On July 22, the D.C. Circuit held that the Health and Human Services Department’s program for health care exchanges violated the Affordable Care Act’s unambiguous terms. Boyden Gray & Associates had filed an amicus brief on behalf of the Galen Institute, challenging the rule. The case is Halbig v. Burwell.

The Act authorizes HHS to grant subsidies for health insurance purchased on exchanges “established by the State,” but it makes no such authorization for exchanges established by HHS in States that declined to establish their own exchanges. (Only fourteen States set up their own exchanges; HHS established exchanges for the other thirty-six States.) Nevertheless, HHS unilaterally chose to extend the subsidies — and the corresponding burdens and requirements — to HHS-established exchanges as well, arguing that Congress actually intended to cover HHS exchanges.

The D.C. Circuit rejected this argument, stressing that “an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.”