Obama Administration Seeks Full-Court Review of Halbig Ruling
The Obama administration on Friday appealed a federal court panel's ruling that subsidies cannot be given to U.S. residents who purchase coverage through the federal insurance exchanges, Politico reports (Cunningham, Politico, 8/1).
Halbig v. Burwell targets a May 2012 Internal Revenue Service rule that allows subsidies to be offered through the federal exchanges.
The suit's 12 plaintiffs -- including a hospital chain and a restaurant franchise -- argued that the IRS rule should be invalidated because it contradicts what Congress originally intended in the ACA. Numerous ACA opponents also have argued that IRS exceeded its legal authority by issuing the rule.
Two judges on a three-judge panel for the U.S. District Court of Appeals for the District of Columbia wrote that the ACA "does not authorize the IRS to provide tax credits for insurance purchased on federal exchanges." Instead, the law "plainly makes subsidies available only on exchanges established by states."
However, a dissenting opinion filed by Judge Harry Edwards called the case an "attempt to gut" the ACA and said the majority opinion "defies the will of Congress" (California Healthline, 7/23).
Petition to Court
In a petition, the Department of Justice asked for an en banc -- or full court -- review of the decision.
DOJ wrote, "The majority erred by purporting to discern the plain meaning of one provision before considering all relevant provisions of the act" (Politico, 8/1). It added that the ruling, if sustained, would impose severe financial hardships on millions of consumers who receive the subsidies (Yost, AP/Yahoo! News, 8/1).
A senior administration official said, "We believe that this decision is an outlier and the full Circuit Court will agree with Congress and common sense," adding, "This litigation should be seen for what it is -- another partisan attempt to undermine the" ACA.
DOJ's petition came after plaintiffs in a similar case with a conflicting ruling -- King v. Burwell -- asked the Supreme Court to review the issue (Politico, 8/1).
DOJ wrote in the petition that "the panel majority's erroneous interpretation" in the Halbig ruling threatened "disruption" while setting up a "direct conflict with King" that establishes "a question of 'exceptional importance' warranting en banc consideration."
According to The Hill, a majority of the D.C. appeals court's judges must vote to rehear the case.
A DOJ official said, "It is unclear when we might have a decision on whether [the court will] hear the case en banc, given they would likely give the other side at least a few weeks to craft a response brief and then additional time would be taken to review the briefs before [the] decision is made" (Al-Faruque, The Hill, 8/1).
Likelihood of Supreme Court Review
According to National Journal, plaintiffs in the cases are trying to act quickly because the current split rulings increase the chance the Supreme Court will take up the case. The Journal notes that if a full review by the D.C. appeals court ends in favor of the Obama administration, the conflict would no longer exist and the chances the high court would hear the case would be reduced (Baker, National Journal, 8/1). Washington & Lee University Law School professor Timothy Jost said, "The Supreme Court almost never" hears a case unless there is "a circuit split of a decision upholding [a] federal rule" (Reichard, CQ HealthBeat, 8/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.