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HHS wins Halbig PPACA premium subsidy rehearing

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A federal appeals court is having second thoughts about a ruling on Halbig et al. vs. Burwell et al. (Case Number 14-5018) that could have crippled the public health insurance exchange system.

The full D.C. Circuit U.S. Court of Appeals has vacated a Halbig ruling that a three-judge panel at the court issued July 22. The full court plans to hear oral arguments on the case Dec. 17, according to the court order announcing the decision.

Lawyers for Jacqueline Halbig and other plaintiffs in the case have argued that the Patient Protection and Affordable Care Act (PPACA) calls for the government to provide premium subsidies only for consumers who buy qualified health plan (QHP) coverage through state-based PPACA exchanges. PPACA does not authorize the exchanges run by the U.S. Department of Health and Human Services (HHS) to provide QHP premium subsidies, the plaintiffs say.

HHS and the new HHS secretary, Sylvia Mathews Burwell, have argued that the drafters of PPACA clearly meant to provide premium subsidies for users of both the state-based and HHS-run exchanges.

The three-judge D.C. Circuit panel voted 2-1 in favor of Halbig. Later on July 22, a three-judge panel at the 4th U.S. Circuit Court of Appeals voted 3-0 in favor of HHS in a ruling on a similar case, King et al. vs. Burwell et al. (Case Number 14-1158). In the King ruling, the judges argued that the language in PPACA is ambiguous and that PPACA gives HHS the authority to resolve ambiguities in the PPACA exchange provisions.

In some states, officials who support PPACA have let HHS run the states’ PPACA exchange programs because of concerns about the states’ ability to run an exchange. In other states, HHS is running the PPACA exchanges because officials have actively refused to participate in the exchange program.

Some commentators have suggested that the judges on the full D.C. Circuit are more liberal than the judges on the original three-judge Halbig panel and are more likely to issue a ruling that would let HHS continue to provide premium subsidies for HHS exchange QHP buyers. If the full D.C. Circuit appeals court ruled against HHS, and the Supreme Court ended up letting a ruling against HHS stand, HHS might have trouble running viable exchanges in states in which premium subsidies were unavailable, because about 90 percent of the enrollees at the HHS-run exchanges are getting premium subsidies. The subsidies are cutting the share of QHP premiums that the enrollees pay out of their own pockets by an average of about 75 percent to 85 percent.


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