The Obamacare insurance exchange rule is being challenged in four cases, and each one of them has been active over the last two weeks. The IRS rule puts the Obamacare insurance subsidies, and their attendant penalties, into effect nationwide. CEI is involved in two of these cases: King v. Burwell, which we lost in the Fourth Circuit, and Halbig v. Burwell, which we won in a 2-1 D.C. Circuit panel ruling. We argue that this is contrary to the underlying statute, which provides for such subsidies only in states that have chosen to set up their own exchanges—a choice that 34 states have declined.
The King plaintiffs have petitioned the Supreme Court to review the Fourth Circuit’s ruling, which upheld the IRS rule. Last Friday the federal government filed its opposition to that request. Its arguments were relatively predictable, with one exception that we’ll get to later.
In the D.C. Circuit, Halbig is now on en banc review, with argument before the full 13-judge court scheduled for December 17. Our opening en banc brief, together with six supporting amici, was also filed last Friday.
Last Tuesday, September 30, there was a third court ruling—Oklahoma won its own challenge to the IRS rule in the Eastern District of Oklahoma. That court did an excellent critique of the dissent in Halbig, and it was also noteworthy for issuing the first “post-Gruber” ruling—that is, the first court decision to consider the recently-unearthed 2012 video that showed MIT Professor Jonathan Gruber, one of Obamacare’s chief architects, directly contradicting his current attack on our position. The video shows him flatly stating that nonparticipating states would not receive subsidies, in stunning contrast to the more recent claims, by Gruber and others, that our legal position is “crazy.” (CEI, by the way, is proud to have helped launch that video into Internet stardom just two days after the Halbig and King decisions.)
And today (October 9), there’s a court hearing in yet another state’s challenge to the Obamacare rule—that of Indiana.
So getting back to the government’s opposition to Supreme Court review of King—the one filed last Friday. It made the expected no-need-to-rush arguments about why the Court should wait until the D.C. Circuit finished its en banc review of Halbig; the issue itself supposedly didn’t require a quick resolution, and the en banc circuit might reverse the panel and thus eliminate the split with the Fourth Circuit.
But what stands out is what the brief did not do. It did not mention Jonathan Gruber at all. Gruber has been cited in every single previous government brief in King, and in the government’s major filings in Halbig. But in this latest document Gruber is gone. The same is true for the “three-legged stool” metaphor that he coined and the Economic Scholars amicus that he signed and that featured his work (and that the Halbig dissent heavily relied on). All of them are absent from the brief. Vanished. Verschwunden.
The D.C. Circuit may or may not eliminate the circuit split, but it won’t eliminate the Jonathan Gruber split.