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September 30, 2014

Oklahoma Federal Court Rules IRS Attempt to Save Obamacare's Subsidies for Federal Exchange Enrollees "Arbitrary, Capricious, an Abuse of Discretion, and Otherwise Not In Accordance with the Law"


The full decision is here.

If you're coming in late to this, or have forgotten, this concerns the IRS granting those who enroll into Obamacare in the federal exchanges the same subsidies as are granted to those who enroll in the state exchanges.

The problem is that the law only specifies subsidies for state exchange enrollees. It appears this was intended to be an encouragement for states to set up their exchanges.

But 26 or so states opted out -- but Obama's IRS, desperate to save his bacon with lots of enrollees, decided that by administrative rule they would trump the law passed by Congress and just rule that anyone signed up for Obamacare should have subsidies.

A federal court in Oklahoma has ruled otherwise.

Now, a DC circuit court also ruled this way a few months ago -- but that is now going to an en banc rehearing, and as the full court is stuffed full with progressives (thanks to Harry Reid's nuclear option), it is widely expected that the full progressive court will countermand the three-judge panel which issued the ruling.

As Gabe says-- Correction; Gabe did not say this; I misinterpreted him; see my full correction below -- this seems to insure that there's a split in the lower courts (there were some liberal judges who ruled that the administrative law-making was a-ok with them), thus dramatically increasing the odds that the Supreme Court will have to rule on the matter.

Correction: And I have to correct something: A "circuit split" occurs when the circuit courts of appeals split.

I misinterpreted Gabe. We do not have a circuit split yet, as I think only one appeals court (the Fourth Circuit) has has ruled on this on the circuit level, the appeals level.

All of the other rulings are from the originating (trial) courts.

Gabe's point was that he doesn't expect the Supreme Court to wait for a bona-fide split, but will probably take an appeal earlier, given the importance of the cases.

That error was mine, not Gabe's.






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