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Will the Supreme Court get another shot at Obamacare?



The Supreme Court last week chipped away at one part of the Affordable Care Act, but its ruling in the Hobby Lobby contraception case left most of Obamacare intact. Other court cases, however, are making their way through the court system in an attempt to deliver a more fatal blow to the controversial law.
 

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As early as this week, a three-judge panel from the D.C. Circuit Court of Appeals is expected to hand down a ruling on whether the federal government can give subsidies to Obamacare recipients in states with federally-run health care exchanges. If the appeals court rules in favor of the law's opponents, it could cripple the law. More than half of the states rely on federally-run marketplaces, and were subsidies not available in those states, Obamacare could be too costly for many customers.

The case, Halbig v. Burwell, rests on how the court system interprets a poorly-worded sentence in the Affordable Care Act.

Section 1311 of the law says the federal government will give subsidies to eligible consumers who buy insurance from an exchange "established by the State." The Halbig suit -- and three other similar cases -- argue that, consequently, subsidies aren't available to customers in the 34 Obamacare exchanges that were established by the federal government. (Here's a list of which states have state-run exchanges and which have federally-run exchanges.)

Michael Cannon of the Cato Institute, a libertarian think tank, and Jonathan Adler of Case Western Reserve University School of Law first made the case against the subsidies, arguing that Congress wanted the subsidies to serve as a reward for states that established their own exchanges. Obamacare's "congressional sponsors created incentives for states to implement much of the law and reasonably expected that states would do so," they wrote.

However, there's no need to guess congressional intent given the law was passed by Congress four years ago. In fact, seven high-ranking Democrats who helped craft Obamacare, as well as dozens of state lawmakers, filed a brief in the case to explain the true intent of the law.

"The purpose of the tax credit provision was to facilitate access to affordable insurance through the Exchanges--not, as Appellants would have it, to incentivize the establishment of state Exchanges above all else, and certainly not to thwart Congress's fundamental purpose of making insurance affordable for all Americans," they wrote.

Nicholas Bagley, an expert in health law at the University of Michigan Law School, told CBS News that the "the challenger's argument about legislative intent is pretty adventurous."

The argument, he said, attempts to "exploit poorly-drafted statutory language and transform that into a radical re-conceptualization of what the Affordable Care Act was meant to do."

Steven Schwinn, a professor at the John Marshall Law School in Chicago, agreed that the legal basis for the challenge focuses intently on one poorly-drafted phrase.

"So much of the language of the act makes clear the congressional intent was to extend subsidies to federal exchanges," he said. "When you look beyond one sentence... I think the picture is quite clear what's going on in the Affordable Care Act."

Still, during the oral arguments in March, at least one of the three judges from the D.C. Circuit Court of Appeals panel was skeptical of the administration's arguments in the case.

Should the Obama administration lose, it would very likely request an en banc hearing, Bagley explained, which would require all 11 active judges on the D.C. Circuit Court of Appeals to reconsider the case. Given that most of the judges were appointed by Democrats, the administration would have a better chance of winning that round. Yet if the government lost again, it would likely ask the Supreme Court to review the case.

"If the government asks the Supreme Court to review the case, it would be very likely to accept review, especially on an issue of this importance," Bagley said.

Meanwhile, the Obama administration is fending off a challenge to the Affordable Care Act on another front in Wisconsin. On Monday, a federal judge considered whether Sen. Ron Johnson, R-Wis., should be allowed to proceed with his lawsuit against the ACA. Specifically, the lawsuit challenges the federal subsidies for lawmakers and congressional staffers who purchase health insurance through Obamacare exchanges.

The controversy stems from a provision in the law requiring congressmen and their staff to get their insurance from the state-based health care exchanges -- in order to ensure members of Congress weren't receiving special treatment. However, that meant that members of Congress and their staff were the only people in America directly cut off from their employer-provided health insurance subsidies because of Obamacare (whether or not other Americans have been off as an indirect result of the law is a different story). This was particularly troublesome for low-paid staffers.

To work around this problem, the administration crafted a compromise rule, allowing congressional employees getting insurance through the exchanges to still get employer contributions to their premiums.

"It's Congress' role to actually make or change or repeal laws," Johnson said outside of the courthouse on Monday. "They can't do it through presidential fiat."

Before Johnson can proceed with the case, a federal judge needs to determine whether or not the senator has standing -- in other words, whether he has a personal stake in the outcome of the lawsuit or has been personally harmed by the president's actions. Johnson argues he has standing because he and other lawmakers were "asked to be complicit in something we do not believe to be lawful." Additionally, he said that providing his staff with subsidies could harm his reputation with his constituents.

Schwinn called the argument "bizarre," given that the Obama administration in this case is actually trying to help, rather than harm, Johnson's staff. He added, "It doesn't even really help them," but rather "puts them in the position they were in prior to the Affordable Care Act."

"It's a very bizarre theory to get into federal court, and in my view underscores the political nature of this challenge and so many challenges to Obamacare," Schwinn said.

After Monday's hearing on the standing issue, Johnson said he was encouraged that U.S. District Judge William Griesbach even entertained his arguments, the Green Bay Press-Gazette reported. The judge said he would issue a ruling on the matter of Johnson's standing in "short order."


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