Lawyers: Send Obamacare Subsidies Case Straight To Supreme Court

Sarah Hurtubise | Reporter

Attorneys who just won a court case arguing that Obamacare restricts premium subsidies to state-run exchanges are asking a federal court not to rehear the case at the Obama administration’s behest. 

The plaintiffs in Halbig v. Burwell won the case in the U.S. Court of Appeals for the District of Columbia with a standard three-judge panel, which determined that the text of the Affordable Care Act allows taxpayer subsidies to go only to customers of state-run exchanges. The Obama administration quickly asked the appeals court to rehear the case with all the judges participating. (RELATED: Federal Court Takes Down Obamacare: Subsidies In Federal Exchange Are Illegal)

Such a rehearing, called an en banc review, is rare — but would allow the Obama administration another chance to win the case at the appeals court level. As Democratic presidents have appointed a majority of D.C. court’s judges, the administration is optimistic about its chances with the full court. (RELATED: Obama Admin Asks Federal Court To Revisit Potentially Deadly Obamacare Subsidy Ruling) 

Experts are split on whether the court will agree to hear the case all over again, but the plaintiffs’ lawyers say the court should take a backseat and let the Supreme Court finish the case instead.

Just hours after the D.C. circuit court ruled that subsidies were illegal in the federal exchange, the U.S. Court of Appeals for the Fourth Circuit ruled in favor of the Obama administration in a similar case in King v. Burwell. The surprising split in the circuit court decisions makes it even more likely that the Supreme Court will take the case.

En banc reconsideration by the full Circuit would only delay a final resolution of this incredibly important issue,” said Sam Kazman, general counsel for the Competitive Enterprise Institute, a nonprofit that is coordinating both cases. “We submit the D.C. Circuit should either deny the government’s request for en banc reconsideration or else delay acting on that request until the Supreme Court decides on whether to review the King case, which we have already appealed to that court.”

The vast majority of Obamacare customers have signed up in federally-run exchanges with the expectation that they’re eligible for taxpayer subsidies. Were the Supreme Court to side against the Obama administration, it’s not clear whether Congress would be able to easily restructure subsidies or whether millions of Americans would be liable for the full cost of their health coverage. 

But the question grew even more controversial after the two court decisions were released, when bloggers discovered several tapes of the Obama administration’s chief Obamacare architect, MIT economist Jonathan Gruber, admitting that only state exchanges were eligible to give out premium subsidies and reasoning that this was a strategy to convince states to build their own exchanges. (RELATED: Obamacare Architect Says Again That Subsidies Only Go To State Exchanges)

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