I have previously blogged about an important case — Halbig v. Sebelius — before the U.S. District Court for the District of Columbia (DDC). The case concerned whether the Affordable Care Act permits the IRS to issue tax credits to individuals purchasing insurance through federally facilitated exchanges. In short, the challengers argued that because section 1401 of the ACA calculates tax credits only for individuals purchasing insurance through “an Exchange established by the State,” individuals purchasing insurance through an exchange established by the federal government cannot receive such tax credits.
Yesterday, DDC sharply rejected this argument, finding that the ACA — read as a coherent whole — requires the IRS to issue tax credits to individuals purchasing insurance through either a state or a federal exchange. Needless to say, this case represents a triumph for the government. For now (cases on the same issue are still pending in other districts, and this opinion will almost certainly be appealed to the D.C. Circuit), the government has dodged today’s biggest threat to the vitality of the ACA.
The substance of the case was summarized well by Professor Bagley over at the Incidental Economist. So rather than dwell on the (very persuasive) reasoning of the court, I want to focus on one important doctrinal move in the case (after the jump):