July 22, 2014
1 min read

US Court of Appeals strikes down key provisions of ACA

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In the case of Halbig v. Burwell, the United States Court of Appeals for the District of Columbia Circuit has ruled that a key piece of the Affordable Care Act involving subsidies to low-income citizens in certain states is unconstitutional.

The decision is the result of an appeal brought last year which argued that certain sentences and phrases used in the drafting of the ACA would unconstitutionally require states that did not have exchanges to enact federal laws. To date, only 15 states and the District of Columbia have set up health care insurance exchanges. Court documents maintain that in those states, provisions of the Internal Revenue Service, particularly the Administrative Procedure Act, would be violated if the federal mandate to citizens and employers were upheld.

Much of the 57-page court document focuses on language regarding the intent of the law vs. the specific way it was written. In the document, the court wrote that provisions in the law are “creating a legal fiction that any exchange is, by definition, established by a state, even when, as a matter of fact, it is not.”

Today’s decision was a split by a three-judge panel.

In his dissent, Senior Circuit Judge Harry T. Edwards wrote, “The IRS’s and HHS’s constructions of the statute are perfectly consistent with the statute’s text, structure, and  purpose, while   Appellants’ interpretation would “crumble” the  Act’s structure. Therefore, we certainly cannot hold that that the agencies’ regulations are ‘manifestly contrary to the statute.’ This court owes deference to the agencies’ interpretations of the ACA. Unfortunately, by imposing the appellants’ myopic construction on the administering agencies without any regard for the overall statutory scheme, the majority opinion effectively ignores the basic tenets of statutory construction …”