Well, this was completely predictable:
A federal appeals court dealt a huge blow to Obamacare on Tuesday, banning the federal exchange from providing subsidies to residents of the 36 states it serves.It's likely that this will be reversed on appeal, but don't be too relieved when that happens:
A divided three-judge panel on the D.C. Circuit Court of Appeals ruled that the text of the Affordable Care Act restricts the provision of premium tax credits to state-run exchanges. The two Republican appointees on the panel ruled against Obamacare while the one Democratic appointee ruled for the law....
White House spokesman Josh Earnest said the Obama administration will "ask for a ruling from the full DC Circuit" which could potentially reverse the result. He stressed that while the case is pending on appeal, the federal exchange will continue to provide subsidies.But the case is going to the Supreme Court, and it's only a question of when the Court will overturn it, not whether. The case today turned on the IRS's interpretation that contradictory wording in different parts of the law should be resolved in favor of providing insurance subsidies in states that use the federal exchange as well as in states with their own exchanges. Kevin Drum heard from a lawyer friend who explains what the High Court is likely to make of that:
The appeal to the full bench, an en banc vote, would be cast by the three judges who heard the case as well as 10 other judges on the active bench, according to the DC Circuit's rules. Such a vote may be friendlier to Obamacare as it would feature 8 Democratic appointees and 5 Republican appointees. Four of the judges on the court were appointed by President Barack Obama, three of them after Senate Democrats eliminated the 60-vote threshold for most nominations in November to overcome Republican obstruction.
It's long been a fundamental principle in administrative law that an agency's interpretation of a federal statute that they are charged with enforcing is entitled to judicial deference, unless such deference is unreasonable. Conservatives would prefer that courts not defer to the government because #biggovernment. Thus, they want to weaken the deference standard and Halbig gives them basically a two-fer. Or a three-fer since the agency interpreting the statute is the IRS: Take out Obamacare, knock back the deference standard, and punch the IRS.So insurance subsidies in states that don't have their own exchanges are doomed; the only question is when the Supremes will say that.
My first thought was that they'll wait until 2017 to do it, so their decision won't arouse liberal and moderate anger at Republicans just before the 2016 presidential election.
But I bet they won't wait that long, because voters don't like Obamacare enough to cast a presidential vote against its enemies. I bet the Supremes will rule sometime in 2016, in order to create chaos for Obamacare just as the election approaches, because they'll assume that Democrats will be blamed for that chaos. At that point, citizens in the majority of states will have their subsidies taken away (the current ruling doesn't do that, pending appeal). When the subsidies are gone, premiums will skyrocket -- and I expect the Court to say that the rest of the law must remain in effect as is unless Congress and the president agree to repeal it. That means that if the president tries to relieve citizens of the mandate to buy health care because he knows they now can't afford unsubsidized policies -- via, say, an executive order -- he'll be told that that's a tyrannical abuse of power and be slapped down by the courts.
Democrats, of course, will want to try to suspend the mandate in states without subsidies -- but Republicans in Congress won't go for that. They'll say that if Democrats want to relieve the burden on these citizens, they'll have to go along with a repeal of the entire health care law.
And that's what will happen. The only question is whether the repeal law will be signed by President Obama, President Hillary Clinton, or President Rick Perry.
The humiliation of that repeal process really will the Schoolyard Bully Party grinding the 98-Pound Weakling Party's face in the dirt and ordering it to beg for mercy. But that's the nature of our politics now, isn't it?