Rule of Law

Court challenges could tear down major pieces of ObamaCare

By Sam Baker


President Obama’s healthcare law is under attack in the courts even as the administration sprints toward full implementation.


Despite surviving a stiff challenge at the Supreme Court last year, some of the law’s biggest provisions remain at risk from legal challenges.


One set of lawsuits accuses the Internal Revenue Service of illegally implementing new subsidies to help people buy insurance. Separately, more than 60 lawsuits have been filed challenging the law’s mandate for health plans to cover birth control.


A loss for the administration on the contraception mandate would undermine a key selling point for the law that Democrats used to court women in the 2012 elections.


The challenge to the law’s insurance subsidies, while more obscure, poses a far bigger and more dangerous threat to the Affordable Care Act.


Simon Lazarus, senior counsel at the Constitutional Accountability Center, has argued that there’s a very real chance the Supreme Court’s conservative majority would strike down the IRS’s approach to insurance subsidies if it gets the chance.


Lazarus supports the healthcare law and believes the IRS has taken the right approach to implementing its subsidies. But it’s easy to see how the case could play out under the strict “textualist” approach championed by Justice Antonin Scalia, he said.


“One has to be concerned about that,” Lazarus said.


If the Supreme Court or judges in the lower courts adopt a narrow reading of the healthcare law, the consequences could be “devastating,” Lazarus said.


That’s exactly why the people behind the lawsuit think they have a real chance to win.


The healthcare law sets up new marketplaces where people can buy health insurance. Most people who use the marketplaces will be eligible for a subsidy to help pay for their premiums.


The law’s challengers say subsidies should only be available to people who get insurance through a state-run marketplace. If the federal government runs a state’s marketplace — which it will in the majority of states — no subsidies should be available, the lawsuit argues.


Why not? Because the text of the Affordable Care Act refers to subsidies flowing through exchanges “established by the state.” 


The IRS has said subsidies will be available in all 50 states, no matter who runs the exchanges. The law’s critics say that clearly contradicts the text of the statute.


“The IRS rule we are challenging is at war with the Act’s plain language and completely rewrites the deal that Congress made with the states on running these insurance exchanges,” attorney Michael Carvin said in a statement when his clients filed their challenge to the subsidies.


The law’s supporters say the context of the entire statute makes clear that Congress intended for all 50 exchanges to function the same way.


“There are layers of reasons why this claim would and should be rejected,” Lazarus said.


But a judge or Supreme Court justice like Scalia could easily hone in on the “established by the state” language, making the case for “textualism” — adhering strictly to the specific words used in a statute, rather than trying to determine its intent.


“It’s a way of taking one isolated provision of a statute and just reading that one provision,” Lazarus said.


Lazarus has been urging the left to focus aggressively on the subsidies challenge, even though the lawsuits are still in their early stages.


Two suits have been filed challenging the subsidies; neither has gotten a hearing yet in court. There’s a chance the cases would have to wait until at least next year, for procedural reasons.


Although they don’t believe the suits stand much chance of success, some supporters of the healthcare law believe their side lost the public relations battle over the Supreme Court’s ObamaCare case, in part because liberal academics didn’t take the challenge seriously. 


“However such maneuvers play out in court, the administration and its allies need to play their game out of court as well. Specifically, they need to not repeat their near-death experience with the individual mandate challenge, when they left their adversaries free to frame the legal issues, unanswered, for the media, politicians, and the public,” Lazarus wrote in a recent op-ed.


The more immediate legal threat to the Affordable Care Act comes from challenges to its birth control mandate.


The contraception mandate is a relatively small part of the overall healthcare law, but it is a major talking point for the White House.


Obama focused extensively on the birth-control mandate during the 2012 campaign, and Democrats made the policy a cornerstone of their aggressive pitch to female voters. 


An eventual Supreme Court decision on the contraception policy might not have huge implications for the rest of the healthcare law, but it would be politically explosive.


Two federal appeals courts have heard oral arguments over the contraception policy, and challengers have filed 60 lawsuits in courts across the country. 


The plaintiffs, most of whom are business owners, say the policy violates their First Amendment right to religious liberty by forcing them to provide a service they find immoral.


The Obama administration has given an exemption to churches and houses of worship, and has carved out a middle ground for religious-affiliated employers like Catholic hospitals and universities. 


For-profit companies are also challenging the policy. Those cases have moved faster, and though courts have been split on the issue, several have questioned whether business owners can invoke religious liberty over healthcare plans they don’t provide personally, but rather through their companies.


The 3rd Circuit Court of Appeals heard a case this week filed by a cabinet-making company whose owners object to providing contraception. The lower court in that case sided against the company, saying religious liberty belongs to people — not corporations.


“Religious belief takes shape within the minds and hearts of individuals, and its protection is one of the more uniquely ‘human’ rights provided by the Constitution,” the lower court said.