The Obama administration hopes the latest legal challenge to the Patient Protection and Affordable Care Act never reaches Chief Justice John Roberts and his colleagues on the U.S. Supreme Court. But some legal scholars say there's reason to think that past opinions by conservative justices would support the administration's interpretation that the law allows premium subsidies through HealthCare.gov.
Last week, federal appellate courts in the District of Columbia and Virginia issued clashing rulings on the question of whether the text of the healthcare reform law provides subsidies to buy insurance through the federal exchange serving 36 states, rather than providing them solely though state-established exchanges. The D.C. court, in a 2-1 panel ruling in Halbig v. Burwell, held that the law clearly does not allow subsidies through the federal exchange and therefore the Internal Revenue Service could not interpret the law to permit them. In contrast, the Virginia court panel unanimously ruled in King v. Burwell that the law was ambiguous and the agency therefore had the authority to allow subsidies.
Based on the split rulings, the issue may be headed to the high court, which could rule by next June—by which time millions of Americans in the 36 states will be receiving substantial premium assistance.
Even though the high court often issues decisions involving statutory interpretation, few legal experts would go on record predicting how the majority would rule, particularly given the political polarization around Obamacare. “I think it could go either way,” said George Mason University law professor Ilya Somin, an adjunct scholar at the libertarian Cato Institute, which supported the challenge to the subsidies. “You have reasonably plausible arguments on both sides, and obviously you have an argument that is very politically charged.”
The legal question centers on the precise wording in the ACA describing eligibility for the subsidies. The law says subsidies to purchase insurance through an exchange will be provided to individuals and families who got insurance “through an exchange established by the state.” The IRS issued a rule interpreting that to mean any health insurance exchange, not just the state-run exchanges.