Today the Supreme Court announced it will hear the issue of Obamacare’s subsidies in the federal exchange, which challengers have alleged are illegal. Reuters reports:
In a one-sentence order, the court said it would decide a case brought by conservative challengers to the law. The plaintiffs appealed a July ruling by the 4th U.S. Circuit Court of Appeals that upheld the subsidies. The nine justices will issue a ruling by the end of June.
This suggests that the Justices are granting the cert petition filed in King v. Burwell. But the King case isn’t the only one to deal with this issue. Notably, Halbig v. Burwell is a very similar case that won in the D.C. Circuit Court of Appeals. Often, in the case of a split circuit, the Court will combine cases to hear the same issue and resolve the conflicting lower court rulings.
This issue poses an existential threat to ObamaCare. While it has been framed in the press as a politically-motivated attempt to gut ObamaCare of its subsidies (one of its essential features), this case is really about executing the law as it was written. Challengers point out that the law never authorized subsidies to be dispersed through a federal exchange, but only through an exchange established by a state.
If the Supreme Court were to side with challengers and rule that the IRS overstepped and illegally changed the implementation of the law without Congressional approval, the result would be that no subsidies would flow through the federal exchange. But this would not be the fault of these lawsuits – it would simply be the execution of ObamaCare as written.
Importantly, the subsidies trigger other not-so-popular mechanisms in the law, like mandates and penalties, which could also be affected if the law’s challengers prevail.