The Stakes Beyond the Halbig Lawsuit

This was published as a Wall Street Journal Think Tank column on July 25, 2014.

A lot of attention is being paid to the dueling decisions in two U.S. appeals courts about whether the U.S. government can provide tax credits to people in federal- as well as state-run insurance exchanges. In human terms, the stakes are high:  Millions of moderate-income people will not be able to afford health coverage without a subsidy, and a court ruling could gut coverage expansion in the 36 states with federally run insurance exchanges, unless states decide to set up their own exchanges. One of the cases, Halbig v. Burwell, also adds uncertainty to the enrollment process set to begin this fall, when millions more people are expecting to get tax credits–and wondering if they may be taken away.

Amid the reaction, little attention has been paid to whether Americans will perceive Halbig as a legitimate legal question or as more inside-Washington politics. The plaintiffs paint this as a case about statutory language and intent. The health-care law said that tax credits would be provided only in state-run exchanges, they argue, and it is executive overreach to provide credits in federal exchanges. Proponents of the Affordable Care Act see this as a thinly veiled game of gotcha being played over imperfect legislative language despite clear legislative intent. They believe that providing tax credits in the exchanges was always a central element of the Affordable Care Act’s strategy to expand coverage whether in state or federal exchanges–and that everybody knows it.

Which framing prevails–if one does–matters politically as well as legally. The public generally objects when people view anti-ACA measures as Washington shenanigans. This happened when critics pushed measures to defund the health-care law to undermine implementation. Fifty-seven percent of the public opposed defunding, Kaiser Family Foundation polling found last August, a far higher share than supports the law, largely because they felt that using the budget process to stop a law was not playing by the rules. It’s possible that perceptions of Halbig would split along partisan lines–as so much involving the ACA does–with Republicans viewing it as a legitimate legal challenge and Democrats seeing it as more political gamesmanship. But that is not what happened with ACA defunding, which was opposed by a third of Republicans.

The seemingly endless health-care wars have caused a majority of Americans to say that they are tired of hearing candidates talk about the ACA and that they would like to hear candidate talk about other issues. Most, 59%, also say they want the ACA improved, not repealed. Would a Halbig ruling hollowing out the ACA be seen as a partial repeal by another means?

Politicians should recognize that this is not just another battle over the Affordable Care Act. Depending on whether Halbig comes to be seen as a legitimate legal issue or another partisan political war playing out in the courts, this is another lawsuit that could shake public faith in our political and judicial systems.