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Harry Reid Might Have Saved Obamacare by Going Nuclear

The ACA subsidies decision likely will be overturned by the full appeals court

Getty Images/Chip Somodevilla

When Senate Majority Leader Harry Reid undertook the “nuclear option” in the Senate last November so that executive appointments and non-Supreme Court judicial nominations could be passed by a majority vote, he probably didn't know the move could save Obamacare. But that just might happen.

Before Democrats went nuclear, the Senate required a 60-vote threshold for all of President Barack Obama’s executive branch nominations and judicial appointments. Republicans used that power liberally, blocking numerous positions just because they didn’t like certain federal agencies. Reid and his Democrat colleagues eventually had enough and changed the threshold to 50 votes. Democrats could approve the nominations without any Republican support.

That’s exactly what they’ve done over the past seven months, including approving the nominations of three left-leaning judges to the D.C. Circuit Court. That court has jurisdiction over the regulations issued by many federal agencies. On Tuesday, a three-judge panel on the D.C. Circuit ruled in the Halbig v. Burwell case that the subsidies in the Affordable Care Act are illegal in the 36 states that did not set up their own insurance exchanges. In other words, anyone who signed up through the federal exchange is ineligible for subsidies. As The New Republic’s Jonathan Cohn has written, this ruling, if upheld, could undermine the law. If millions of Americans cannot receive subsidies, then they will be unable to afford health insurance. The Affordable Care Act could collapse.

That won’t happen yet. The administration is likely to ask the entire D.C. Circuit to review the decision “en banc.” Here’s where the Democrats’ use of the nuclear option is important. The D.C. Circuit has 11 judges on it, seven Democratic appointees and four Republican ones. The only reason Democrats have a majority is due to the nuclear option. As University of Michigan law professor Nicholas Bagley explains at The Incidental Economist, the D.C. Circuit will likely review the decision and vacate Tuesday’s ruling—all because of those extra three judges.

“There's no doubt that having a court with more members appointed from the left will end up having real consequences for the en banc decision, in terms of whether they take the case and the eventual outcome,” Bagley told me.

If the full D.C. Circuit does overturn the ruling today, the appellants could appeal to the Supreme Court. Given the prominence of the case, that might just happen—in which case, the nuclear option doesn’t matter. But it is not guaranteed.

“Obviously, the composition of the D.C. Circuit doesn't have anything to do with how the Supreme Court will eventually rule,” Bagley said. “Buying an en banc victory may not be worth much if you don't buy a Supreme Court victory with it. On the other hand, if you win at the en banc level, it's not completely obvious that the Supreme Court hears the case.

“I think the likelihood that the Supreme Court gets involved is likely high just by dint of having this panel decision,” he added. “But I think there is some chance that a favorable en banc ruling would forestall a Supreme Court review.”

In the absence of the nuclear option, Democrats weren’t screwed. They could have still appealed to the entire D.C. Circuit to review the decision and even if they did not win there, they could have appealed the case to the Supreme Court. As with the original Obamacare Supreme Court case, that would have likely left the fate of the law in the hands of Chief Justice John Roberts. Thanks to Senate Democrats' use of the nuclear option, the administration has a chance to avoid that.