"Where's The Train Wreck?"
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Still waiting for the most important Obamacare ruling --- and it isn't Hobby Lobby
Health care policy watchers are still waiting for what could be the most important court ruling of the year on Obamacare -- but it isn't Sebelius v. Hobby Lobby, the contraception mandate case.
Though a U.S. Supreme Court decision on Hobby Lobby could have significant implications for religious liberty, it won't do much to disrupt the overall implementation of President Obama's health care law.
But another case, Halbig v. Sebelius, set to be decided by the U.S. Court of Appeals for the D.C. Circuit, could change that.
The Halbig case concerns the subsidies that the federal government pays to individuals to help them purchase insurance on an exchange. Though the plain text of Obamacare says that the subsidies can be paid to those obtaining insurance through "an exchange established by a state," the Internal Revenue Service ruled that the subsidies could also go to individuals who obtained it on a federal exchange.
If the court rules against the Obama administration and the ruling stands, it would mean that individuals in states that defaulted to a federal exchange would no longer be eligible for subsidies. And in total, exchanges in 36 states were created at least in part through the federal government.
So, states opposed to Obamacare could simply refuse to set up a state exchange or to expandMedicaid. In those states, employers wouldn't be penalized for failing to offer qualifying insurance (which is triggered by workers seeking federal subsidies), meaning that anti-Obamacare states could become more attractive to businesses trying to get around the employer mandate.
But anti-Obamacare governors would then be under more political pressure to set up state-based exchanges.
In oral arguments, which I attended and summarized, the three-judge panel seemed divided on the issue. It's unclear when exactly a ruling will come out, though the D.C. Circuit tends to release opinions on Tuesdays and Fridays.
If the court rules against the Obama administration, the issue is much more likely to go to the Supreme Court, where the justices would get one more crack at Obamacare.
For further background on the case, check out the roundup put together by Cato's Michael Cannon, who, along with Case Western University law professor Jonathan Adler, helped develop the theory behind the challenge.
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