It was a long-awaited ruling, and it was a doozy. A three-judge panel of the Federal Circuit Court for the District of Columbia decided the Halbig case Tuesday, ruling that under President Obama's signature legislative achievement only health insurance exchanges “established by the State” can award subsidies to consumers for purchasing health insurance and penalize the employers of those who receive the subsidies. The federal exchange, which is being used in 36 states, can do neither. That's the clear meaning of the Affordable Care Act, according to the panel majority.
The Supreme Court will likely have to settle this issue next year because another appeals court has ruled the opposite. But if Halbig is upheld and nothing else changes, Americans will get an even worse version of Obamacare -- one that causes enormous upward pressure on insurance premiums but without subsidies to offset the pain.
The answer is for Congress and Obama to start over and pass reasonable health insurance reforms that reduce prices instead of causing them to skyrocket. Halbig should remind Americans of how a measure with such grave flaws became law. A hyper-partisan Democratic president and Congress passed the measure with little concern for dissenting opinions or even a basic understanding of what the bill would do. Rather than seek consensus or honor public opinion, Senate Majority Leader Harry Reid, D-Nev., rammed his version of the bill through the Senate on Christmas Eve 2009 by greasing the skids with a few soft-bribe earmarks for wavering Democrats.
As a result, the bill contained not only unintended consequences, but also unintended policies, some based on crude drafting errors. When voters in Massachusetts unexpectedly revoked the Democrats' 60-vote super-majority in January 2010, they had no choice but to ram the same flawed Senate bill (which few of them had read anyway) back through the House of Representatives without changing its text.
As for the particular issue in Halbig, Senate Democratic lawmakers had at one point considered using Obamacare subsidies as an explicit incentive to nudge states to establish their own exchanges. The court did not make its decision based on this. It still undercuts the president’s argument that the law's plain text — which distinguishes between state and federal exchanges — should be superseded by different intentions imputed to Congress after the fact.
As has occurred many times during Obamacare's implementation, Obama pretends the law says something it doesn't say. In Halbig, he found a court unwilling to play along. As the majority opinion noted, “within constitutional limits, Congress is supreme in matters of policy. ... [O]ur duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process.” The court refused to rewrite or “re-construe” Obamacare in order to save it.
Rather than risk a final Halbig ruling that creates administrative chaos next year, Congress and Obama should go back to the drawing board, then return with a new health care reform law produced through honest debate and compromise. Like they should have done in 2010.