It's been four years since the Affordable Care Act became law of the land, but the legal challenges don't appear to be letting up any time soon.
The U.S. Court of Appeals for the D.C. Circuit announced today the full court would rehear a case challenging the health care law. That has some health-law watchers predicting the case will wind up before the Supreme Court for arbitration as early as next year.
The case, known as Halbig vs. Burwell, was heard by a panel of three judges from the same circuit in July. Those judges ruled in favor of the plaintiffs, who charge that the wording of the ACA makes it illegal to offer tax subsidies to people who have enrolled via federal exchanges for health care subsidies. The case argues that the language of the health care law provides for subsidies only to customers from states that have set up their own exchanges. The majority of states have opted to let the federal government operate their exchanges, and upwards of 5 million people have applied for health care through them with varying degrees of federal subsidies. The subsidies primarily assist low-income people who could not otherwise afford health care.
"The big story here is that if the full court upholds the decison by the three judge panel, then you have a case that may be ripe for the U.S. Supreme Court," says Steve Friedman, a health care and employee benefits attorney at employment law firm Littler Mendelson, based in San Francisco.
A Supreme Court review seems particularly likely, especially because on the same day that the three judges offered their decision in favor of Halbig, a Virginia federal circuit court judge handed down an opposing decision in a similar case, siding narrowly with the federal government. In that case, known as King vs. Burwell, Judge Roger Gregory, a Clinton-era appointee, wrote:
The court is of the opinion that the defendants have the stronger opinion, although only slightly. Given that Congress defined "Exchange" as an Exchange established by the state, it makes sense to read 1321 (c)'s directive that HHS establish "such Exchange" to mean that the federal government acts on behalf of the state when it establishes its own exchange. However, the court cannot ignore the common-sense appeal of the plaintiff's argument; a literal reading of the statute undoubtedly accords more closely with their position.
There are four cases in various court jurisdictions around the country challenging the ACA on similar grounds. Another case, called Pruitt v. Burwell, was brought by Oklahoma Attorney General, Scott Pruitt in 2011. Yet another, called Indiana v. IRS, was brought by 15 school districts in the state in 2013.
For now, the U.S. Court of Appeals decision to hear the case en banc won't have much impact on small business owners, who must still comply with the law by 2015, says Friedman. A final decision in favor of the plaintiffs from the Supreme Court, however, could upend the health care law, essentially gutting it in the 34 states with federally run exchanges.
"This is a real and significant threat to the ACA," Friedman says.