Naomi Lopez Bauman Jun. 27, 2014, 11:22am

The U.S. Court of Appeals for the D.C. Circuit’s imminent decision in Halbig v. Sebelius could be an important step in toppling ObamaCare.

The central issue in Halbig v. Sebelius is whether the Internal Revenue Service can provide tax credits to individuals, as well as impose penalties on employers, in states that did not establish their own health-insurance exchanges. Four individual and three employer plaintiffs from six states that did not establish state-based health insurance exchanges under ObamaCare originally filed their case in May 2013.

This case is of particular importance for Illinois, since the state did not establish its own state-based insurance exchange. The importance of this case was summed up in a Newsweek article titled, “The Case That Could Topple Obamacare”:

“At issue are the federal subsidies for individuals buying insurance in their state’s health care exchanges. The law stipulates that those subsidies should be allotted for plans purchased ‘through an Exchange established by the State under Section 1311’ (italics added), a reference to the section of the law that establishes state-run exchanges …

“It may seem like a small problem, but if true, it spells disaster for the Affordable Care Act. Without subsidies, health care on the individual market becomes unaffordable. Without an affordable option, the individual and employer mandates disappear. In other words, the entire law could come crashing down in the 36 states that have opted not to run their own exchanges.”

The stakes in the Halbig v. Sebelius case are high, but it isn’t the last word. It represents just one case in a long line of lawsuits working their way through the court system that could threaten implementation of the entire law. Regardless of whether lawmakers want to repeal or tweak this calamitous law, the courts may ultimately have the final say.

Naomi Lopez Bauman is Director of Health Policy for the Illinois Policy Institute. 

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