The Obama administration has asked the second-most powerful court in America to take a second look at a ruling that, if upheld, would blow a huge hole in its signature health care law.
Federal attorneys filed papers Friday requesting the entire U.S. Court of the Appeals for the District of Columbia Circuit to hear a case that questions whether Obamacare subsidies can flow to all of the states or just the ones that set up their own marketplace without relying on the federal government.
A three-judge panel from the D.C. Circuit, in a 2-1 decision last month, agreed with challengers who say the Affordable Care Act reserved the premium tax credits for health exchanges “established by the State,” effectively meaning the ones set up by 14 states and the District.
The court’s majority relied on a strict reading of the statute passed by Democratic majorities in Congress in 2010.
“In reality, however, the majority derived its “plain meaning” by focusing exclusively on a few provisions in isolation,” the administration said in its petition Friday for an “en banc” hearing before the whole circuit.
The stakes are high for President Obama and his signature domestic achievement. If residents of the 36 other states cannot get subsidies, Obamacare could collapse under the weight of premiums that are too expensive for low- and middle-income Americans who sought coverage on the federal exchange system.
Although the panel’s ruling went against them, it is widely believed the make-up of the entire circuit favors the Democratic administration.
The D.C. Circuit’s decision in Halbig v. Burwell, the government noted Friday, contradicts an unanimous ruling from a three-judge panel in Richmond at the U.S. Court of Appeals for the 4th Circuit, which sided with the Obama administration’s position that Congress would never treat some states differently than others.
That ruling, in King v. Burwell, was issued mere hours after the D.C. judges weighed in on July 22.
“The disruption threatened by the panel majority’s erroneous interpretation and the direct conflict with King present a question of ‘exceptional importance’ warranting en banc consideration,” the administration wrote in its petition.
Yet the administration’s opponents also took steps this week to safeguard their position. The losing side in the King case from Richmond asked the Supreme Court on Thursday to review their case in the next term.