DC Circuit Court Will Rehear Obamacare Subsidies Case

Font Size:

The D.C. Circuit Court will hear the court case over the legality of Obamacare subsidies in the federal exchanges all over again, the court announced Thursday.

At risk are premium tax credit subsidies for Obamacare customers using federally-run exchanges. The text of the Affordable Care Act which authorizes the subsidies states that the funding should go only to customers in exchanges “established by the State,” leading the plaintiffs in Halbig v. Burwell to argue that subsidies are illegal for federal customers — which account for the vast majority of Obamacare enrollees nationwide.

While the D.C. Circuit originally voted 2-1 in favor of Halbig, the Obama administration quickly moved to ask the court hear the case over. The Department of Justice requested that the D.C. Circuit decide the case over again in a rare en banc hearing, which are only granted in exceptional cases.

All 11 active judges, as well as two senior judges who heard the original case, will hear Halbig v. Burwell over again in December. The Obama administration expects to be luckier in the rehearing, because the full court appears to lean left. The case will now be heard by eight Democratic-appointed judges and five Republican-appointed judges. (RELATED: Federal Court Takes Down Obamacare: Subsidies In Federal Exchange Are Illegal)

The textual legal battle has grown extremely controversial. After the D.C. Circuit handed down its opinion, several reporters belatedly discovered footage of MIT professor Jonathan Gruber, a chief architect of Obamacare, which appeared to support the plaintiffs case. Gruber apparently stated in 2012 that the distinction functioned to incentivize states to create their own health-care exchanges — putting more substantial weight behind the plaintiffs arguments. Gruber has sided with the Obama administration’s interpretation of the clause, however, and signed a legal brief to that effect. (RELATED: Obamacare Architect Says Again That Subsidies Were Only Supposed To Go To State Exchanges)

But a second court case, King v. Burwell, was the most likely to help send the subsidies question to the Supreme Court. The Fourth Circuit Court ruled in favor of the Obama administration in King, creating a circuit court split and potentially making the top court more likely to issue a final determination.

If the D.C. Circuit rules in favor of the Obama administration in December, the split would be rectified and it’s possible the Supreme Court may be less likely to take the case.

Follow Sarah on Twitter