On the same day the Supreme Court heard oral arguments in Sebelius v. Hobby Lobby, a significant reproductive rights case under the Affordable Care Act (ACA), right-wing media continued to push discredited misinformation about a different ACA case that could do even more damage to health care reform.
On March 25, the D.C. Circuit Court of Appeals (finally fully-staffed) heard oral arguments in Halbig v. Sebelius. Unlike Hobby Lobby, Halbig has the potential to undermine the ACA as a whole by rendering the new federal health insurance marketplaces of the exchanges useless.
Since 2012, right-wing media have engaged in a loud campaign to push this challenge all the way to the conservative justices of the Supreme Court, even though legal experts agree this lawsuit is far-fetched and a distortion of the text, history, and purpose of the ACA. In the wake of yesterday's appellate arguments, conservative media is continuing to lecture Congress that legislators really meant to counter-intuitively destroy the ACA when they passed it, a bizarre argument that the editors of the National Review Online claimed “Democrats might have anticipated if they'd bothered reading the law.” The Wall Street Journal took it as an opportunity to again accuse Obama of executive overreach, and invited the judiciary to “check on those abuses” and “vindicate the rule of law” by rewriting history to pretend Congress never intended tax credits in the federal exchanges.
A federal district court has already ruled against this unlikely argument, holding their “unpersuasive” legal theory about Congress' true intention contrary to common sense, because it would lead to “strange or absurd results.”
The already-rejected theory behind Halbig is that the IRS never actually had the legal authority to offer tax subsidies to consumers who purchase health insurance on the federal exchange because Congress specifically wanted the federal exchanges to be unaffordable as an incentive for states to set up their own. But as Constitutional Accountability Center's Senior Counsel Simon Lazarus explained, "[t]o believe their argument, you have to believe that Harry Reid and Chuck Schumer and Patty Murray and Max Baucus got together off the Senate floor one day and said, 'I know what we'll do to convince these states that they should set up exchanges: We'll give them the power to completely destroy at least the exchange portion of Obamacare in their states' ... People think a lot of things of those individuals, but dumb is not one of them."
The idea that these tax subsidies are illegal is the pet project of Jonathan Adler, a contributor to National Review Online and to The Washington Post's new libertarian blog the Volokh Conspiracy, and Michael F. Cannon of the conservative Cato Institute. It's no surprise, then, that both of those right-wing media outlets have dedicated a fair amount of bandwidth to hyping Halbig and the legal arguments they helped formulate.
At the end of the day, all of these arguments boil down to the contention that an obvious drafting error in a massive bill that was hamstrung by Republicans during the legislative process was actually an intentional flaw. Adding to the slew of legal and health experts who helped craft the law or reported on it, Yale Law Professor Abbe Gluck recently explained why this legal challenge makes no sense. From The New England Journal of Medicine:
If successful, the challenge -- initiated by some of the same lawyers involved in the ACA challenge that reached the Supreme Court in 2012 -- would severely impede the statute's goals. In just the first 3 months of enrollment, 1.2 million people have signed up for insurance through federally run exchanges, 80% of them receiving subsidies.
The problem for the government is that the ACA is not a cleanly drafted statute but rather the victim of a highly complex legislative process. The section at issue in this case is one of many instances of less-than-ideal drafting. The statute calls for the subsidies to be calculated on the basis of the costs of the plans enrolled “through an Exchange established by the State under section 1311” of the ACA. The challengers argue that this text excludes individuals enrolled through federally operated exchanges from receiving assistance.
Although that argument might be superficially appealing, the D.C. court was correct to reject it. As the court recognized, this provision cannot be read in isolation. The Supreme Court has long applied a rule that statutes are to be interpreted as a whole and in context, to provide the best indication of Congress's intent. Here, the court concluded that many other provisions make clear that Congress intended for the subsidies to be available on state and federal exchanges alike.
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[T]he case is as much about the divisive politics of health care reform as about the difficulties of implementing massive federal laws. This challenge is part of a broad strategy to topple the law at any cost. Other legal cases are en route to the Supreme Court, including the challenge to the regulation involving the coverage of contraception without patient copayments, and some of these cases do raise unresolved legal questions. But the subsidy challenge is more fundamental -- 73% of the Americans who are eligible for subsidies live in states with federally run exchanges -- even though it stands on much weaker legal ground than some other challenges that have been brought.
Not only do legal experts agree that this challenge is far-fetched, legislators who drafted the law have repeatedly refuted the notion that Congress intended tax subsidies to be available only for insurance purchased on the state exchanges. This evidently is of no concern to right-wing media, who will likely continue to celebrate this effort to make health insurance completely unaffordable until the Supreme Court weighs in.