WASHINGTON – A federal court is about to rule on an argument against President Barack Obama's health care reform law that resembles one Rep. Scott DesJarlais advanced more than two years ago.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia is expected to rule sometime this week, maybe as early as Tuesday, on a case involving the Affordable Care Act called Halbig vs. Burwell, which raises the same point DesJarlais, R-Jasper, raised through legislation he proposed in 2012.
His argument was — and is — that the actual wording of the law authorizes the Internal Revenue Service to extend tax credits and penalties to individuals and businesses in state-run health care exchanges but not to those in federally-run exchanges.
If the court agrees, some legal scholars see it as a potentially devastating blow to the Affordable Care Act.
The Obama administration has interpreted the tax provisions as applying to both kinds of exchanges and says the context of the bill makes that clear.
"This matter goes to the very heart of our constitutional separation of powers," DesJarlais said in a statement. "The Obama administration unilaterally rewrote a major section of the president's health care law, an action that clearly violates the Constitution's directive that only Congress has the authority to create and amend laws."
DesJarlais added, "If the court does indeed strike down this provision, our state would no longer be subject to many of the penalties contained in Obamacare."
DesJarlais was part of a group of two dozen congressional Republicans who started questioning the wording of the lawnear the end of 2011.
The exchanges are the market places — essentially websites operated by government agencies or nonprofits — where consumers go to purchase health plans from competing companies. The law gave states the option of establishing their own exchanges or relying on the federal government to run one for them.
Only 16 of 50 states established their own exchanges. Tennessee was one of 34 that opted to depend on a federal exchange.
A key to making the exchanges work is the awarding of subsidies, through tax credits, to many who buy policies through them. Many businesses are supposed to pay tax penalties if they don't offer policies of their own, forcing workers to rely on the exchanges.
As passed, the law talks about the tax provisions applying only to state-run marketplaces, not federal, some legal scholars say.
George Washington University law professor Jonathan Turley said the D.C. Court of Appeals case poses a much bigger threat to the health care law than the Supreme Court's Hobby Lobby decision last week. In that case, justices said owners of privately run companies could not be forced to offer health coverage for contraception methods that violate their religious beliefs.
"I think the challengers (in Halbig) have a very strong case," Turley said in an interview Monday. He said it could cause the Affordable Care Act to suffer "cardiac arrest."
But law professors from the University of California-Berkeley and University of California-Davis argued in a paper earlier this year that federal courts have traditionally given the IRS considerable discretion in interpreting ambiguous statutes.
"At the very least, we believe we have established that the statute is ambiguous on this issue and that Treasury and the IRS have arrived at a reasonable interpretation worthy of deference," wrote David Gamage and Darien Shanske.
DesJarlais, though, said "these unconstitutional actions by the IRS" drove him to introduce his bill in the 112th Congress.
He added, "It was also the reason I advocated for Tennessee not to create a state-run exchange."