In Halbig v. Burwell, the D.C. Circuit Court of Appeals held that under the Affordable Care Act federal health insurance subsidies are available for policies purchased only on state exchanges and not those purchased on the federal exchange.
If the Supreme Court takes the case, it will also have a rich opportunity to slap down the out-of-control, politicized Internal Revenue Service. Under this administration, the IRS has behaved as though it were a super-legislature with authority not just to promulgate regulations beyond its narrowly prescribed statutory power, but also to change laws wholesale in order to serve the administration's policy ends.
A proper wrist slapping of the IRS might well send a long overdue message to all federal administrative agencies -- take the renegade EPA, for example -- that they don't have carte blanche to do whatever they decide to do.
The ACA provides for the establishment of state exchanges through which consumers can purchase health insurance. The law did not make the establishment of such exchanges mandatory, and only 14 of the 50 states did so.
The law, in a separate section, also provides for the establishment of a federal exchange through which consumers can purchase health insurance in the event their state opts not to establish an exchange.
That's just half the story. President Obama and his Obamacare architects wanted subsidies (in the form of tax credits) to be provided to people who purchase Obamacare policies. The subsidies would shift the cost of the policy from the individual to the government -- thus, the proverbial "free health care."
Here's where it gets tricky. The law says the "subsidy" is available only for policies purchased through the state exchanges and not the federal exchange. Honest readers of the law and of the political considerations behind the relevant provisions must concede that the law was carefully drafted with this distinction in mind. There was a deliberate intent to make the subsidies available only for purchases through the state exchanges.
There are two salient sets of facts that make this clear. The first is the unambiguous statutory language. The law provides for subsidies to those who purchase policies from an "exchange established by the state." There is no mistaking the plain meaning of those words.