Democrats, Insurers Back White House in ACA Subsidies Lawsuit

Democratic leaders and America's Health Insurance Plans this week filed a pair of amicus briefs in support of the Obama administration in a lawsuit alleging that the Affordable Care Act's subsidies to help U.S. residents purchase health coverage are illegal in the federal exchange, the Washington Times reports (Howell, Washington Times, 2/18).

Background on Lawsuit

The lawsuit -- Halbig v. Sebelius -- targets a May 2012 Internal Revenue Service rule governing the federal exchange and the subsidies. The suit's 12 plaintiffs -- including a hospital chain and a restaurant franchise -- argue that the IRS rule should be invalidated because it contradicts what Congress originally intended. Numerous ACA opponents have said that the IRS exceeded its legal authority by establishing a rule permitting the subsidies to be available through the federal exchange.

U.S. District Court Judge Paul Friedman last month ruled against the plaintiffs, stating that both the text of the ACA and the law's structure "make clear that Congress intended to make premium tax credits available on both state-run and federally facilitated exchanges." The plaintiffs filed an appeal following Friedman's ruling (California Healthline, 1/16)

Details of Amicus Briefs

On Tuesday, the Constitutional Accountability Center filed an amicus brief in support of the Obama administration.  The brief was signed by a number of prominent Democrats, including:

• Former Senate Finance Committee Chair Max Baucus (Mont.);
• Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (Iowa)
• Rep. Sandy Levin (Mich.);
• Rep. George Miller (Calif.);
• House Minority Leader Nancy Pelosi (Calif.);
• Senate Majority Leader Harry Reid (Nev.); and
• Rep. Henry Waxman (Calif.) (Lillis, "Healthwatch," The Hill, 2/18).

In addition, 125 state legislators signed CAC's brief (Attias, CQ Roll Call, 2/18).  

Meanwhile, AHIP filed a brief this week stating that stopping federal subsidies would upset the structure of the ACA. AHIP officials said they are supporting the Obama administration in this case because the tax credits allow for affordable insurance and work with the law's individual mandate.

The appeals court is scheduled to hear oral arguments on the lawsuit on March 25 (Washington Times, 2/18).