Fox News was quick to celebrate a federal appellate court's split decision striking down a crucial part of the Affordable Care Act (ACA), even though that ruling was almost immediately rebuked by the Fourth Circuit Court of Appeals, consistent with the decisions of two other federal courts and the widespread opinion of legal experts. 

On July 22, the D.C. Circuit Court of Appeals issued its decision in Halbig v. Burwell, with the two Republican appointees on the three-judge panel holding that a provision of the ACA counterintuitively makes health insurance unaffordable for millions of Americans by prohibiting the IRS from providing tax credits to consumers who live in states that refused to set up health insurance exchanges. Those consumers must instead buy insurance from the federal exchange website, and many had relied on the tax credits to reduce the cost of insurance. The legal theory behind this lawsuit -- that the “Affordable Care Act” would somehow decline to provide affordable care to its intended beneficiaries -- has been hyped by right-wing media since the lawsuit was filed. National Review Online called the suit "ingenious," and Washington Post columnist George Will claimed that the IRS's clarification that tax credits are available in both state and federally-run health care exchanges was an example of the agency's “breezy indifference to legality.”

Fox News immediately jumped on board with the two Republican judges' validation of this right-wing legal challenge, despite the dissent's warning that “this case is about Appellants' not-so-veiled attempt to gut” the ACA rather than sound statutory interpretation.

On the July 22 edition of Outnumbered, the panel accused the Obama administration of “ignoring the ruling of the D.C. Circuit” by announcing that it would unremarkably continue to provide the subsidies while the case was appealed, but still complained about the cost of premiums that will go up if subsidies are eliminated. Co-host Harris Faulkner complained that the ruling “reminds me of the infamous quote, 'if you like your doctor, you can keep it'” since consumers may not be able to obtain cost-saving tax subsidies in the wake of the Halbig decision. Neither Faulkner, nor any of her co-hosts, mentioned the right-wing origins of this suit -- or the fact that the express purpose of Halbig and other cases like it, was to "stop the Obama health care law" by making it too expensive for consumers to purchase without tax credits.

Three other lawsuits similar to Halbig were filed across the country, but many legal experts have dismissed them as "deeply flawed," and "an absurd distortion of the law." Several lower courts have also rejected the questionable legal theory the suits are based on as a semantic argument over a potential drafting error, despite the unambiguous intent of the law as a whole -- to make health insurance affordable for everyone, not just those lucky enough to live in states with local exchanges. Yet the D.C. Circuit Court embraced these right-wing arguments, holding that “the results produced by giving the [tax credit provision] its plain meaning seem sensible, not absurd,” before going on to conclude that “the legislative record provides little indication one way or the other of congressional intent.” This latter assertion ignores the extensive history of the ACA and the basic mechanics of health care reform that shows Congress' clear intent to provide affordable health care to all Americans. As Judge Harry Edwards' explained in his dissent in Halbig:

There are three critical components to the ACA: nondiscrimination requirements applying to insurers; the “individual mandate” requiring individuals who are not covered by an employer to purchase minimum insurance coverage or to pay a tax penalty; and premium subsidies which ensure that the individual mandate will have a broad enough sweep to attract enough healthy individuals into the individual insurance markets to create stability. These components work in tandem. At the time of the ACA's enactment, it was well understood that without the subsidies, the individual mandate was not viable as a mechanism for creating a stable insurance market.

Appellants' proffered construction of the statute would permit States to exempt many people from the individual mandate and thereby thwart a central element of the ACA. As Appellants' amici candidly acknowledge, if subsidies are unavailable to taxpayers in States with HHS-created Exchanges, “the structure of the ACA will crumble.” It is inconceivable that Congress intended to give States the power to cause the ACA to “crumble.”

[...]

Appellants attempt to fortify their position with the extraordinary argument that Congress tied the availability of subsidies to the existence of State-established Exchanges to encourage States to establish their own Exchanges. This claim is nonsense, made up out of whole cloth. There is no credible evidence in the record that Congress intended to condition subsidies on whether a State, as opposed to HHS, established the Exchange.

But Fox seemed happy to ignore not only the substantive weakness of the legal argument that was accepted by the divided D.C. court, but also the fact that it was almost immediately rejected by the Fourth Circuit Court of Appeals. Just hours after the D.C. Circuit ruled in Halbig, the Republican appointees found themselves in the minority among appellate judges ruling on this right-wing challenge, when the Fourth Circuit unanimously held the exact opposite in King v. Burwell. The court held that the IRS's interpretation of the ACA subsidy provision was “a permissible exercise of the agency's discretion.”

Judge Andre Davis' concurrence went on to call the anti-ACA argument “cramped,” and broke down why the legal challenge made no sense:

No case stands for the proposition that literal readings should take place in a vacuum, acontextually, and untethered from other parts of the operative text; indeed, the case law indicates the opposite. So does common sense: If I ask for pizza from Pizza Hut for lunch but clarify that I would be fine with a pizza from Domino's, and I then specify that I want ham and pepperoni on my pizza from Pizza Hut, my friend who returns from Domino's with a ham and pepperoni pizza has still complied with a literal construction of my lunch order. That is this case: Congress specified that Exchanges should be established and run by the states, but the contingency provision permits federal officials to act in place of the state when it fails to establish an Exchange. The premium tax credit calculation subprovision later specifies certain conditions regarding state-run Exchanges, but that does not mean that a literal reading of that provision somehow precludes its applicability to substitute federally-run Exchanges or erases the contingency provision out of the statute.

It is likely that the Supreme Court will hear Halbig or a similar case in the next two terms, a chance for the justices to ensure that health insurance does not become wildly unaffordable for 4.7 million consumers based on a historically revisionist and far-fetched right-wing legal attack.