The Next Obamacare Legal Challenge Moves Forward

Well, the good news is that U.S. District Court for D.C. Judge Paul Friedman rejected a motion for an immediate injunction against tax subsidies for those purchasing health insurance via federally-created exchanges. The bad news is that Friedman allowed a suit calling for invalidation of such subsidies to proceed.

I briefly discussed the suit earlier this week, focusing on the legislative history that would normally have forbidden it but that was lacking due to the Affordable Care Act’s speedy final enactment, in turn caused by Republican filibustering and Scott Brown’s special-election victory in 2011. WaPo’s Sarah Kliff offered the best explanation of the issues involved in a post written last year when the idea of challenging the subsidies first arose in conservative legal circles.

Basically, there’s conflicting language in the ACA as to whether the subsidies are available to those participating in both federal and state exchanges, or strictly in state exchanges. The actual legislative intent is absolutely clear: there’s no reason whatsoever that those voting for the ACA would have wanted to limit the subsidies to state exchange participants. They didn’t, of course, expect that 36 states would decline to set up their own exchanges, but they did authorize the feds to step in when that happened.

I can’t really see the courts gutting Obamacare over this issue, but then I didn’t expect the Supremes to make the Medicaid expansion voluntary, either. It bears watching closely.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.