Federal district court rules against Obamacare subsidies on federal exchange

A federal district court in Oklahoma has ruled that the Obamacare statute means what it says: subsidies may not granted to people obtaining their health insurance through the federal exchange. In Pruitt v. Burwell, Judge Ronald White of the Eastern District of Oklahoma followed the reasoning of the panel in Halbig v. Sebelius, a ruling that the full D.C. Circuit, having been packed by the Democrats, recently vacated.

The Oklahoma district court decision does not, of course, create a split in the Circuits. No federal court of appeals ruling exists that finds subsidies on the federal exchange illegal. It’s possible that the Supreme Court will take up this issue even absent a circuit split. If not, an appeal of the Oklahoma case might create a split.

If the Supreme Court does take up the issue, it may be tempted to engage in gymnastics to uphold Obamacare, as some say it did with the issue of the individual mandate. But Judge White’s Pruitt opinion argues persuasively against such judicial maneuvering:

The court is aware that the stakes are higher in the case at bar than they might be in another case. The issue of consequences has been touched upon in the previous decisions discussed. Speaking of its decision to vacate the IRS Rule, the majority in Halbig stated “[w]e reach this conclusion, frankly, with reluctance.”

Other judges in similar litigation have cast the plaintiffs’ argument in apocalyptic language. The first sentence of Judge Edwards’ dissent in Halbig is as follows: “This case is about Appellants’ not-so-veiled attempt to gut the Patient Protection and Affordable Care Act (‘ACA’).” Concurring in King, Judge Davis states that “[a]ppellants’ approach would effectively destroy the statute . . . .” Further, “[w]hat [appellants] may not do is rely on our help to deny to millions of Americans desperately-needed health insurance. . . ..”

Of course, a proper legal decision is not a matter of the court “helping” one side or the other. A lawsuit challenging a federal regulation is a commonplace occurrence in this country, not an affront to judicial dignity. A higher-profile case results in greater scrutiny of the decision, which is understandable and appropriate. . . .

This is a case of statutory interpretation. “The text is what it is, no matter which side benefits.” Such a case (even if affirmed on the inevitable appeal) does not “gut” or “destroy” anything. On the contrary, the court is upholding the Act as written.

Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will. As the Act presently stands, “vague notions of a statute’s ‘basic purpose’ are nonetheless inadequate to overcome the words of its text regarding the specific issue under consideration.”

It is a “core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” “But in the last analysis, these always-fascinating policy discussions are beside the point. The role of this Court is to apply the statute as it is written – even if we think some other approach might ‘accor[d] with good policy.’” (Emphasis added)

In short, just do your job.

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