What? Another Court Case About ObamaCare?

I confess I never expected to see the Republican governors and legislator of the red states getting behind a lawsuit that claims a drafting error has deprived their constituents of $10 billion a year–after all, I was told back at the start of 2009 that the reason that ObamaCare was going to be RomneyCare because then the Republicans would have no choice but to endorse what had been the principal policy accomplishment of the guy who was going to be their 2012 standard bearer.

Strange times indeed…

Anyway, Nicholas Bagley explains what is going on:

Nicholas Bagley: A resounding victory for the administration in the exchange litigation: “I wrote yesterday about the pending litigation over the IRS’s decision to make tax credits available on federally operated exchanges, notwithstanding a facially plausible statutory argument that doing so would contravene the ACA.

My timing was good: earlier today, Judge Friedman, a district court judge in D.C., released the first opinion… a resounding victory for the government… tracks the analysis I laid out yesterday. He starts with the observation that… tax credits are linked to health plans purchased on exchanges “established by the State under 1311.” And federally operated exchanges are established by the Secretary of HHS under §1321…. But Friedman also points out that… §1321… [says] when a state fails to establish a workable exchange, the ACA instructs the Secretary to establish “such exchange.” That little word “such” clarifies that an exchange established by the federal government is a 1311 exchange….

To reinforce the point, Friedman walks through provisions of the ACA that would make little sense if federal tax credits were unavailable on the exchanges. Why would the ACA require federal exchanges to inform the IRS when they give tax credits to people if they’re not allowed to give them tax credits at all?… The ACA says that only “qualified individuals” can purchase plans on the exchange, but defines “qualified individual” to be someone who “resides in the States that established the exchange.” “If this provision were read literally,” Friedman writes, “no ‘qualified individuals’ would exist in the thirty-four states with federally-facilitated Exchanges.… The federal Exchanges would have no customers, and no purpose.”…

The challengers’ interpretation, he says, “runs counter to this central purpose.” Accepting it “would violate the basic rule of statutory construction that a court must interpret a statute in light of its history and purpose.” At any rate, even if the statute were ambiguous—and Friedman is crystal clear that he doesn’t think it is—the administration’s interpretation… would be upheld as a “permissible construction”…. Where does the case go from here?… The D.C. Circuit… will probably hear the case sometime this fall. I doubt, however, the challengers will have any better luck on appeal. Friedman’s analysis of the statutory text is very convincing…. Plus it probably doesn’t hurt that Democrats now outnumber Republicans on the circuit court. After the D.C. Circuit, it’s anyone’s guess whether the Supreme Court will choose to hear the case…