Score One For Obamacare

Score one for Obamacare. Last week, a federal court struck down one of the major legal challenges to the Affordable Care Act. Washington, D.C. District judge Paul Friedman, ruling in Halbig v. Sebelius, upheld an IRS regulation that extended the law’s insurance premium subsidies and employer mandate to the 36 “refusenik” states—those which had decided not to set up their own health insurance exchanges. Under the Obamacare legislation, subsidies were meant for users of state exchanges. But now, people in those states who sign up for health insurance on the federal exchange can get subsidies.

This was disappointing to those of us who thought the court should strike down the subsidies. But this game isn’t over. A similar case is pending in Virginia, where a decision is expected any day, and two states have filed similar legal challenges as well

My father was a litigator. I confess the one time I went to see him in court, I fell asleep. Of course what I failed to appreciate is that for a litigator to even be in court meant he probably failed somewhere along the way. Consequently, my mother purchased a small pillow which she placed prominently on their bed on which she had crocheted the word “Settle.” But when Congress passes legislation and the President signs into law something like the Affordable Care Act, which shifts billions of dollars around, upends a major sector of the U.S. economy, and permanently changes the power relationship among the government, private business and citizens, we decidedly never want have it just “settled.”

For this reason, the judicial branch plays an important rule in helping citizens uphold the rule of law, placing an appropriate check on legislative and executive overreach. Suing the government is a wonderful American tradition, used effectively (and yes, sometimes exasperatingly) by both parties and by politically diverse interest groups and activists.

Consequently, within hours of Judge Friedman’s decision, plaintiffs Jaqueline Halbig et al. filed an appeal. If, unlike Judge Friedman, Virginia Judge James Spencer rules against the government, I would expect the government attorneys to file their own appeal. And so it will likely continue over the next few months.

At first glance, the impact of the ruling is straightforward. And it’s not good. Sam Kazman, General Counsel of the Competitive Enterprise Institute, is coordinating both the Virginia and D.C. suits.  After Wednesday’s ruling he issued the following statement:

The court’s ruling today in Halbig v. Sebelius delivers a major blow to the states that chose not to participate in the Obamacare insurance exchange program. It is also a blow to the small businesses, employees and individuals who live in those states as well. In upholding this IRS regulation that is contrary to the law enacted by Congress, this decision guts the choice made by a majority of the states to stay out of the exchange program. It imposes Obamacare penalties on employers and on many individuals in those states, penalties that Congress never authorized, putting their livelihoods and the jobs of their employees at risk. Worst of all, it gives a stamp of approval to the Administration’s attempt to substitute its version of Obamacare for the law that Congress enacted.

The court does all this despite its own finding that our arguments were supported by, in its words, “the plain language” of the law’s key provision regarding state-established exchanges. And by erasing the distinction between functions carried out by states and functions carried out by the federal government on behalf of states, the ruling undercuts some basic aspects of federalism …

But at least the judge gave us a ruling on the merits, rather than holding that none of the plaintiffs had a claim suitable for adjudication. And, as I write this, I’m just getting word that the D.C. Circuit has accelerated its consideration of our motion. That is one excellent sign. A ruling on the merits boosts the prospects for a fast appeal. And, as I write this, I’m just getting word that the judge has agreed to expedite the appeal.

And that, of course, brings me back to my mother’s pillow, with its crocheted advice to “Settle.” As much as I hate to say it, Mom, that’s not good advice here. We won’t be settling this case—not by a long shot.