Demonstrators hold up signs at an education and awareness event on the Affordable Care Act and protest against Tea Party officials they say are threatening an economic shutdown, in Santa Monica, Calif. on Oct. 10, 2013.
Lucy Nicholson/Reuters

Judge allows anti-Obamacare suit to proceed

Updated

A federal judge in Washington, D.C., will give opponents of the Affordable Care Act another chance to unravel President Obama’s healthcare law, using an obscure provision its supporters say is little more than a drafting error.

The suit alleges that the Affordable Care Act bars the federal-run health insurance marketplaces, known as exchanges, from offering subsidies to people living in states where local authorities have opted not to set up an exchange. The Obama administration had asked the former President Bill Clinton-appointed U.S. District Court Judge Paul Friedman to dismiss the suit, but he refused the request Tuesday morning. The lawsuit is one of several pending challenges to the Affordable Care Act that opponents hope will ultimately pick the law apart–piece by piece. 

The subsidies are meant to help people purchase insurance under the law’s requirement to do so–without them, insurance could be prohibitively expensive for some. But the health care law states that only people in “an exchange established by the State” are eligible for the subsidies. Caroline Fredrickson, president of the liberal American Constitution Society, says that’s a drafting mistake by Congress–not a deliberate attempt to hurt people who have to purchase from a federal-run exchange because their state refused to set one up.

“Congress may not have done the most beautiful job of crafting a statute when they passed this legislation, but clearly what they intended to do was ensure the federal government could step in when the states failed or refused to act,” says Fredrickson. “It’s nonsensical to assume that they drafted something to ensure that the law wouldn’t function.”

The plaintiffs and the conservative legal groups supporting the challenge argue that Democrats in Congress wrote, and the president signed, a healthcare law whose language contained the seeds of its own annihilation. They sought to punish states for not setting up their own exchanges by inflicting hardship on some of their most vulnerable residents, say critics.

“I think it’s preposterous,” said Elizabeth Wydra, chief counsel for the liberal Constitutional Accountability Center. “I can’t imagine that the supporters of the Affordable Care Act would want to punish the Americans who arguably need the support of the exchanges the most by saying they don’t get acess to the tax credits that give them access to affordable health insurance.”

The reason that so many Americans have ended up having to purchase from federal-run exchanges is because, with few exceptions, Republican-run states have refused to set up their own exchanges as acts of defiancy against what they see as the tyranny of Obamacare–a law they have railed against repeatedly. Republican attempts to sabotage the law’s implementation is part of what helped set up this challenge to the law in the first place. Most of the states have refused to set up exchanges, but that decision tracks closely with which party is in control.

Just because the judge allowed the lawsuit to proceed, however, doesn’t mean that it will succeed. Judge Friedman also refused a request by the plaintiffs to prevent the feds from issuing subsidies to individuals in federal-run exchanges, which means implementation will go forward unaltered while the lawsuit is considered.

Wydra also points out that under a legal concept called the Chevron doctrine, courts are obliged to defer to a “reasonable interpretation” of the law by a government agency empowered by Congress to carry out said law. Whatever your view on the merits of the plaintffs’ case, she says, the Internal Revenue Service’s view that everyone in an exchange is entitled to the subsidies, is a reasonable one.

That is, unless you think of the law as designed to cause untold suffering to all in its path.

Judge allows anti-Obamacare suit to proceed

Updated