While critics of the employer contraception mandate celebrate last week’s victory at the Supreme Court, another looming legal decision in Washington has the potential to gut the most significant components of the entire Affordable Care Act by declaring the majority of health-care subsidies illegal.
“This is a really serious one that goes to the heart of the law because it’s all about subsidies. If these subsidies aren’t legal, then all of Obamacare is really called into question,” said Grace-Marie Turner, president of the Galen Institute, a leading health policy research group.
Attorneys and activists on both sides of this debate are awaiting the ruling of a three-judge panel on the D.C. Court of Appeals in the case of Halbig v. Burwell. The plaintiffs contend the health-care law plainly states subsidies are only to be granted to those who enroll through state exchanges. However, as the result of a 2012 Supreme Court decision, 36 states opted out of that responsibility and the federal government filled the gap through its infamous exchange at Healthcare.gov.
Turner said the law is clear about how subsidies are to be distributed, and this potential court disaster is largely the result of the haphazard way the law was passed in the first place.
“This law was very sloppily written and never intended to go into effect as it was done. Because of a lot of behind-the-scenes maneuvering, we wound up basically with a draft as the law. Well, the law says that the subsidies for health insurance can only be distributed through state exchanges,” said Turner.
“That means that the folks in the 36 states that did not establish an exchange are not getting legal subsidies. It blows a hole through the middle of Obamacare. That means if the exchanges are not available, there’s no way to enforce the individual mandate or the employer mandate,” she said.
Listen to the WND/Radio America interview with Grace-Marie Turner:
Losing subsidies would mean substantially higher premiums for millions of people, but how exactly could it trigger the implosion of the key mandates? Turner said it's all in the numbers, noting that billions in subsidies and the family budgets of four to five million Americans are potentially at stake in this decision.
"On the employer mandate first, the law says that employers are only subject to the fines and penalties if any of their employees were to get a subsidy for health insurance through the exchange. If there's no exchange through which they can get a subsidy, then employers are off the hook for the employer mandate," Turner explained.
"Individuals are not required to purchase health insurance if the cost to them for the premiums would be over a certain percentage of their income. I believe it's about 8.5 percent. What this would mean is that people would then be faced with the full cost of their [premiums], not their subsidized cost. Eighty-seven percent of people getting health insurance through the exchanges are getting subsidies. They would then have to pay the full cost. For the great majority of them, that would be over the 8.5 percent of their income. Therefore, the individual mandate would not apply to them," she said.
The decision is expected any day from the three-judge panel. Turner was in the courtroom in March when oral arguments were heard. She said the judges seemed to think the law is clear on how the subsidies are to be provided.
"It really sounded to me like the judges were saying, 'You know, this is what the law says. It's not up to us to change the law. If it needs to be changed, you need to go back to Congress to do it. If it says that Congress only thought the subsidies were only going to go to exchanges established by states, you can't distribute them through an exchange established by the federal government,'" Turner said.
She is cautiously optimistic in a 2-1 decision in favor of the plaintiffs. Even if that happens, she said there would still be a long road to final resolution of this case, possibly starting with the full D.C. Court of Appeals.
"This is the court that the president has been stacking with liberal appointees," Turner noted. "I think there would not be a win in a full en banc hearing, but there are two other challenges to this, one in Oklahoma and one in Indiana, that have not been decided, either. If either one of those were to say that the subsidies are not legal, then you have a split. The Supreme Court would have to hear it, possibly next term."
According to Turner, any rebuke from the D.C. Court of Appeals would sting the administration, especially in the wake of a string of defeats at the end of the latest Supreme Court session.
"It really challenges the administration's modus operandi in deciding they're going to take the law into their own hands and rewrite the law when it suits them," Turner said. "If a court slaps them and says you're not allowed to do that, as the Supreme Court has done 13 times, then I think that it really is going to trim their sails and make it more difficult for them to make these extra-legal changes going forward. It's going to be harder and harder for them to make this law work because the law is so fundamentally dysfunctional."