The D.C. Circuit's decision Tuesday morning in Halbig v. Burwell is a major victory for the rule of law. And correspondingly, the Fourth Circuit's contrary ruling hours later, in King v. Burwell, is a loss.
Under the Constitution, Congress is responsible for making the law while the president must faithfully execute it. With a statute as complex as the Affordable Care Act, it's tempting for the administration to bend it for policy reasons. But, as the D.C. Circuit ruled, this is flatly illegal.
The critical language of the ACA says individuals are entitled to federal subsidies only for health insurance purchased through "an exchange established by the state." This means individuals are entitled to subsidies only if their states chose to establish their own insurance exchanges, rather than default to the federal HealthCare.gov exchange that operates in "refusenik" states that chose not to participate.
By structuring the law this way, Congress gave the states an incentive to establish their own exchanges — and thereby avoided a national exchange that would have been costly, difficult and politically toxic. As the huge problems that have plagued HealthCare.gov demonstrate, Congress, at least in this respect, got it right.
The administration wanted to subsidize insurance across the board. Through the IRS, it promulgated a rule that essentially ignored the basic congressional distinction between state and federal exchanges.
Some critics of the D.C. Circuit ruling argue that it's based on a glorified "typo." That's absolutely false. The state-federal distinction, as one judge pointed out at the court hearing, appears in the ACA seven times.
If that needs fixing, then it's up to Congress and only Congress to fix it. Those who claim this is a typo need to learn more about both the law and about typography.
Sam Kazman is general counsel of the Competitive Entreprise Institute, a free-market advocacy organization that coordinated and funded both the Halbig and King cases.