On the same day a federal appeals court upheld an IRS subsidy for Obamacare, GOP lawmakers seized on the opportunity of a conflicting ruling — Halbig v. Burwell — to make the point that the 2010 health care law is broken.
After a 2-1 ruling from the U.S. Court of Appeals for the D.C. Circuit said the government could not subsidize insurance in the 36 states that defaulted to the federal health care exchanges, Speaker John A. Boehner offered one of his harshest rebukes of the Affordable Care Act yet, saying the ruling was further proof the law is “completely unworkable.”
“It cannot be fixed,” the Ohio Republican said in a statement.
House Energy and Commerce Chairman Fred Upton, R-Mich., and Energy and Commerce Subcommittee on Health Chairman Joe Pitts, R-Pa., sent out a joint press release that called the Halbig ruling “a clear rebuke of the administration’s effort to extend subsidies where the law did not provide them.”
“The ruling also dramatically limits the IRS’ legal authority to enforce the individual and employer mandates,” the missive said.
That is true — or, at least, it could be true, if the rest of the D.C. Circuit Court agrees. The administration has asked the rest of the court — all 11 judges — to review the decision “en banc,” and even if the liberal-leaning court agrees, there are other cases before other courts that could undermine the decision. If upheld, many of Healthcare.gov’s customers could lose their subsidies and abandon their health care plans. The individual mandate only applies to those who are offered affordable coverage, as defined by the law. And if people lost their subsidies, their plans may no longer be deemed affordable, and the mandate may no longer apply to them.
In essence, eliminating subsidies for states that lack an exchange would have a dramatic effect on the law.
Even Democrats admitted as much in their releases expressing disappointment in the ruling. Minority Whip Steny H. Hoyer, D-Md., said Congress’s intent was clear: “Eligible enrollees ought to be able to receive a subsidy to help them afford coverage.”
Hoyer noted that the Congressional Budget Office even included subsidies for those enrolling through the federal exchanges in its analysis of the health care law’s savings and its expansion of coverage access.
“The D.C. Circuit’s terrible decision comes on the same day as a more sound ruling by the Fourth Circuit Court of Appeals, which found that the subsidies are indeed permissible,” Hoyer said. “I am confident that the judicial process, as it moves forward, will see the Fourth Circuit’s determination upheld and the D.C. Circuit’s decision overruled.”
The lawsuit in the D.C. Circuit Court case, which was filed in May 2013 and was originally known as Halbig v. Sebelius — until Health and Human Services Secretary Kathleen Sebelius resigned in April — hinges on the interpretation of a line in the law that says individuals will receive tax credits for insurance “through an exchange established by the state.”
The IRS issued guidance that said those subsidies would be available to all states. Opponents of Obamacare argue that guidance is contrary to the letter of the law.
Part of the government’s own defense is that abiding by this interpretation of the law would render several other provisions of the health care law “absurd.”
The government said the literal meaning of the statute would make the law “nonsensical” and would create an outcome “so contrary to the perceived social values Congress could not have intended it.”
The decision noted, however, that the court does not “disregard statutory text lightly.”
In the Halbig decision, the court decided that one of the appellants, David Klemencic, had standing for the suit because he does not want the insurance but, with an approximate $20,000 a year income, is faced with a choice he’d rather not have: pay $21 a year for health insurance or pay a tax penalty.
Despite the seemingly small injury on Klemencic, the court said it was an injury nonetheless.