Obama Admin Asks Federal Court To Revisit Potentially Deadly Obamacare Subsidy Ruling

Sarah Hurtubise | Reporter

Obama administration attorneys asked a federal court Friday to re-do its recent decision that ruled that Obamacare subsidies for customers in federally-run exchanges are illegal.

The District Court of Appeals for the D.C. Circuit ruled in Halbig v. Burwell that the phrase “established by a state,” repeated through the text of the Affordable Care Act, does in fact mean that Obamacare’s premium subsidies can only go to the 14 states that established their own state exchanges — a potentially devastating reality for the millions of Americans who purchased health coverage on HealthCare.gov with the promise that they’d receive help.

The Obama administration is asking the entire D.C. circuit to review the case again en banc, with all non-senior judges on the court issuing a decision. The administration expects that the entire panel, which includes seven judges appointed by Democrats, will be friendlier to its argument that Congress intended the subsidies to go to customers in every state.

The case is complicated by another appeals court’s ruling, however. The fourth circuit court of appeals ruled the same day in King v. Burwell, a similar case, that the subsidies were intended to go to every state, no matter who’s running the exchange. (RELATED: Second Federal Court Rushes To Save Obamacare From Devastating Ruling)

The appeals court split could make the Supreme Court more likely to take the case; the challengers asked the Supreme Court Thursday to review the case. (RELATED: Group Suing Over Obamacare Subsidies Asks Supreme Court To Hear Case) 

It’s not guaranteed that the federal court in D.C. will agree to hear the Obama administration’s case en banc — some health care experts have argued that it’s unlikely. The Supreme Court may be more likely to take up an issue that has split lower courts, but if the administration wins another hearing at the appeals court and wins the review, its possible the Supreme Court may decline to take the case at all.

But the idea that the Affordable Care Act’s text itself may not allow subsidies to go to all states is attracting increasing controversy. One of Obamacare’s chief architects, MIT economist Jonathan Gruber, made headlines this week when several reporters discovered years-old videos in which Gruber made the case that subsidies would only be given to customers in state exchanges; Obamacare sponsor former Sen. Max Baucus suggested the same in 2012. (RELATED: Obamacare Sponsor Max Baucus Also Suggested Subsidies Were Only For State Exchanges)

Gruber also notably explained why Congress would restrict the subsidies — in order to convince states that building their own Obamacare marketplace was worth it. His comments were cited in the King plaintiffs’ petition asking the Supreme Court to take the case. (RELATED: Obamacare Architect Says Again That Subsidies Were Only Supposed To Go To State Exchanges)

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