WASHINGTON – Two federal appeals courts issued conflicting rulings Tuesday in a dispute involving crucial financing for President Barack Obama’s health care law.
A three-judge panel of the appeals court in Washington said the plain language of the law states that financial aid to help people pay insurance premiums can be provided only in states that have set up their own insurance exchanges.
But a similar panel of the 4th Circuit in Richmond, Virginia, said the language of the law is confusing and that the Internal Revenue Service reasonably interpreted the will of Congress when it said that tax credits can also be provided in states where the federal government is running the markets.
The Washington case is Halbig v. Burwell, and the Richmond case is King vs. Burwell. Some excerpts from both decisions:
—Judge Thomas Griffith, U.S. Court of Appeals for the District of Columbia Circuit:
“Because we conclude that the (Affordable Care Act) unambiguously restricts the (tax credit) subsidy to insurance purchased on exchanges ‘established by the state,’ we reverse the district court and vacate the IRS’ regulation.
“We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still.”
—Judge Roger Gregory, 4th U.S. Circuit Court of Appeals, Richmond:
Congress determined that “denying tax credits to individuals shopping on federal exchanges would throw a debilitating wrench into the act’s internal economic machinery,” and therefore the court deferred to an IRS interpretation that furthers the overall goals of the legislation.
“We find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’ determination, however, we uphold the rule as a permissible exercise of the agency’s discretion.”
—Judge Andre Davis, 4th Circuit, concurring:
“If I ask for pizza from Pizza Hut for lunch but clarify that I would be fine with a pizza from Domino’s, and I then specify that I want ham and pepperoni on my pizza from Pizza Hut, my friend who returns from Domino’s with a ham and pepperoni pizza has still complied with a literal construction of my lunch order. That is this case: Congress specified that exchanges should be established and run by the states, but the contingency provision permits federal officials to act in place of the state when it fails to establish an exchange.”