"The president has been spending money illegally, the court has ruled," said Michael Cannon, director of Health Policy Studies at the Washington, D.C.-based Cato Institute, in a briefing. An article by Mr. Cannon and economist Jonathan Adler led to the Halbig filing.
In a statement, Sen. Ted Cruz (R-Tex.), who filed a friend of the court brief in King v. Burwell, said that the D.C. Circuit’s decision "is a repudiation of Obamacare and all the lawlessness that has come with it."
The plaintiffs in King v. Burwell, however, were handed a setback by the 4th Circuit. The four individual plaintiffs, all of whom live in Virginia, which does not have a state-run exchange, did not want to be forced to buy health insurance, but said that if they didn’t, they’d be penalized. Since the ACA will give them a subsidy to buy coverage, they would be forced either to buy insurance or pay a penalty for not having coverage, they said.
They added that Congress said that only state-run marketplaces could receive federal subsidies.
The judges ruled against them, saying "we are not persuaded by the plaintiffs’ ‘coercion’ argument." They did say, however, that there was some confusion in the law. "We cannot discern whether Congress intended one way or another to make the tax credits available on HHS-facilitated exchanges," they wrote, adding that "the relevant statutory sections appear to conflict with one another, yielding different possible interpretations."
But in the end, the judges concluded that it was "clear that widely available tax credits are essential to fulfilling the Act’s primary goals and that Congress was aware of their importance when drafting the bill." Therefore, the Internal Revenue Service’s rule authorizing tax credits was "a permissible exercise of the agency’s discretion."
Mr. Cannon of the Cato Institute said that he views the 4th Circuit ruling as a kind of loss for the Obama administration because the judges said that the language in the ACA was ambiguous on the subsidies.
Families USA’s Ron Pollack, however, said that he thought the administration would ultimately prevail.
"As of today, eight judges – two federal district court judges and six appellate judges – have ruled on these challenges. Altogether, six judges have ruled that the cases should be dismissed, and only two have upheld plaintiffs’ claims," he said in a statement.
There are still more legal proceedings to be decided before there is a definitive answer on whether the subsidies – and the ACA itself – are legal. The full D.C. Circuit has to choose whether to hear the Halbig case, and the plaintiffs in the 4th Circuit could also ask for a hearing by the full panel of judges.
There are two additional major cases questioning the legality of the subsidies pending at the appeals court level.
One or all of the cases could be taken to the U.S. Supreme Court.
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