King v. Burwell is the case the Supreme Court agreed to hear involving Obamacare subsidies on federal exchange.
You will recall that the legal issue is whether the IRS violated the express provisions of Obamacare by issuing rules allowing taxpayers to claims federal subsidies when purchasing on the federal exchange, even though the language of the statute appears not to allow that.
In King,
the Fourth Circuit ruled that there was possible ambiguity and another potential reading of the law, such that apparently clear language was not that clear, giving the IRS leeway to interpret the statute. In another case,
Halbig v. Burwell, a D.C. Circuit panel had ruled that the subsidies were not available on the federal exchange, but that ruling was vacated pending the entire D.C. Circuit Court hearing the case en banc.
In a surprise move, the Supreme Court agreed to hear the King case even though there was no split in the Circuits (after the Halbig decision was vacated).
King will be one of the biggest decisions of this term, and if the Obama administration loses the case, it could be the death of Obamacare as we know it, because 37 states have refused to create state exchanges. Obamacare is affordable only with subsidies, and if the subsidies are not available to citizens of 37 states, the system likely collapses.
One key issue is whether the wording of the statute was a mistake or misstatement, or reflected a logical policy. Obamacare was set up in such a way as to put pressure on states to create state exchanges by providing for federal subsidies in the form of tax credits only for purchases on state exchanges. This was a conscious decision, as explained by
none other than Jonathan Gruber:
Into the fray leaps Mark Levin and his Landmark Legal Foundation, which just filed a friend of the court,
Amicus Curiae Brief. The full Brief is embedded below.