More than a year after the Supreme Court upheld the central provision of President Obama’s health care overhaul, a fresh wave of legal challenges to the law is playing out in courtrooms as conservative critics — joined by their Republican allies on Capitol Hill — make the case that Mr. Obama has overstepped his authority in applying it.
A federal judge in the District of Columbia will hear oral arguments on Tuesday in one of several cases brought by states including Indiana and Oklahoma, along with business owners and individual consumers, who say that the law does not grant the Internal Revenue Service authority to provide tax credits or subsidies to people who buy insurance through the federal exchange.
The subsidy lawsuits grow out of three years of work by conservative and libertarian theorists at Washington-based research organizations like the Cato Institute, the American Enterprise Institute and the Competitive Enterprise Institute. The cases are part of a multifaceted legal assault on the Affordable Care Act that began with the Supreme Court challenge to the law and shows no signs of abating.
“After the A.C.A. was enacted and after the president signed it, a lot of people — me included — decided that we weren’t going to take this lying down, and we were going to try to block it and ultimately either get the Supreme Court to overturn it or Congress to repeal it,” said Michael F. Cannon, a health policy scholar at the libertarian-leaning Cato Institute, who helped develop the legal theory for the subsidy cases and will testify in the House on Tuesday.
The seeds of the subsidy cases were planted as far back as December 2010, when Thomas P. Miller, a scholar at the American Enterprise Institute, convened a forum to explore legal avenues to undo the health law. By spring 2012, even before the Supreme Court had ruled on the constitutional challenge to the “individual mandate” — the requirement that nearly all Americans purchase insurance or pay a fine — Mr. Miller said he approached Sam Kazman, general counsel of the Competitive Enterprise Institute, about finding plaintiffs.
The implications of this suit are hard to quantify. As I wrote yesterday, it would obliterate the exchanges.
The subsidy cases, if successful, would strike at the foundation of the law. Subsidies and tax credits, which could be available to millions of low- and middle-income Americans, are central to Mr. Obama’s promise of affordable care. In drafting the law, Congress wrote that such help would be available to people enrolled “through an exchange established by the state” under the law.
But since passage of the Affordable Care Act in March 2010, the vast majority of states — roughly three dozen — decided not to set up their own exchanges, in part because many Republican governors opposed the law. That has left HealthCare.gov, the online federal exchange, to handle the bulk of enrollment requests.
If courts rule that customers cannot get subsidies through the federal exchange, it would “make the HealthCare.gov problems look like a hiccup,” Mr. Cannon said.