What’s next for ObamaCare in the courts?

Two federal appeals courts issued conflicting decisions about the future of ObamaCare on Tuesday. In one, the Halbig v. Burwell decision, the U.S. Court of Appeals for the D.C. Circuit ruled that the Affordable Care Act means what it says: ObamaCare insurance subsidies are only available in states that have established their own health-insurance exchanges,...

Two federal appeals courts issued conflicting decisions about the future of ObamaCare on Tuesday.

In one, the Halbig v. Burwell decision, the U.S. Court of Appeals for the D.C. Circuit ruled that the Affordable Care Act means what it says: ObamaCare insurance subsidies are only available in states that have established their own health-insurance exchanges, and an IRS rule that tried to make these subsidies available in all states – even those, such as Illinois, which did not create their own insurance exchanges – is invalid.

In the other case, King v. Burwell, the U.S. Court of Appeals for the Fourth Circuit, which sits in Virginia, reached the opposite conclusion, ruling that Congress intended to make subsidies available in all states – even though that’s not what the law says – and therefore the IRS rule could stand.

The decisions are important because, as Newsweek has put it, if the IRS rule is ultimately struck down, the entire ObamaCare system “could come crashing down in the 36 states that have opted not to run their own exchanges.”

But what happens now, with conflicting decisions from different courts?

The short answer: nothing yet.

The Courts of Appeals could rehear the cases

In either of these cases, the losing party – the government in Halbig, or the plaintiffs in King – has 45 days to ask the Court of Appeals in question to rehear the case “en banc” – that is, with all of the judges of the court hearing the case instead of just the usual three-judge panel. A Court of Appeals can rehear the case if a majority of its regular active judges votes to do so.

Today’s ruling in Halbig will not take effect until the lower court orders the IRS to stop enforcing its rule, as the Court of Appeals has directed. The lower court will only do that after it receives a “mandate” from the Court of Appeals. And the Court of Appeals will not issue its mandate until the 45 days to petition for rehearing have passed or the court votes to deny rehearing, whichever is later. The Court of Appeals has seven days after that to issue the mandate.

If either Court of Appeals decides to rehear its case en banc, then today’s decision in that case will be vacated – it will be as though it was never issued, and the court’s new decision after rehearing will control. Democrat-appointed judges have a strong majority on both courts, so the government probably has some confidence that it will in any rehearing.

An en banc rehearing in either case would almost certainly take six months to a year.

The Supreme Court could hear the case

It’s therefore no surprise that the government reportedly intends to seek en banc review in the Halbig case. The plaintiffs could also do so in the King case.

But they don’t have to – the losing side in either case could instead go straight to the Supreme Court to seek review there.

The losing side has 90 days in which to request Supreme Court review. That 90 days runs from today unless either party seeks rehearing in the Court of Appeals, in which case the 90 days runs from the court’s denial of rehearing – or, if the Court of Appeals grants rehearing, from the date of the court’s new decision after rehearing.

In Halbig, the government can ask the D.C. Circuit Court of Appeals to stay its mandate – that is, to hold off on ordering the district court to carry out its instructions – to preserve the status quo while its petition to the U.S. Supreme Court is pending. It’s likely that the Court of Appeals would grant that request. If so, Halbig would not take effect unless and until the Supreme Court denied review. In the unlikely event that the Court of Appeals denied a stay, today’s decision in Halbig would take effect after the Court of Appeals issued its mandate and the district court issued its order – all of which would occur at some point in the next two months or so. Then the IRS rule would be enjoined unless until the Supreme Court reversed today’s decision.

Supreme Court review would likely take an additional year beyond any rehearings in the Courts of Appeals.

Is the Supreme Court likely to take up the issue? It probably depends on whether today’s decisions stand. If, after any rehearings occur, the decisions are still in conflict (one upholding the IRS rule, one striking it down), then the Supreme Court would almost certainly step in to resolve that conflict. But if the two courts end up agreeing – especially if they both side with the government – then the Supreme Court may stay out of it. Typically, the Supreme Court only takes cases where it’s necessary to resolve a conflict between two Circuit courts or to address an exceptionally important issue. Although this issue is exceptionally important, the Court might decline to hear it to avoid having to issue yet another controversial ObamaCare decision.

In any event, despite today’s huge victory for ObamaCare opponents in Halbig, nothing is going to change anytime soon. Whatever route either side takes, this legal battle will likely continue for at least another year or two – and we’ll all have to keep living with ObamaCare in the meantime.