Appeals court vacates ruling that tossed ObamaCare subsidies

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The D.C. Circuit Court of Appeals has agreed to revisit a ruling that struck down the ObamaCare subsidies issued through the federal exchange.

The announcement of the second hearing is a victory for the Obama administration, which suffered a defeat in late July, when a three-judge panel threw out the subsidies, ruling they were not legitimate under the Affordable Care Act.


The en banc order issued Thursday vacates the judges' July decision, eliminating, at least temporarily, a circuit split in the matter that could have led the Supreme Court to take up the case.

A decision by the full D.C. appellate court, in which Democratic appointees outnumber Republicans, could favor the administration. Arguments are scheduled for Dec. 17.

If the full D.C. court decides for the government, experts say it is unlikely that the high court will intervene.

The case, Halbig v. Burwell, pertains to whether the healthcare law allows the federal exchanges to issue tax subsidies to offset the cost of purchasing insurance.

The plaintiffs argue that the precise language of the law only allows the credits to be issued through exchanges established by individual states. Only 14 states opted to create their own exchange, with the rest opting to let the federal government handle enrollment through HealthCare.Gov.

A final victory for the challengers would deal a significant blow to the structure of the healthcare law by upending the stability of the federal exchanges.

Several similar cases are winding their way through the courts.

On the same day that the D.C. Circuit issued its first ruling against the subsidies in July, a separate federal appeals court based in Virginia ruled for them.

This temporary circuit split led some to believe that the Supreme Court would hear the case. The plaintiffs in the Virginia decision have already filed a petition for that hearing.

Jonathan Adler, a leading proponent of the plaintiffs' case, said the new ruling in Halbig will be revealing.

“We'll now see whether the D.C. Circuit will apply longstanding principles of statutory interpretation or will acquiesce to the administration's request that it be allowed to ignore the plain text of a duly enacted law,” Adler, a professor of law at Case Western Reserve University, said in a statement.

— This story was last updated at 10:53 p.m.