The arguments on Obamacare’s contraception mandate weren’t the only heard about the law on Tuesday. The D.C. Circuit Court of Appeals heard arguments in another case yesterday, Halbig v. Sebelius, that could bring down Obamacare.
At issue is whether the Obama administration can legally provide tax subsidies to residents of states that haven’t established exchanges. This is a scenario that lawmakers didn’t anticipate. They didn’t expect state resistance to the law, and didn’t foresee the creation of a federal exchange.
A reading of the statutes in question (§1311 and §1321) confirms that the subsidies were meant to apply only to states with an established exchange, but the Internal Revenue Service illegally wrote rules to apply the subsidies to apply to the federal exchange as well.
Based on reports from those who witness oral arguments in the Halbig case yesterday, the challenge may well prove successful, at least temporarily:
Judge A. Raymond Randolph indicated he felt the statute was quite clear in repeating “seven times” in that section that the subsidies are available only “through an Exchange established by the State.” He indicated that it “is not up to the courts to fix” a problem that Congress may have created for itself. (Nor, we might add, is it up to the IRS to rewrite the statute in its regulatory interpretation.)