the challenges, lays out the central question and the stakes involved:

Two Courts of Appeals have squarely divided over its facial validity. The resulting uncertainty over this major plank of ACA implementation means that millions of people have no idea if they may rely on the IRS's promise to subsidize their health coverage, or if that money will be clawed back. Employers in 36 states have no idea if they will be penalized under the ACA's employer mandate, or are effectively exempt from it. Insurers have no idea if their customers will pay for health coverage in which they enrolled, or if large numbers will default. And the Treasury has no idea if billions of dollars being spent each month were authorized by Congress, or if these expenditures are illegal. Only this Court can definitively resolve the matter; it is imperative that the Court do so as soon as possible. 

The high court is under no obligation to hear the case, but will do so if four justices decide to grant certification. Challengers hope that the Supreme Court will agree to hear the case as soon as possible. If the court does hear the case, a decision could come as early as next spring. 

(Disclosure: I worked at CEI from summer 2005 through early 2007.