Supreme Court Review Sought in Obamacare Exchange Case


Washington, July 31 — Today, attorneys in the U.S. Court of Appeals for the Fourth Circuit's Obamacare case, King v. Burwell, requested Supreme Court review of the ruling handed down last week. The case challenged an IRS rule that provided insurance premium subsidies to all states, regardless of whether or not those states chose to establish their own Obamacare insurance exchanges.

The IRS rule was upheld by the Fourth Circuit on July 22, 2014; however, less than two hours before it ruled, the U.S. Court of Appeals for the D.C. Circuit struck down the rule in a similar case, Halbig v. Burwell. The Justice Department is expected to appeal that decision but has not yet done so. Michael A. Carvin of Jones Day is the lead counsel for the plaintiffs in both cases, who consist of individuals and small business owners. The Competitive Enterprise Institute (CEI) is coordinating and funding the cases.

“From the time these cases were first filed, we’ve tried to get this issue resolved as quickly as possible for the plaintiffs and the millions of individuals like them,” said CEI general counsel Sam Kazman. “A fast resolution is also vitally important to the states that chose not to set up exchanges, to the employers in those states who face either major compliance costs or huge penalties, and to employees who face possible layoffs or reductions in their work hours as a result of this illegal IRS rule. Our petition today to the Supreme Court represents the next step in that process.”

The plaintiffs in the King case argued the Obamacare statute drew a clear distinction between state-established exchanges and those set up by the federal government in nonparticipating states. They contended Congress permitted subsidies only for states with their own exchanges, as a way of encouraging state participation. To the surprise of many, however, 36 states are not participating. 

Two days after the rulings, CEI also brought to light a 2012 videotape in which one of Obamacare’s chief architects, MIT professor Jonathan Gruber, flatly stated that nonparticipating states would not receive subsidies. This contradicts the current claim by the government: that Congress never intended to withhold subsidies. 

“On Obamacare, last week started with a circuit split and ended with a Jonathan Gruber split. Our hope is the Supreme Court will at least resolve the former,” said Mr. Kazman.

 > Read the full petition here.