The Halbig Case: One Last Shot

If one were to ask the average American what single issue is the basis for the most extreme differences between the two political parties, the answer would be Obamacare. Sure — taxes, immigration, gun control and social issues are also areas of contention, but they contain a great deal of overlap and gray area. But when it comes to Obamacare, the differences cannot be starker.

Republicans want to end it, and Democrats want to keep it. It’s as simple as that.

Every so often, a Republican lawmaker will pop up and talk about the need for Republicans to adapt to the reality of Obamacare. Inevitably, that politician will backtrack after having to deal with a lot of blowback from the base of the party. Nobody wants to hear their own side talking as if they have already conceded defeat.

Though some on the right flank may (loudly) disagree, this is hardly an issue where the “establishment” has any disagreement with the tea party/base. The only difference is that those in power understand that it will be very difficult to actually repeal Obamacare.

It’s not just moderate RINO (Republican in Name Only) types who are saying this either. While Rep. Cathy McMorriss Rodgers got slammed after saying in April that Republicans “need to look at reforming the exchanges,” it has been base-pleasers such as Sen. Rand Paul and Sen. Ted Cruz who have been blunter about it.

Paul, at one point, proposed making the law voluntary as opposed to a mandatory repeal, and Cruz, a full year ago, said in an interview with Sean Hannity, “If we don’t do it [defund Obamacare] now, in all likelihood, Obamacare will never, ever be repealed.”

The reason this is the case — and why those who have the responsibility of dealing with the real world and real-world consequences understand that they can’t just repeal Obamacare — is because, in the words of Sen. Paul, “People get … accustomed to receiving things, particularly things that they get for free.” And the main providers of “free stuff” are the plans bought via the exchanges.

A Health and Human Services (HHS) report released a month ago said that, on the exchanges run by the federal government, through which 5.4 million people signed up for insurance coverage, a full “87 percent of the individuals who selected a Marketplace plan during the initial open enrollment period selected a plan with tax credits.” Which means that, on the federal exchange, only a little more than 700,000 people are actually paying for their insurance without the government (read: the taxpayers) paying for some, most, or even all of it. If that percentage holds true for all 50 states, that would mean that, out of the highly touted “8 million” enrollees the Obama administration was celebrating, only 1 million of them are paying for their insurance coverage, while 7 million are being paid for by taxpayers, to some degree.

Those are the numbers that make the idea of full repeal difficult. Try telling 7 million people that you will be taking their subsidized insurance away from them. It isn’t likely that they will respond well.

But there is a silver lining here, and it may be what ultimately leads to full repeal — if things break the Republicans’ way.

There have been two high-profile challenges in the court system that made it to the Supreme Court thus far. In 2012, in the case of National Federation of Independent Business [NFIB] v. Sebelius, Chief Justice Roberts declared the law constitutional, but determined that the mandate fine was, in reality, a tax. On Burwell v. Hobby Lobby, the court had Justice Alito strike down HHS’s ability to make for-profit corporations violate their religious beliefs to satisfy a regulation the secretary authored.

The Burwell victory was important, because a loss would have meant a setback to religious freedom in this country. But it didn’t do anything to the actual law. The chance for that was NFIB, and that was lost. The law was here to stay.

But there may still be another chance.

The case of Halbig v. Sebelius can make all the Republican dreams come true, effectively repealing the law by attacking it in the place the GOP would have the hardest time repealing it legislatively — the insurance subsidies.

The issue at hand is that the Patient Protection and Affordable Care Act (PPACA) is written in a way that seems to leave out the possibility of the IRS providing the tax credit/subsidies for plans purchased on the federal exchange. The law says that such credits will be provided for a plan that was bought “through an Exchange established by the State under [section] 1311.” And, while that language seems clear enough in saying that only an Exchange set up by states is eligible for the credits, the fact that the Federal Exchange is not mentioned at all in that section, but makes its appearance in section 1321, means that the law is ripe for a challenge on the grounds of statutory interpretation.

If the case (which currently is waiting for a decision from the D.C. Circuit Court) makes it to the Supreme Court, as many experts assume it will, the same partisan lines will be drawn as they were in all these cases. But the fact is that a decision that effectively wipes out 4.7 of the 7 million subsidized enrollees (67 percent) and 58 percent of the total, would definitely make the job of the legislative Republicans a lot easier.