Obamacare Subsidies Could Still Face Supreme Court
Policy + Politics

Obamacare Subsidies Could Still Face Supreme Court

While a federal circuit court delivered some potentially good news for Obamacare on Thursday by throwing out an earlier ruling against the administration in the case of Halbig V. Burwell, some legal experts are still convinced the law will head back to the Supreme Court.

If that happens, the Affordable Care Act, known as Obamacare, could be in jeopardy.

The legal issue centers on whether subsidies provided to people who signed up for coverage through the federal exchange are valid. The law’s language clearly states that subsidies would be available to “those enrolled through an Exchange established by the State.”

Related: Obamacare Could Go Back to the Supreme Court

Four cases have challenged the law’s language, saying people on the federal exchange should not be receiving subsidies.

In July, a three-judge panel for the D.C. Circuit Court of Appeals ruled against the administration saying Obamacare’s subsidies distributed through the federal exchange were invalid.

The panel’s decision was at odds with a separate ruling on the matter by the Fourth Circuit, which ruled in favor of the administration. The dueling court rulings, at the time, positioned the case to be heard before the Supreme Court.

On Thursday, the DC Circuit Court of Appeals announced it would rehear the case en banc, meaning all 11 judges would review the case. And since the majority of the bench is made up of democratic appointed judges, many following the case expect the court to side with the administration. If this happens and there are no dueling Circuit Court rulings on the case, some experts say it has less of a chance to be reviewed by the Supreme Court.

Related: Obamacare Subsidy Overpayments: How to Recoup? 

Others disagree, and think the case will eventually end up in front of the SOTUS, regardless. 

Mark Rust, the managing partner of the Chicago office of Barnes & Thornburg, LLP, says he is quite confident that the Supreme Court will likely hear the case on Obamacare subsidies due to its high profile and national policy implications. He also pointed out that there are still at least two other Circuit Courts that have yet to offer rulings on the matter.

“The bottom line is that the Supreme Court will likely be interested in considering the case, especially in this environment of ongoing complaints over the president’s use of regulatory power,” Rust said, noting that only four justices have to agree to hear the case.

He added that if the Supreme Court does indeed hear the case, he expects Chief Justice John Roberts to be “a literalist on the statute.” 

“The only question to be asked is, is the language plain or is it not…Right away in Section 13-11 of the law, it starts right out saying ‘states shall establish an exchange’…  it’s pretty doggone clear,” Rust said.

He went on to say it would ultimately rest with Congress to change the language of the law to include the federal exchange.

If the Supreme Court strikes down the subsidies, Rust said lawmakers will have an incentive to take action quickly, since “it will be a live issue during the 2016 presidential election, and that won’t be good politically for anyone—especially politicians who are anti-ACA, since their constituents will be the ones losing their subsidies.”

For now though, lawyers say regardless of how any of the Circuit Courts rule, people should still be able to receive subsidies in the fall, and will be able to continue doing so unless the Supreme Court strikes that down. 

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