There are many reasons the oral arguments over the Hobby Lobby case got vastly more attention yesterday than the simultaneous hearing of a claim that Obamacare subsidies could only be received by people participating in state-run purchasing exchanges. Most obviously, Hobby Lobby was before the Supreme Court; Halbig v. Sebelius was before a three-judge panel of the D.C. Court of Appeals, renowned among lawyers but not so much journalists. Hobby Lobby involves the Constitiion, religion and the sex lives of many people; Halbig is a case of statutory interpretation.
But if Halbig goes the wrong way, the whole architecture of the Affordable Care Act could be destroyed. I honestly don’t know what would happen, after the wild celebrations on the Right subsided, given the ability and determination of Republicans to stop any effort to “fix” the language in the ACA that authorized subsidies for state exchange purchases but did not mention federal exchange purchasers. After all, it was a Republican filibuster (renewed when Scott Brown won that special election in 2010) that made it impossible to hold the normal House-Senate conference committee during which drafting anomalies like this are usually resolved. It might just prove to be the time bomb that finally detonated.
Here’s TNR’s Alec MacGillis on how the Halbig arguments went yesterday:
The challenge has lost twice at the federal trial court level, before a Reagan-appointed judge in Virginia and before Clinton-appointed Judge Paul Friedman in Washington, who ruled that the intent of the law was plain. “Plaintiffs’ proposed construction in this case—that tax credits are available only for those purchasing insurance from state-run Exchanges—runs counter to this central purpose of the ACA: to provide affordable health care to virtually all Americans,” he wrote. “Such an interpretation would violate the basic rule of statutory construction that a court must interpret a statute in light of its history and purpose.” Under the challengers’ logic, he added, the exchanges administered by the federal government “would have no customers, and no purpose.”
But the two Republican-appointed judges hearing the appeal of Friedman’s ruling today were far more sympathetic to the challengers’ case. Especially receptive was Judge Raymond Randolph, a George H.W. Bush appointee who was harshly dismissive of administration lawyer Stuart Delery’s arguments, to the point of being openly derisive. Countering the administration’s argument that the challengers’ logic would lead to absurd conclusions within the law, Randolph shrugged and said, “There is an absurdity principle, but not a stupidity principle. If the legislation is just stupid, it’s not up to the court to save it.” He saw no way for the government to get around the line stating that the subsidies are to be available on state-established exchanges: “What we’ve got here is language that doesn’t seem to be malleable in any way, shape or form.” He rejected the administration’s point about the IRS reporting requirements for the exchanges buttressing its case by casting those requirements as being a lesser part of the law because they were in the supplementary package that was added to the law before its final passage under the budget reconciliation process, which he dismissed as a mere “amendment” to the law.
With the panel’s lone Democratic appointee clearly sympathetic to the administration’s case, the ruling will come down to Judge Thomas Griffith, a George W. Bush appointee who, while less mocking than Randolph, was also skeptical of the administration’s defense. He called the legislative history around the law a “wash” between the two sides, undermining the administration’s claim that the intent of Congress was abundantly clear. At the same time, he said the administration had a “special burden” to show that Congress intended federally-run exchanges to offer subsidies, given the “plain language” to the contrary in the line under dispute. “If [Congress doesn’t] legislate clearly enough, is it our job to fix the problem?” Griffith asked.
As MacGillis notes, an adverse decision by this panel could be appealed by the government to the full D.C. Circuit, and the disposition of similar cases in other Circuits could differ enough that the whole case winds up before the Supremes. This will all take time, which means the Affordable Care Act would continue to operate for a good while, becoming part of people’s lives—a fact no court could completely ignore. That, along with the absurdity of stipulating that Congress passed a gigantic landmark piece of legislation designed not to work at all, is probably the best defense for ACA against this particular attack.
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