Will Latest Legal Challenge Kill ObamaCare?

By:  Joe Wolverton, II, J.D.
07/07/2014
       
Will Latest Legal Challenge Kill ObamaCare?

In the case of Halbig v. Sebelius, a federal appeals court will determine the power of the federal government to force states to fund ObamaCare.

Now that the Supreme Court has deigned to decide that the federal government cannot force people of faith to pay for other people’s reproductive retardants, the next challenge to key ObamaCare provisions is working its way through the federal courts.

In the case of Halbig v. Sebelius, four Americans and three employers are seeking relief from an IRS order in which the tax collectors claim the authority under ObamaCare to impose penalties on individuals and companies located in states without an ObamaCare-approved healthcare “exchange.”

The Cato Institute describes the potential impact of the Halbig case on ObamaCare:

The Halbig plaintiffs assert this decree would penalize them in violation of the clear, consistent, and unambiguous language of the PPACA [Patient Protection and Affordable Care Act], as well as congressional intent. The Congressional Research Service writes that Halbig “could be a major obstacle to the implementation of the Act.” Law professor Michael Greve writes, “all of ObamaCare hangs on the outcome.” The lead attorney in Halbig, Michael Carvin, and three other panelists will discuss the legality of the IRS’s decree and the implications for the PPACA.

At the heart of Halbig's complaint is whether Congress in passing the Patient Protection and Affordable Care Act (ObamaCare) intended to deny healthcare subsidies to Americans who have insurance plans purchased outside of the federally established exchanges or whether the law should be interpreted as written, and apply only to those plans purchased under state-created insurance marketplaces.

As The New American reported at the time of the Supreme Court’s ObamaCare ruling, these subsidies were one of many similar financial incentives to state legislatures to participate in federal exchanges. If states demurred, the IRS would set about charging penalties to residents of those states who did not play ball with ObamaCare.

Regarding the plain text of the legislation, 26 U.S.C. § 36B says that the insurance plan subsidies provided by this provision apply only to plans offered in exchanges “established by the State.” The IRS disregarded the letter of the law and set about offering subsidies to federally-funded health care plans, as well.

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