Federal judges Tuesday dealt a potentially deadly blow to President Barack Obama's healthcare law, throwing out a rule issued by the administration's appointees at the Internal Revenue Service that the Affordable Care Act authorized federal subsidies to millions of Americans -- notwithstanding no supporting language in the Obamacare legislation.
The 2-1 decision by a U.S. Court of Appeals panel for the District of Columbia, said Reuters, "could lead to a new showdown over Obamacare before the U.S. Supreme Court, would prevent the administration from offering premium tax credits to people who purchase insurance through the federal insurance marketplace that serves most of the 8 million consumers who have signed up for private coverage for 2014."
A full two years ago, Nevada Journal reported in depth on this issue, calling it "a gaping loophole" in the text of the federal law assembled by U.S. Senate Majority Leader Reid and his staff from different legislative drafts.
That story noted:
Obamacare sought to set up a nationwide network of government-created and government-run health insurance exchanges.
There, supposedly, individuals would shop for and purchase health insurance that was federally approved and controlled — and subsidized with federal tax credits.
Congress wanted states, not the federal government, to set up and run the exchanges. To encourage states to do so, PPACA offers many incentives. Should a state decline, however, the law allows the federal government to set up a federal exchange for that state instead.
So what is the large hole in the legislation? It results from the decision by the drafters — embodied in multiple provisions throughout the text of the law — to make individuals eligible for a tax credit only if they buy their insurance through a state exchange, not a federal one.
The July 2012 Nevada Journal report also linked to a Case Western Reserve University School of Law article that explored the legal issues.
And now the most prestigious appeals court in the nation has agreed with that article's authors.
The law “does not authorize the Internal Revenue Service to provide tax credits for insurance purchased on federal exchanges,” said the D.C. Appeals court ruling Tuesday. The law, it held, “plainly makes subsidies available only on exchanges established by states.”
Nevada Journal has provided other uniquely revealing coverage of Sen. Reid's role in the ongoing political disaster that Obamacare has turned out to be.
In December of last year, NJ pointed out how Reid’s legislation inadvertently teed-up the Obama White House and its Health & Human Services team to allow both to demonstrate — in a highly public and embarrassing way — serious administrative incompetence.
That was because the three key pieces of Obamacare legislation that Reid forced through the Senate, each time on strict party-line votes, basically consisted of provisions delegating to the Secretary of Health and Human Services all the implementation responsibilities for the massive program.
"Basically, the legislation said," reported NJ, “'We here in the Senate have some ideas on how to rejigger one-sixth of the American economy, but we’ll be leaving the details to you and the White House.'
That’s why — within the approximately 2,700 pages of the bill put together by Reid, his lieutenants and his staff — the phrase, “the Secretary,” appears 3,120 times.
Among them are 953 appearances of the phrase, “the Secretary shall,” and 348 appearances of the phrase, “the Secretary may.”
“As determined by the Secretary,” appears 84 times, and “As the Secretary determines,” appears 81 times. Fifty-five times the bill states, “the Secretary shall ensure,” and 28 times it either says “the Secretary shall specify,” “the Secretary shall promulgate regulations,” or “the Secretary shall develop standards.”
Nevada Journal also appears to be the one news publication in the Silver State that reported how Reid's legislation was actually designed to drive Americans out of their existing health-insurance plans -- notwithstand his own repeated pledges, echoing Barrack Obama, that "if you like your health plan, you can keep it."
Other legal problems with Reid's legislation included the fact that it originated in the U.S. Senate, although the U.S. Constitution requires any tax legislation to start in the U.S. House of Representatives.
A Nevada Journal story on that issue noted that, "The last time Obamacare was challenged before the U.S. Supreme Court, it barely survived":
Only because Chief Justice John Roberts creatively re-construed the law’s unconstitutional penalties as constitutional “taxes” was a 5-to-4 Court majority able to form and save the gargantuan law, officially known as the Patient Protection and Affordable Care Act of 2010 (PPACA).
Even then, a key provision of the law — denying states federal Medicaid subsidies if they did not agree to expand that program — still went down, substantially complicating prospects for PPACA’s success.
Now another significant legal challenge is bearing down upon the law, and right at the heart of that court case are decisions made four years ago by U.S. Senate Majority Leader Harry Reid.
Article I, Section 7, clause 1 of the U.S. Constitution provides that "All Bills for raising Revenue shall originate in the House of Representatives."
However, PPACA was cobbled together by Sen. Reid and others from three different bills, all of which originated within the Senate, not the House. And the Obamacare bill most definitely raised revenue.
About two hours after the D.C. Circuit panel found against the administration's use of the Internal Revenue Service, another appeals court, that of 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.”
The administration signaled it will seek to get the entire DC appeals to reverse the three-judge panel's decision. Regardless, legal observers are certain the question will eventually go to the U.S. Supreme Court.