Editor's note: Elizabeth Slattery coauthored this piece.
When it comes to defending Obamacare subsidies, the Justice Department appears none too eager to take its case to the Supreme Court. Instead, the administration announced it would appeal Tuesday’s adverse ruling by a three-judge panel of the D.C. Circuit Court of Appeals to… the full D.C. Circuit Court of Appeals. President Obama, it seems, likes his chances with the full court. And why not? He “hand-packed” it himself.
The legal issue at hand is whether the IRS has the authority to subsidize health coverage bought through insurance exchanges run by the feds. It’s a huge question, because the feds run the Obamacare exchanges in most (27) states. Nine other states “partner” with Washington in operating their exchanges.
On Tuesday, two federal appellate courts ruled in two separate cases challenging subsidies for customers of the federally-run exchanges. The courts reached completely opposite conclusions. In Halbig v. Burwell, a three-judge panel of the D.C. Circuit said the IRS-approved subsidies violated the plain meaning of the law. Meanwhile, a three-judge panel of the Fourth Circuit concluded in King v. Burwell that the text was susceptible to multiple interpretations, so the IRS had the power to authorize such subsidies.
In fact, the statute unambiguously restricts subsidies to “insurance purchased on Exchanges established by the State.” But when more than half the states chose not to establish exchanges, the IRS effectively amended the statute with its expansive “interpretation.”
The subsidies at issue run to hundreds of billions of dollars and are critical to the implementation of Obamacare. Given the high stakes and the completely contradictory court rulings, the standard practice would be to fast-track the cases straight to the Supreme Court.
Why, then, is the administration seeking review before the full D.C. Circuit? After all, it was the D.C. Circuit that invalidated part of the administration-backed Dodd-Frank law, overturned a burdensome EPA rule regulating cross-state power-plant emissions, and ruled that President Obama’s sham “recess” appointments to the NLRB were unconstitutional.
But that was the old D.C. Circuit. Since then, President Obama has successfully packed the court with judges of his choosing.