Halbig versus Burwell is the famous lawsuit that claims that Obamacare federal health insurance exchanges cannot pay tax credits to health insurers. The plain language of the law is that only state-based Obamacare health insurance exchanges can channel these tax credits. The real champions of this argument are Michael Cannon and Jonathan Adler of the Cato Institute, who recently encapsulated their argument in the Wall Street Journal.
The question is still unsettled. Last week, two different Circuit Appeals Court panels came to different conclusions: The DC Circuit agreed that the subsidies could only go to insurers in state exchanges; while the 4th Circuit ruled that they could go through federal exchanges too.
The Administration is horrified that the Supreme Court could decide that it is illegal to subsidize insurers in federal exchanges. Most states have declined to set up their own exchanges. Further, some of those that did are closing up shop.