Another Judicial Blow to ObamaCare

Another judicial decision – another nail in the coffin of ObamaCare. If you’ve been following this blog, you know there have been two important court decisions concerning the eligibility for subsidies on the federal insurance exchanges. For those of you scoring at home, until now it’s been 1 to 1 – one in favor of ObamaCare as written and one in favor of the Obama administration’s re-interpretation of the law.

The first big decision came in the D.C. Circuit Court where the case Halbig v. Burwell was decided in favor of Halbig by a three -judge panel. The majority opinion ruled that the law must be interpreted as written (what a novel idea!) which states that eligibility for subsidies must be “established by the states.” This struck down the White House interpretation, which was forced upon the IRS, to regard eligibility for subsidies in both state and federal exchanges.

This was deemed necessary by the White House after 36 states chose not to establish their own state exchanges. Despite the plain wording of the law, they chose to ignore that since it didn’t suit their political agenda.

However, the Halbig ruling was countered by the opposite ruling by the Fourth Circuit Court in Virginia later the same day in King v. Burwell. This court ruled in favor of the White House and allowed the change in the law, albeit reluctantly. The attorneys for King immediately filed an appeal to the Supreme Court.

The White House countered with a request for an en banc review of the D.C. Circuit Court ruling to try to change their ruling. Since the Obama administration had just recently packed the same court with several liberal appointees, they assume the ruling by the full court will be favorable to them. The court is now composed of 7 liberal justices and 4 conservatives. True to form, the request for an en banc review was granted, even though the historical rate of such reviews is only one in 500 cases. The en banc review is scheduled for December 17th, thereby granting the White House an additional three months delay.

Pruitt v. Burwell

But now comes another judicial decision on the same matter from the State of Oklahoma. Oklahoma Attorney General Scott Pruitt won a victory in his lawsuit in the Oklahoma U.S. District Court in a ruling that upheld the law as written, again. This decision agrees with the original Halbig v. Burwell ruling.

U. S. District Court Judge Ronald White stated, “The court holds that the IRS rule is arbitrary, capricious, and abuse of discretion or otherwise not in accordance with law . . . . the court is upholding the Act as written. Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will.”

Judge White explains further: “The alternative leads us down a path toward Alice’s Wonderland, where up is down and down is up, and words mean anything.”

The Wall Street Journal editorial board opines that the White House would prefer that ObamaCare remain in such a legal wonderland for as long as possible. But this ruling puts more pressure on the Supreme Court to hear the issue and make a final determination. “The relevant questions are now squarely in front of the Supreme Court, and for the sake of the law and the future of heath policy the Justices should accept an appeal for the King case for their term that begins next week.”

Chris Conover writes in Forbes that the odds are strong that the Supreme Court would uphold the law as written just as Judge White ruled. Even liberal Supreme Court Justice Elena Kagan has previously upheld legislation as written in Michigan v. Bay Mills Indian Community. She wrote “This court does not revise legislation . . . just because the text as written creates an apparent anomaly as to some subject it does not address. . . This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that . . . congress ‘must have intended’ something broader. . . Congress of course may always change its mind – and we would readily defer to that new decision . . . We will not rewrite Congress’s handiwork.”  Justices Scalia and Roberts are also on record with similar views in similar cases.

The Impact of the Decision

Michael Cannon, writing in Forbes, says the overturning of the IRS interpretation of the law will have monumental repercussions. He estimates this would free over 8 million Americans from the burden of the individual mandate along with 57 million workers from the burden of these mandates. The Congressional Research Service says such a ruling “could be a major obstacle to the implementation of the Act.”

Such a ruling would necessitate re-writing of the law to comply with the White House’s desire to extend these subsidies to everyone on the federal exchanges. But that would require the cooperation of a Republican Congress more interested in repealing the law than changing it to suit President Obama.

This issue of which interpretation of the law is correct will not be settled soon. It will require months to even years to move through the judicial system to a final ruling by the Supreme Court. But the Supreme Court should accept the issue for review with haste to limit the damage to the American taxpayer for the unlawful waste of money on tax credits never intended by the law.

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