In Halbig v. Burwell, the second most important court in the land (the U.S. Circuit Court of Appeals in Washington, D.C., from whence came Justices Scalia, Thomas, Ginsburg, and Roberts) has triggered a fatal error that will shut down Obamacare in much of the nation. Obamacare provides subsidies (through a tax credit) to consumers who purchase insurance policies on an “Exchange established by the State.” Under the law, a State is defined as the 50 states and the District of Columbia. But in the 36 States that refused to establish these exchanges (which are government-run marketplaces, a very contradiction in terms), Obamacare authorized the Department of Health and Human Services to set up a federal Exchange instead.
The limitation of the subsidy to state-run exchanges means that no federal subsidy will be available to help individuals purchase insurance in those states that did not set up an exchange — which will lead to the collapse of the individual mandate as the young, working, and healthy stay out of the exchanges. As both Judge Thomas Griffith for the majority and Judge Harry Edwards for the dissent recognize, this subsidy works in tandem with many other parts of the Obamacare system and its absence will probably bring the whole contraption to a grinding halt. It seems likely to paralyze the whole U.S. health-care system as insurers and consumers struggle to confront the huge mass of conflicting regulations, ambiguities, and mandates. If ever we needed proof of Hayek’s Nobel Prize–winning theory that human regulators cannot manage the millions of daily decisions in an economy as well as the private markets, this is it.
But the case is not just important for this impact on the rest of the Obamacare system. It is also a chance for the federal courts and Chief Justice John Roberts to redeem themselves. In the first Obamacare challenge to reach the Supreme Court (where this case is headed like a bullet train) two years ago, recall that Roberts joined with the four liberal Justices (Ginsburg, Breyer, Sotomayor, and Kagan) to rewrite Obamacare’s punishment for failing to purchase an individual insurance policy into a giant tax. This had the effect of saving the statute from its fundamental constitutional defect — regulating beyond Congress’s power over interstate commerce — but forced the Court to engage in rewriting legislation rather than interpreting it. Under our Constitution’s separation of powers, rewriting stupid, inefficient, or mistaken laws is the job of congressmen, not judges.
As before the lower court and the D.C. Circuit, the Obama administration will again plead for the judges to rewrite Obamacare to avoid absurd results. President Obama will be inviting the Supreme Court to join him in the dereliction of his constitutional duty to faithfully execute the laws. Here, President Obama simply wants the courts to say that a “state” includes the federal government — that would allow the subsidy to apply throughout the country. The only problem is that the text of the law passed by Congress — by a single vote in the Senate — clearly excludes this possibility. Sometimes judges will correct an obviously absurd result — calling for the construction of a bridge over a river, for example, that does not actually exist. But here, the result is not absurd, it’s simply a bad idea. In areas such as Obamacare itself, immigration, education, and welfare, President Obama has similarly rewritten the laws to advance his preferred policies, rather than those passed by earlier Congresses and signed by earlier presidents.
Roberts need not accept the invitation to creatively rewrite an act of Congress to improve it, but instead keep to a judge’s proper role of only interpreting the law, not making it. The same forces that pressured him to uphold Obamacare two years ago will no doubt reappear — recall President Obama’s State of the Union attack on the Court, Democratic senators launching preemptive assaults on Roberts, and media and academic criticism of the Court before the decision even came out. If Congress wrote an inadequate, misguided, or inefficient law, it is Congress’s fault. It is Congress’s responsibility under our Constitution to repair the law. By rewriting the law instead, Chief Justice Roberts would be undermining the accountability that lies at the root of our democratic system, for the voters would not know whether to hold their legislators responsible for the errors of Obamacare. In Sebelius two years ago, the position of judicial restraint may have militated in favor of upholding Obamacare despite its many constitutional defects. But here, Roberts need not exercise the awesome power of judicial review — the position of restraint now simply requires the law to go forward as written. This case will give the Chief Justice the opportunity to atone for his judicial sin of two years ago. Not many judges have the chance to make up for the mistakes of the past. Let’s hope he takes advantage of the opportunity.