Today, the U.S. Court of Appeals ruled that the federal subsidies for health insurance were not properly designed.
Halbig is the case court watchers consider to be the “probably the most significant existential threat to the Affordable Care Act” because it gets to the heart of the law.
It is one of four lawsuits that challenges the legality of health-insurance subsidies dispensed by the IRS thus had exchanges established by the federal government.
Challengers had argued that the law only allows subsides on exchanges
run by the states themselves. Supporters of the law argued that was
essentially little more than a typo in the law.
The Cato Institute’s Michael F. Cannon argues that if upheld by the Supreme Court, the ruling could free more than 57 million Americans from the ACA’s individual & employer mandates.
Though the PPACA repeatedly states those subsidies are available only “through an Exchange established by the State,” and there are indications IRS officials knew they did not have the authority to issue subsidies through federal Exchanges, the IRS is dispensing billions of dollars of taxpayer subsidies through federal Exchanges anyway. The Halbig plaintiffs are employers and individuals from six federal-Exchange states who are being injured by the IRS’s actions because those illegal subsidies trigger taxes against them under the PPACA’s employer and individual mandates. The plaintiffs want relief from those illegal taxes, and the only way to get it is to ask federal courts to put a stop to the illegal subsidies.
Cannon says that Halbig would free more than 8 Million people from the Individual Mandate and would free 250,000 firms and 57 million employees from the Employer Mandate.
In his oped at the LA Times, yesterday, Professor Jonathan Turley wrote that “a ruling against the administration would mean that Obama has been responsible for ordering what could amount to billions of dollars to be paid from the federal Treasury without authority. And it would mean the administration has committed yet another violation of the separation of powers.”