Recent news coverage concerning Obamacare’s legal difficulties has been dominated by King v. Burwell, which challenges the controversial IRS decision to issue subsidies and penalties through federally created insurance exchanges in 34 states that refused set up PPACA “marketplaces.” The Supreme Court announced last month that it would take up King, and it will hear oral arguments in March. The alacrity with which the Court took up the case, upon which it will hand down a ruling in June, has rendered the law’s supporters nearly hysterical. But King is by no means the only legal threat Obamacare will face next year.
Ironically, considering the number of apocalyptic headlines it has produced, King v. Burwell probably presents less danger to the “reform” law than either of two additional lawsuits the Court could take up in 2015. The justices have already received a cert petition to hear Coons v. Lew, whose plaintiffs hold that Obamacare’s Independent Payment Advisory Board (IPAB) constitutes a violation of the separation of powers doctrine. And it is a virtual certainty that the Court will also be asked to take up Sissel v. HHS, which challenges the law on the grounds that its passage violated the Constitution’s origination clause.
Both challenges are potentially more lethal because, unlike King, they constitute direct threats to the law itself. King v. Burwell, inaccurate media reports notwithstanding, isn’t actually a challenge to Obamacare. Its plaintiffs merely want the IRS to follow the letter of the law when granting tax credits and imposing fines. PPACA stipulates that subsidies and penalties must emanate from exchanges “established by the state.” The IRS has, however, arrogated the power to issue them through federally created exchanges as well. If David King and his co-appellants prevail, it simply means the law will operate as written.
This would obviously complicate the law’s already-chaotic implementation by requiring Obamacare enrollees in the affected states to pay the exorbitant costs of their health coverage rather than premiums and out-of-pocket expenses rendered artificially low by taxpayer-funded subsidies. That would, in turn, cause PPACA to implode in those states. But Congress has the power to pass legislation curing that problem and many of the law’s other defects. Unless the President is blindly intransigent and refuses sign such a bill, a Supreme Court ruling against his administration in King could be a blessing in disguise.
Congress would not, however, be in a position to rescue the law if the Court takes up Coons v. Lew and Sissel v. HHS and rules against the Obama administration in either case. A ruling against the government in Coons, for example, would mean that a crucial component of Obamacare itself does such violence to the separation of powers doctrine implicit in the Constitution that the justices simply could not permit it to stand. As the Coons cert petition puts it, “IPAB violates the principles of separation-of-powers by consolidating the executive, judicial, and legislative powers while being accountable to none.”
The Constitution does not permit Congress to cede its legislative powers to any other branch of the government. Yet, this is precisely what the Democrats did in the case of IPAB. Prior to the passage of Obamacare only Congress had the power to make changes to Medicare’s payment rates or coverage. But PPACA transferred that power to IPAB, an Executive branch body whose members will be appointed by the President. An Amicus Curiae brief filed by 25 members of Congress describes IPAB thus: “It is not a mere executive entity; it is an autonomous lawmaking body shielded from democratic checks and balances.”
Consequently, Coons v. Lew constitutes a major threat to Obamacare. However, the law could theoretically survive without IPAB. This is most emphatically not the case if the Court takes up Sissel v. HHS and rules against the Obama administration. Such a decision would invalidate the entire law. The Origination Clause of the Constitution states the following: “All Bills for raising Revenue shall originate in the House of Representatives.” The Sissel challenge is based on the well-documented fact that PPACA, with its long list of new taxes clearly designed to raise revenue, originated in the Senate and is thus unconstitutional.
A three-judge panel from the D.C. Circuit Court of Appeals rejected this argument whereupon the plaintiffs promptly requested a hearing by the full court. An Amicus Curiae brief supporting this request has been also been filed with the appeals court by Randy Barnett, Professor of Legal Theory at Georgetown University. Barnett explains in the Washington Post how the panel got it wrong: “[O]nce the Supreme Court in NFIB v. Sebelius upheld the ‘shared responsibility payment’ solely as a tax… it raised a new constitutional objection. Because the ACA originated in the Senate… it violated the Origination Clause.”
Will the D.C. Circuit be as quick to grant a hearing by the full court in this case as it was when the Obama DOJ made the same request a few months ago? Barnett writes, “Of course, en banc review is rarely granted by the DC Circuit, but given that it recently granted the government’s motion for en banc review of the statutory interpretation case… presumably because of the importance of the ACA, the case for correcting a mistaken constitutional interpretation is even more important.” It’s a good bet that, if this motion is denied, the Supreme Court will shortly thereafter receive a cert petition in Sissel v. HHS.
All of which suggests that the President’s lawyers will be working overtime in 2015. They will probably receive a shellacking in King v. Burwell, and they will have their work cut out keeping Coons v. Lew and Sissel v. HHS away from the Supreme Court. And, for the government lawyers who haven’t had nervous breakdowns or moved to remote cabins by the end of 2015, there are more Obamacare challenges where those came from. Hotze v. Burwell, for example, is a lawsuit filed by a Texas doctor who believes the employer mandate is a violation of the Constitution’s “takings clause.” But that’s grist for another column.