Republican Victory Turns Into Defeat as Second Court Rules Obamacare Subsidies Are Legal

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The Republican “victory” on the legality of Obamacare subsidies for the federal exchange quickly turned to defeat as a second appeals court ruled that the subsidies are legal.

Via The New York Times:

The United States Court of Appeals for the Fourth Circuit, in Richmond, upheld the subsidies, saying that a rule issued by the Internal Revenue Service was “a permissible exercise of the agency’s discretion.”
….

A similar approach was sounded later by the Fourth Circuit panel, which said, “We find that the applicable statutory language is ambiguous and subject to multiple interpretations.” The court said it would, therefore, give deference to the reading of the law by the Internal Revenue Service, which issued the rule allowing payment of subsidies for people in all states, regardless of whether the state had a federal or state exchange.

That Republican victory that they claimed would be a deathblow to Obamacare didn’t last very long. The reason why the two courts offered to two different rulings is the standard that each applied. The D.C. court that ruled that the federal exchange subsidies were illegal did so based on only the language of the statute. The Richmond court used traditional legal reasoning and took legislative intent under consideration.

For those of you keeping score at home, three courts have ruled the subsidies legal and one court has ruled them illegal. The D.C. ruling is widely expected to be overturned. The Republican win evaporated before they could get their talking points rolling.

Instead of dealing Obamacare a fatal blow, and taking health insurance away from millions of Americans, Republicans saw their celebration come to an abrupt halt. The D.C. decision lacks credibility because it was arrived at by two Republican judges who deviated from the norms of legal reasoning in order to come to their partisan conclusion.

Neither of these decisions is the final word, but the subsidies are likely not going anywhere. Republicans are spinning their wheels on this one. Obamacare is the law of the land, and it is here to stay.

Jason Easley

Jason is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.

Awards and  Professional Memberships

Member of the Society of Professional Journalists and The American Political Science Association