Obamacare advocates caught a potentially big victory Thursday in an ongoing legal battle to protect billions of dollars worth of subsidies for nearly 5 million people who bought insurance on HealthCare.gov.
That court in Washington, D.C., said its full judicial line-up will rehear arguments on Dec. 17 in that case known as Halbig v. Burwell, where plaintiffs claim the financial aid given customers on the federal insurance exchange HealthCare.gov are illegal under the Affordable Care Act.
The move by the D.C. appeals court, which was requested by the Obama administration, also may well prompt the U.S. Supreme Court to hold off, for now, on considering an appeal of a second, virtually identical case. That could protect the subsidies for at least a year or more.
Legal experts anticipate that December's rehearing by the full court, a so-called en-banc review, will lead to a victory for Obamacare advocates who want to maintain those subsidies.
That's because a majority of judges on the U.S. Court of Appeals for the District of Columbia Circuit are appointees of Democratic presidents. In contrast, the two appeals judges on the court who voted in late July to invalidate the subsidies were both appointed by Republican presidents, while the one judge who voted to uphold them was a Democratic appointee.
Democratic appointees would hold a three-vote margin in an en-banc review of Halbig. That margin came into effect last winter, when President Barack Obama finally got Senate approval for three of his nominees to that bench over Republican opposition.
The confirmations came only after a dramatic political move by Senate Majority Leader Harry Reid, D-Nev., who forced through a series of rule changes that allowed confirmation of most federal judges to be approved by a simple majority of senators, instead of the former 60-vote rule that Republicans were using to block the nominees.
The en-banc review panel will include not only the 11 active judges on the circuit, but also the two senior judges who were on the panel that issued the now-vacated decision in July. One of the senior judges, Raymond Randolph, was part of the majority opinion written by active Judge Thomas Griffith that found the subsidies were illegal. The other senior judge on the panel, Harry Edwards, strongly dissented.
Obamacare expert Timothy Jost said it is "quite unusual" for the D.C. Circuit to grant an en-banc review, and suggests that a majority of the judges will reject the challenge to the subsidies.
"They wouldn't have taken a review unless they thought there was something questionable about the opinion" by the three-judge panel, said Jost, a law professor at Washington and Lee University who has repeatedly jousted with advocates of the subsidy challenge.
That decision, which came as a stunning blow to the Obama administration, was based on arguments that the Affordable Care Act explicitly authorizes federal subsidies only for people who buy health plans on exchanges set up by individual states.
Because the ACA is silent on any subsidies being issued to enrollees on a federally run exchange, such as HealthCare.gov, such financial aid is not legal, according to a theory advanced by Michael Cannon of the libertarian Cato Institute and Jonathan Adler, a professor at Case Western Reserve University School of Law. Just 14 states and the District of Columbia set up Obamacare exchanges—the rest of the country is served by HealthCare.gov.