Two major conflicting rulings on Obamacare

In April, I wrote about a legal challenge to Obamacare in which opponents had argued that the text of the ACA law only allowed state health exchanges to provide subsidies for the health insurance premiums and that the federal government should not have been allowed to provide subsidies through its own exchanges in those states that decided against setting up their own exchanges.

Today we had two conflicting appeals court rulings. In the DC circuit, the court ruled 2-1 that the federal exchanges were not allowed while in the Fourth Circuit the judges ruled unanimously that they were allowed.

The issue is how much deference should be given to agencies to interpret the wording of the text of a law when there is ambiguity.

So what’s next? In the DC circuit, the government will ask for an en banc review where all the judges will reconsider the case. If this case ends up in the US Supreme Court, there could be trouble, given the court’s recent string of rulings against the administration’s interpretation of laws. But that will not happen before the summer of 2015 at the earliest and by that time the law will be quite entrenched and withdrawing health insurance from possibly 10 million people will be politically problematic.


  1. Randomfactor says

    Is it possible that SCOTUS stays the rulings until they can take up the case?

    I read elsewhere that if the en banc ruling is in favor of the Obama Administration, there’s no controvery for the Supremes to resolve. (Although I suppose the anti-Obama idiots could appeal.)

  2. Mano Singham says

    There will be no action to stop the health exchanges yet.

    In en banc hearings, ‘senior’ judges (i.e., judges who have kinda-sorta retired) do not take part so one of the judges in the majority opinion will not be eligible. The DC Court of Appeals as a whole tends to be more liberal and so the Obama administration has a good chance of winning. If they do, there will be no controversy because of split Appeals Courts decisions but that would not prevent the losing sides from still appealing to the US Supreme Court and they could take up the case.

  3. Holms says

    It truly seems bizarre that this is all going to hinge on the interpretation of an ambiguously written passage in the legislation. Why on earth is there no option to simply ask the people that signed it into law to clarify their own legislation?

  4. Mano Singham says


    The courts also go by the written record of the congressional debates for guidance but they don’t get testimonies by legislators.

  5. says

    Okay, help me out here. What am I missing?

    I just re-skimmed PPACA (did a simple search for “Exchange”). All of the language regarding Exchanges demonstrates that it is expected that states will set them up. All language refers to states for this reason.

    However, the subsection entitled “Failure To Establish Exchange or Implement Requirements” says that if states don’t establish exchanges, “the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.”

    By my reading, there is not any room for confusion or ambiguity. Exchanges are state things, but if the state doesn’t do it, the HHS Secretary will. How can any judge actually read this and pretend that federal exchanges were not intended to include tax credits?

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