Appeals Court Slightly Wounds Obamacare
It’s too soon for champagne, but perhaps a beer is in order.
In a 2-1 decision in the case of Halbig v. Burwell, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit has ruled that the Internal Revenue Service cannot interpret the Affordable Care Act, also known as Obamacare, as allowing subsidies for those Americans who purchase health insurance from the federal health insurance exchange known as Healthcare.gov. This is because the text of the law specifies that subsidies or tax credits are available for insurance purchased on state-created exchanges.
Later on Tuesday, the Fourth Circuit Court of Appeals ruled oppositely: that the subsidies are permissible for the federal exchange. More in this in a moment.
Should the D.C. Circuit’s ruling ever actually take effect, this would mean that those who purchased Obamacare insurance in a state that did not create its own exchange but instead relied on the federal exchange must cover the full cost of their insurance rather than have others pay for some share of it. (What a novel concept in Barack Obama’s America!)
A lower court had ruled that the intent of the law was to permit subsidies for insurance purchased on either a state or federal exchange, but the panel ruled otherwise: “Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges ‘established by the State,’ we reverse the district court and vacate the IRS’s regulation.”
The ruling comes down to the permissibility of the IRS to interpret the law under a relatively lenient standard: “we will uphold an agency action unless we find it to be ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”
Please read the rest of my article for the American Spectator here:
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