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Obamacare returns to Supreme Court

Obamacare returns to Supreme Court

Federal exchange subsidies on the docket.

The issue of subsidies on the federal exchange has been accepted by the Supreme Court.

Scotusblog reports:

The Supreme Court, moving back into the abiding controversy over the new health care law, agreed early Friday afternoon to decide how far the federal government can extend its program of subsidies to buyers of health insurance. At issue is whether the program of tax credits applies only in the consumer marketplaces set up by 16 states, and not at federally-run sites in 34 states.

Rather than waiting until Monday to announce its action, which would be the usual mode at this time in the Court year, the Justices released the order granting review of King v. Burwell not long after finishing their closed-door private Conference.

By adding the case to its decision docket at this point, without waiting for further action in lower federal courts, as the Obama administration had asked, the Court assured that it would rule on the case during the current Term. If it confines the subsidies to the state-run “exchanges,” it is widely understood that this would crash the Affordable Care Act’s carefully balanced economic arrangements.

We previously wrote about the King case, Whipsaw: 4th Circuit upholds Obamacare federal exchange subsidy after D.C. Circuit rejects:

From the opinion intro (emphasis added):

The plaintiffs-appellants bring this suit challenging the validity of an Internal Revenue Service (“IRS”) final rule implementing the premium tax credit provision of the Patient Protection and Affordable Care Act (the “ACA” or “Act”). The final rule interprets the ACA as authorizing the IRS to grant tax credits to individuals who purchase health insurance on both state-run insurance “Exchanges” and federally-facilitated “Exchanges” created and operated by the Department of Health and Human Services (“HHS”). The plaintiffs contend that the IRS’s interpretation is contrary to the language of the statute, which, they assert, authorizes tax credits only for individuals who purchase insurance on state-run Exchanges. For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion. We thus affirm the judgment of the district court.

The 4th Circuit case was contrary to the initial decision of the D.C. Circuit in the Halbig case. That panel decision later was vacated when the entire D.C. Circuit agreed to en banc review.

Many observers thought that the lack of a circuit split would cause the Supreme Court to decline to take the case, but obviously that was wrong.

The constitutionality of Obamacare is not at issue. Rather, the issue is the plain wording of the statute, and how much discretion the IRS and administration have to alter that plain wording.


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Calypso Facto | November 7, 2014 at 1:13 pm

It’ll be interesting to see whether “I make words mean what I want them to” Justice John Roberts actually goes with the text this time, his finger in the political winds.

The law is what we say (need) it to be! Now sit down and shut up!

    MattMusson in reply to onlyabill. | November 8, 2014 at 9:24 am

    If the SCOTUS does not force Obama to obey the letter of the law – That is a signal telling us NO IMMIGRATION BILL must be allowed to pass. Obama will just wave his wand and grant citizenship to all.

Roberts could go a long way toward redemption if he just applies one of the oldest, best-established canons for statutory interpretation that exists.

You read the FLUCKING text, and you apply the plain meaning.

    Observer in reply to Ragspierre. | November 7, 2014 at 7:32 pm

    You mean “an Exchange established by a State under Section 1311” would mean a state-established exchange, instead of a federally-established exchange created under Section 1321? What kind of world are we living in when words actually mean what they say?!?

    The most interesting thing about these cases to me is the fact that the IRS lawyers did not originally have any doubts about the fact that the subsidies could only be paid to consumers in states with state-created exchanges. It was only after getting leaned on by the White House that the IRS changed the rule and claimed that consumers in all states would be eligible for subsidies.

    It was a nakedly political move. The only question now is will the SCOTUS let the Obama administration get away with it, and in the process create a nasty legal precedent that will allow future presidents to re-write laws to suit their political purposes.

    Guess we’ll know in a few months.

Subotai Bahadur | November 7, 2014 at 2:00 pm

One key question is who voted for cert? The assumption I’ve heard is that it included Roberts and the conservatives. But there is a contrarian interpretation possible:

It could well be that Roberts and the other Leftists [since whatever extortion that worked on Roberts the first time is presumably still extant] wanted to put the final nail in the coffin of appeals based on the mere statute itself. That would give Boehner and McConnell cover to officially give up on opposing Obamacare.

The rule of law is now passé, and law is now whatever a member of the Executive Branch wants in any particular case only.

“If it confines the subsidies to the state-run “exchanges,” it is widely understood that this would crash the Affordable Care Act’s carefully balanced economic arrangements.”

what “carefully balanced economic arrangements”???

the taxes aren’t bringing in the money they said they could (surprise!), HEF’s are facing significant cuts in reimbursements, and policy rates are skyrocketing while the plans themselves are lousy.

Perhaps, this time, they could include consideration of the 9th Amendment in their opinion.

Here’s what’s at issue?

Does English mean English?

That’s it. Nothing more.

Do the clear, unambiguous, direct words of a statute mean those words?

Humphrey's Executor | November 7, 2014 at 3:32 pm

You should replace the screen shot at the top of this article with this:,34307/

Henry Hawkins | November 7, 2014 at 3:44 pm

Imagine the pressure on McConnell and Boehner to rewrite the law if the SC knocks it down. Public pressure to rewrite/restore Obamacare will come from those who will have just lost their federal subsidies for health insurance, and it will also come from the great many people who want the GOP to kill the mutant alien called Obamacare any way possible.

If it falls this way, we’ll see who really meant the Repeal & Replace Obamacare! midterm theme used by almost every GOP candidate, and who’s blowing smoke, among the GOP leadership especially.

He who slays the Dragon Obamacare wins the heart of the Fair Maiden conservative base.

Thank you for contributing to the demise of a single payer nutjob.

“The case comes down to 1 simple sentence that contains a type-o”
-Jeffrey Tobin
CNN legal expert

The taking by I.R.S. in cahoots with U.S. Treasury in rewriting of Congressional Legislation is summarized here in the closing statement presented before the 9th Dist.

The IRS rule’s attempt to offer premium-assistance tax credits through federal Exchanges lacks validity because the IRS lacks the legal authority to create entitlements where, as here, Congress has not authorized them. Congress has granted the IRS authority to offer premium-assistance tax credits and cost-sharing subsidies only through
Exchanges that are “a governmental agency or nonprofit entity that is established by a State.” The IRS lacks the authority to offer those entitlements, to enforce the employer mandate, and in many cases to enforce the individual mandate, in states that opt for either a “federally facilitated” Exchange or a “partnership” Exchange. The IRS rule unlawfully usurps Congress’ exclusive powers to tax, to create new legal
entitlements, to issue tax credits, and to spend federal dollars. The Act’s legislative history shows the plain meaning of the statute reflects congressional intent and offers no evidence to support claims that the plain meaning of this statute deviates from that intent. The IRS
rule does not correct a scrivener’s error. The rule neither resolves a textual ambiguity nor resolves an ambiguity regarding congressional intent—because there is no ambiguity. There is only a frantic, last-ditch
search for ambiguity by supporters who belatedly recognize the PPACA threatens health insurance markets with collapse, which in turn threatens the PPACA.

Finally, because these unauthorized entitlements would trigger unauthorized penalties against employers and individuals, we find that those employers (including state governments) and individuals could meet the requisite tests for standing and challenge the constitutionality
of this IRS rule in federal court.
Administrative agencies enjoy wide latitude to interpret and
implement federal law. But they cannot rewrite laws to impose taxes, issue tax credits, spend federal revenue, incur new federal debt, or create new legal entitlements without congressional authorization. If the PPACA imposes an unsustainable regulatory scheme on markets for
health insurance, the remedy must be found in the political process. It cannot be fixed by administrative fiat.