- The Washington Times - Thursday, September 4, 2014

A top federal appeals court vacated its July ruling striking down a major part of Obamacare and announced Thursday that it will rehear the case in December, potentially delaying a date with the Supreme Court.

The court said it is tossing out a three-judge panel’s ruling that said the government couldn’t pay Obamacare subsidies to customers in 36 states. It will send the case to an “en banc” hearing involving 13 judges, most of whom were appointed by Democrats.

The development is good news for an administration that is trying to sell its health care initiative as an affordable option for millions of uninsured Americans and a validation of Senate Democrats’ use last year of the “nuclear option” to change filibuster rules, which allowed them to stack the court with three of President Obama’s appointees.

Obamacare opponents wanted the issue to be sent to the Supreme Court for a final ruling, arguing that the initial D.C. panel’s decision and a contrary decision by an appeals court in Richmond made the case ripe for the justices to hear.

After the D.C. appeals court’s announcement, Obamacare opponents said they will wait to see how the full 13-judge panel handles the case.

“We’ll now see whether the D.C. Circuit will apply long-standing principles of statutory interpretation or will acquiesce to the administration’s request that it be allowed to ignore the plain text of a duly enacted law. Were this not about the [health care law], this would really be an easy case,” said Jonathan Adler, a law professor at Case Western Reserve University who developed the plaintiffs’ position in the case, Halbig v. Burwell.

The case turns on the way the Affordable Care Act was written. The language says subsidies are to be paid to customers who use exchanges “established by the state.” Opponents said that means subsidies can be paid only in the District of Columbia and the 14 states that set up their own exchanges, but not in the 36 states that have refused to set up exchanges and instead rely on the federal HealthCare.gov.

Obama administration attorneys said the intent of the law was to pay subsidies to all exchange customers no matter where they reside.

The D.C. appeals court, in a 2-1 ruling, sided with opponents. Both of the judges in the majority were appointed by Republican presidents, and the dissenting judge was appointed by a Democrat.

The same day, the appeals court in Richmond issued a 3-0 ruling agreeing with the administration. All three of those judges were Democratic appointees.

A Washington Times analysis last month found that Obamacare cases decided by federal appeals courts generally break down along ideological lines. Democrat-appointed judges backed Obamacare provisions more than 90 percent of the time, and Republican-appointed judges ruled against them nearly 80 percent of the time.

The 13-member panel that will rehear the case comprises eight Democrat-appointed judges and five Republican-appointed judges.

That means the four Obama-nominated judges whom Senate Majority Leader Harry Reid pushed through his chamber over the past year could make the difference.

The Nevada Democrat was able to get three of those nominees confirmed only after he changed the chamber’s filibuster rules using the “nuclear option,” lowering the threshold from 60 votes to a simple majority, and undercutting Republicans’ chance to filibuster nominees.

The Supreme Court has weighed in twice on Obamacare, upholding most of the law in a major 2012 ruling but deciding earlier this year that closely held corporations do not have to insure birth control as part of company plans if they object to it on moral grounds.

The D.C. Circuit is evaluating a separate assault on the contraception mandate by religious nonprofits. Last week, judges asked the government and a pro-life group, Priests for Life, to update their argument based on the Supreme Court’s ruling this summer regarding for-profit companies and an order that relates to religious nonprofits.

Thursday’s development cuts into Obamacare at a much deeper level. If consumers on the federal exchange cannot receive subsidies, Mr. Obama’s signature initiative will be much less attractive.

If the full D.C. Circuit sides with the administration, there will no longer be a split with the 4th Circuit and the Supreme Court may be less inclined to take up the matter, legal analysts said.

Mr. Adler said the likelihood of a Supreme Court review “is lower but is still significant.” He noted that similar cases are pending in other circuit courts.