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Editorial: Dueling Verdicts on Obamacare

First, blame Congress. Generally a useful rule these days, it certainly holds when considering Tuesday’s worrying, though possibly temporary, setback for the Affordable Care Act in the U.S. Court of Appeals for the District of Columbia Circuit. Blame Democrats who pressed through a bill containing contradictory language. Blame Republicans who, in their drive for full repeal, have declined to fix the ambiguities and unintended consequences that turn up in any sizable piece of legislation.

Blame the District of Columbia Circuit, too, for an unwise and unnecessary ruling that would dismantle much of the Affordable Care Act system that has been slowly taking hold. The court would have us believe that the law’s text is so clear that it requires a bizarre, counter-productive result. In fact, on the point in question, the text is a vague mess and the court’s interpretation of the language is at odds with the law’s obvious intent and with normal deference to executive interpretation — as the Fourth Circuit more sensibly ruled at almost the same moment.

The dispute concerns who is eligible for federal subsidies to buy private health-care insurance. People in states that set up their own marketplaces, such as Maryland, buy insurance there. In states that chose not to establish marketplaces, such as Virginia, people purchase coverage on marketplaces the federal government created. The Obama administration claims that, whether you are buying on a state or federal exchange, you should be eligible for federal tax credits if your income is below defined limits. Opponents of the law contend that its text bars the people buying on federal exchanges from getting the tax credits. If the opponents’ view prevails, some 5 million people currently taking government assistance and millions more who would qualify in the future would lose their eligibility for federal help. Coverage again would be unaffordable for many, and fledgling insurance markets all over the country would collapse.

Typically, federal agencies get wide leeway in interpreting laws, except when the law is so unambiguous that the administration’s interpretation can’t be sustained. The D.C. Circuit concluded that a reference to exchanges “established by the states” is so clear that it had no choice but to bar subsidies in the 36 federal-marketplace states. But shortly after the D.C. Circuit ruled, the U.S. Court of Appeals for the Fourth Circuit disagreed strongly in a near-identical case, noting several other provisions in the law that point to a much more sensible interpretation: that federal tax credits should be widely available.

Given the contradictions, the administration’s interpretation deserves deference. That is particularly true because the administration’s reading accords with the law’s obvious intent: to offer affordable health-care coverage to a large number of Americans.

The full D.C. Circuit should reconsider and reverse its panel’s 2-to-1 ruling. Then the Supreme Court should let the administration’s interpretation stand, instead of taking the case and prolonging the ACA’s legal limbo.

The Washington Post