All eyes today are focused on the Hobby Lobby case, argued in the Supreme Court.

Michael F. Cannon from CATO argues that Hobby Lobby isn’t the most important case being argued today:

Tuesday, all eyes will be on a high-profile Obamacare case before the Supreme Court. But just a few blocks away, a lower court will hear a lesser-known Obamacare case that could have a far greater impact on the future of the law.

The Supreme Court hears oral arguments Tuesday in Sebelius v. Hobby Lobby, a case challenging the Obama administration’s attempt to force private companies to purchase contraceptives for their employees contrary to the owners’ religious beliefs. A ruling for Hobby Lobby would restore the religious freedom of potentially millions of employers and workers.

Just down the street, the Court of Appeals for the D.C. Circuit will hear oral arguments in Halbig v. Sebelius. Obamacare supporters call Halbig the greatest existential litigation threat to the Affordable Care Act.”

That description, while colorful, is not quite accurate. Halbig does not ask the courts to strike down any part of the law. It merely asks the court to force the administration to implement the law as Congress intended, a prospect that absolutely terrifies Obamacare supporters.

The issue is whether the IRS can issue subsidies for people who sign up for Obamacare through federally run exchanges, which would seem to be contrary to the plain language of the statute.  Prof. Jonathan Adler at Volokh Conspiracy analyzed the issues yesterday:

As has been recounted in this space before, the plain text PPACA authorizes tax credits and cost-sharing subsidies for the purchase of qualifying health insurance plans purchased in health insurance exchanges “established by the State under section 1311” of the Act. PPACA supporters believed every state would create its own exchange. They were mistaken, however, and over thirty states have refused. In response, the IRS promulgated a regulation authorizing tax credits and subsidies in all exchanges, whether or not they were “established by the State under 1311.” Halbig is one of four pending challenges to this regulation.

On January 15, Judge Paul Friedman of the U.S. District Court for the District of Columba upheld the IRS rule. According to Judge Friedman’s opinion, an exchange may provide tax credits and cost-sharing subsidies even if it was neither “established by a State” nor “established . . . under section 1311.” As should be clear, I take a different view. Indeed, my work (with Michael Cannon) has been credited with inspiring this litigation and I co-authored an amicus brief in Halbig expanding on our research (see also here).

We’ll update as we get analyses of today’s argument.


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