Obamacare Subsidies Struck Down in DC Circuit

My, we’re having a big day in court today! First, the DC Circuit found, in Halbig v. Burwell (a case I blogged about a week ago), that payment of the Obamacare subsidies in States using the federal exchange system was in violation of the text of the statue, which holds the subsidies will be paid in exchanges “established by the State.” The DC Circuit “reluctantly” reverses the District Court, which had held the IRS decision to pay the subsidies was lawful, finding that Section 36B of the law unambiguously limits the payments to State established exchanges. I have little doubt they were reluctant in the extreme to do so; Courts in general don’t like making big, controversial decisions, and this one is a doozy. It affects millions of people, more than 60% of those qualified for the exchange subsidies, and involves tens of billions of dollars in federal payments. It is also fair to note both of the judges making the call– there were three opinions published– were appointed by Republicans, and the one Democrat appointed judge involved disagreed and dissented.

And shortly thereafter, in a case styled King et al v. Burwell et al, the Fourth Circuit made the opposite decision, ruling the IRS is within its bounds in paying the subsidies, and the law, read as a whole, clearly indicates Congress intended Obamacare to apply to everybody, and the IRS’ interpretation is correct.

I have not yet had the opportunity to read more than the synopses of the opinions, so I am not yet prepared to get into the legal weeds of who is right or wrong and why. I will read the opinions in full (there are five of them across the two cases) and offer my opinion once I have had a chance to think about them. Some conclusions, however, can be drawn immediately:

  • This is not a Constitutional case. At issue here is the Administrative Procedure Act (APA) 5 USC 706(2)(A).  The argument is whether or not the IRS has exceeded their authority in authorizing the payments in a manner allegedly contrary to the statutory language.
  • This legal battle is far from over: The DOJ has already announced their intent to request a en banc hearing from the DC Circuit to reconsider the case. Whether they get it or no, they can and of course will appeal it to the Supreme Court. There’s some question in my mind whether or not they will get it; Circuit Courts in general don’t like to do that in the absence of a real miscarriage of justice. It’s divisive, it rehashes something supposedly already settled, it ties up all the judges and prevents other cases being heard, and in this case it’s doubtful an en banc hearing will actually settle the matter as this one is almost certainly going to the Supremes. There will be a lot of political pressure for the DC Circuit to do so from the beltway mavens, and the new judges Harry Reid seated by going nuclear will want to prove they’re on the court to help the progressives (every one of them is an uber-leftie). Even so, the losers in the Fourth Circuit will surely appeal their case to the Supreme Court– their attorneys are probably feverishly doing the paperwork as I type– arguing the split circuits. In addition, there are two more functionally identical cases in Indiana and Oklahoma still in the District Court stage, but which will be coming up the ladder if the matter is not settled at this level, and maybe if it is. Indiana is in the Seventh Circuit, Oklahoma is in the Tenth Circuit. Seventh tends a bit leftie, Tenth leans a skosh rightie. There’s a solid chance we’ll get split Circuits no matter what the DC Circuit does. Split Circuits and/or a request by the administration just about guarantee a Supreme hearing. The Supremes also take cases by the Rule of Fours; that is if four Justices want to hear it, they grant certiorari. You can bet Scalia, Alito and Thomas will. Roberts is a probable and Kennedy a maybe. This is almost certainly going up the ladder.
  • Nothing is going to happen immediately. DC Circuit stayed their ruling pending appeal and Fourth, of course, ruled nothing should change anyway.
  • Every time Obamacare goes to court, another piece gets chiseled off, at least so far. NFIB v. Sebelius stopped the feds from forcing the States to expand Medicaid and prevented the Congress from compelling commercial activity so they could regulate it.  Hobby Lobby v. Burwell prevented the feds from violating religious freedom against the RFRA. And today in Halbig v. Burwell the DC Circuit is willing to order them to stop paying the subsidies in States who don’t want their law. Thus, each time it goes to court, the law gets more expensive and less effective. That’s really good news for the liberty-minded among us.
  • While the legal battle is interesting, the politics are probably going to be more critical.

So, on to the politics. We are today exactly 15 weeks from election day. The very last thing Democrats wanted to have happen just now was a re-litigation of Obamacare; especially in an election year when they are facing an ugly map. Democrats have been begging people to just accept their Obamacare victory and move on ever since the day the President signed it. Self evidently this has not happened, nor is it likely to. Obamacare is a blatantly unconstitutional usurpation by the feds of power properly belonging in the hands of the States or the People, and it is not going to go away. Ever. Either the law will be eventually repealed, or rendered ineffective, or soon or late we will have a Civil War about it, seriously risking balkanizing the country over it. You can anticipate an upramp of Obamacare related political activity. Jean Shaheen, Mary Landrieu, Mark Pryor, Mark Begich and Mark Udall are especially vulnerable, having voted for the law, and will undoubtedly see an increased amount of political activity involving it. It might even provide Monica Wehby some ammo to use against Jeff Merekly away out in Oregon.

While it will energize Republican midterm voters, there is some chance it will do something similar for Democrats. I personally doubt this– right now, and subject to change without notice– because D’s have trouble getting their people to the polls all the time, especially in off years, and nothing immediate has actually happened. Still, the possibility exists it may motivate some of them. If Republicans are smart– don’t bet on this– they’ll spend the August recess designing and agreeing upon an Obamacare alternative which they can quickly get through the House in September or October. If they manage that trick it will bid fair to nailing the Democrat coffin shut; the more so if they write it up so there is no compulsion, so you can keep your doctor, and so you can buy a plan you actually like and which fits your needs.

The Democrat problem with Obamacare is going to get worse, not better. They were surprised when most of the States didn’t want to, or were incapable of, erecting their own exchanges. They have been far more surprised the public perception of the law has not improved– actually it’s gotten worse– since they started giving away more government freebies. That’s the first time they’ve ever done that and had this response. The chaotic nature of the law, and the blatant lies they told to sell it are haunting them. Just today there’s a new story up about the limited networks damaging the public perception. Since Democrats are wearing the albatross around their necks, this is an excellent opportunity for Republicans to jump on it with both feet and bury them.



themaskedblogger is a native born Texan, a registered voter and possessed of some minimal ability to read, write and think.

Posted in Congress, Courts, Department of Justice, Election 2014, Healthcare and health insurance

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