Appeals court panels issue split decision on Obamacare

[Paratus]

I'm not worried. The full en banc court will overturn this ruling.

Today’s twin cases, Halbig v. Burwell and King v. Burwell, pretty much hinge on one section of the ACA: 36B. In that section, Congress wrote that tax credits go to people who buy health insurance in exchanges “established by the State under section 1311.” OK, so let’s go to 1311. What does it say? Section 1311 provides that “each State shall” set up an exchange by the beginning of 2014. If not, we move to Section 1321, which says that the federal government will set up an exchange in the state’s stead. Does that mean Congress intended the same subsidies to go to people who sign up through federally run exchanges as through state-run ones? Yes, say a cadre of experts who know much more about this than I do. To quote one of them, Samuel Bagenstos: “Because Section 1321 provides that a federally-operated exchange will stand in the shoes of a state-operated exchange created by Section 1311, there is no basis for denying participants in federally-operated exchanges the same tax credits obtained by participants in state-operated exchanges.”

This is not the only possible meaning of 36B, because on its face it does say “established by the State.” As Judge Gregory acknowledges, writing for the Fourth Circuit, “the statute is ambiguous and subject to at least two different interpretations.” Why so confusing? Here’s what’s really to blame, as Yale law professor Abbe Gluck writes:

The ACA is a very badly drafted statute. And it’s badly drafted for a simple reason that turns out to be important to understanding how the pending litigation should be resolved: Because Senator Ted Kennedy died in the middle of the legislative process and was replaced by Republican Scott Brown, the statute never went through the usual legislative process, including the usual legislative clean-up process. Instead, because the Democrats lost their 60th filibuster-preventing vote, the version that had passed the Senate before Brown took office, which everyone initially had thought would be a mere first salvo, had to effectively serve as the final version, unchangeable by the House, because nothing else could get through the Senate.
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Judges Griffith and Randolph aren’t interested in this. They claim that they are interpreting 36B through the lens of the rest of the ACA, and that it is still clear that Congress yanked the subsidies away from all the people signing up through federally run exchanges. The majority opinion even has the gall to claim that it comes in sorrow, not in anger. “We reach this conclusion, frankly, with reluctance,” Griffith writes. “At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still.”

Please. This is not about deferring to Congress. It’s about reading a text so myopically that you miss its larger meaning. More from Gluck: It “does a disservice to textualism and all those who have defended it over the years—turning it into a wooden unreasonable formalism rather than the sophisticated statutory analysis that textualists have been claiming they are all about.” The IRS lets people get subsidies when they sign up for health insurance, whatever the type of exchange, because this is what federal agencies are supposed to do: Choose the most plausible reading of a law, the one that fits with the consensus understanding of it. That’s how regulations are made. And once an agency has made its choice, courts are supposed to go along, unless it’s clear that the agency really blew it. Which is hardly true of granting subsidies to people who sign up for health insurance—the basic mechanism of Obamacare.

 

[Jhhnn]

You're wrong about federal exchanges coming from the SCOTUS. ACA's section 1321(c) states that a State may elect not to establish an exchange and if so, the the Secretary of health and human services shall establish and operate such Exchange within the State.
http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-111hr3590enr.pdf

Also states always had the ability to opt out of the Medicaid expansion, The supreme court struck down the penalty for opting out, aka withholding existing medicaid funding.

This ruling is following: The plain text in sec. 1401. clearly states that subsides are for taxpayers enrolled through an Exchange established by the State under 1311. The Federal government isn't a state, therefore federal exchanges don't get subsides. here's the court opinion:
http://www.cadc.uscourts.gov/internet/opinions.nsf/10125254D91F8BAC85257D1D004E6176/$file/14-5018-1503850.pdf

By the way, The individual mandate get weaker, the employer mandate disappears and their tax revenue goes down if this ruling stands. The individual mandates has exemption for people whose lowest cost plan after tax credits cost more than 8% of their income. The employer mandate disappears because it requires an employee to sign up for a plan with a subsidy.

Legalistic dancing on the head of a pin.

So, uhh, if the feds set up state level exchanges in each non conforming state & operated it on the state's behalf then it would be OK, right?

Of course states always could opt out- none would pay the penalty of losing all medicaid funding had the scotus not ruled as they did. It's like saying that removing the penalty for robbery doesn't effectively legalize robbery.

 

[Jaskalas]

I'm not worried. The full en banc court will overturn this ruling.

Because Judges should ask themselves, "What would Kennedy do?"

The ACA is a very badly drafted statute. And it’s badly drafted for a simple reason that turns out to be important to understanding how the pending litigation should be resolved: Because Senator Ted Kennedy died in the middle of the legislative process and was replaced by Republican Scott Brown, the statute never went through the usual legislative process, including the usual legislative clean-up process. Instead, because the Democrats lost their 60th filibuster-preventing vote, the version that had passed the Senate before Brown took office, which everyone initially had thought would be a mere first salvo, had to effectively serve as the final version, unchangeable by the House, because nothing else could get through the Senate.

Judges Griffith and Randolph aren’t interested in this.

The argument made is that they should be interested in politics and not the letter of the law. Un-!@#$%^& believable. Let's ignore what Congress / President chose to sign, and focus on what we want it to say...

Judicial activism is becoming far worse if THIS is the conversation today.

 

[pcgeek11]

You have to pass this bill to see what is in it!

 

[theeedude]

Because Judges should ask themselves, "What would Kennedy do?"



The argument made is that they should be interested in politics and not the letter of the law. Un-!@#$%^& believable. Let's ignore what Congress / President chose to sign, and focus on what we want it to say...

Judicial activism is becoming far worse if THIS is the conversation today.

This is what you get from obstruction. Legislative paralysis and government by the courts.

 

[Hayabusa Rider]

There is no Constitutional issue here to decide at all, just interpretation of ACA.

That is true. The courts do have the constitutional authority to resolve conflicts of interpretation. The issue it seems is about what the ACA says vs. what some would like it to say. I'm not qualified to make that call, however I understand someone needs to and thankfully it's none of us "experts" here.

 

[dank69]

I haven't read all the text of the law but this is what I've heard:

The bill had a drafting error. Basically it said HI purchased on state exchanges qualify for subsidies. It did not say Hi purchased on state AND federal exchanges. Thus the one side claims that HI purchased on the federal exchange do NOT qualify for subsidies. The other side claims the bill is vague and should be interpreted as if it did say "and federal".

I work in tax law and such drafting errors are common. In just about every instance a tax bill is passed there will be a so-called 'Technical Corrections Bill' passed the following year to correct such errors.

The common practice, and I mean by far the common practice, for courts is to rule that the plain reading of the text applies. I.e., if what is written is true federally purchased HI would NOT be eligible for subsidies, at least not if adjudicated how tax law usually is.

The problem here is that a technical corrections-type bill will not pass the House.

I don't have the time (nor at this point the interest) but it would be informative, and surely used by the courts, to find the explanation/intent of the law that is often published by Congress to explain and accompany the bill. The House, the senate and the Joint Committee (as least for tax bills) all publish their explanation of the bill, generally including what their intent was.

I.e., if their explanation made clear that HI purchased on the federal exchange was intended to be eligible for subsidy I think the "Dem side" would have a much better chance. However, I have not yet heard of any explanation that was published by the house, Senate or JC (nor have I looked).

Fern

Thanks, Fern. I still have a question though. What legal standing do the plaintiffs have? They aren't the ones paying the subsidies, so is it the penalties business owners have to pay for employees that require subsidies? They are trying to avoid having to pay them by saying the employees don't qualify for the subsidies due to a technicality created by the SCOTUS ruling?

 

[xBiffx]

Thanks, Fern. I still have a question though. What legal standing do the plaintiffs have? They aren't the ones paying the subsidies, so is it the penalties business owners have to pay for employees that require subsidies? They are trying to avoid having to pay them by saying the employees don't qualify for the subsidies due to a technicality created by the SCOTUS ruling?

I would think everyone is entitled to equal protection (or in this case coverage) under the law. Seems that isn't the case if you yank a bunch of people's subsidies because they happen to have registered under the federal exchange and not a state one.

But like you, I'm not up on the legalese of the matter so who knows.

 

[Jaskalas]

I would think everyone is entitled to equal protection (or in this case coverage) under the law. Seems that isn't the case if you yank a bunch of people's subsidies because they happen to have registered under the federal exchange and not a state one.

But like you, I'm not up on the legalese of the matter so who knows.

Equal protection, you mean like a flat tax where everyone is treated the same? We buried equal protection decades ago the moment we specified different criteria for how to tax people, or otherwise treat them in a million other cases.

 

[xBiffx]

Equal protection, you mean like a flat tax where everyone is treated the same? We buried equal protection decades ago the moment we specified different criteria for how to tax people, or otherwise treat them in a million other cases.

But everyone under the same rules is treated the same, even with taxes. Everyone who falls within a certain bracket or withing certain guidelines/rules/deductions/what have you is treated the same.

In this case, if you qualify for a certain subsidy, you may not necessarily get it whereas someone else of equal qualifications would. That doesn't seem correct or lawful.

 

[echo4747]

But everyone under the same rules is treated the same, even with taxes. Everyone who falls within a certain bracket or withing certain guidelines/rules/deductions/what have you is treated the same.

In this case, if you qualify for a certain subsidy, you may not necessarily get it whereas someone else of equal qualifications would. That doesn't seem correct or lawful.

why not write an ammendment to the ACA to include subs for the federal exchange.. vote on it..Isn't that the way its supposed to done?

 

[nehalem256]

In this case, if you qualify for a certain subsidy, you may not necessarily get it whereas someone else of equal qualifications would. That doesn't seem correct or lawful.

So your argument is that the ACA as written is unconstitutional

 

[sactoking]

Thanks, Fern. I still have a question though. What legal standing do the plaintiffs have? They aren't the ones paying the subsidies, so is it the penalties business owners have to pay for employees that require subsidies? They are trying to avoid having to pay them by saying the employees don't qualify for the subsidies due to a technicality created by the SCOTUS ruling?

The plaintiffs are employers in states that did not set up their own exchanges.

Under the ACA's employer mandate ("shared responsibility"), employers must provide affordable essential minimum coverage to employees. If the employer offers coverage to the employee but it is not affordable, the employee is eligible to receive a tax credit to purchase coverage through an exchange. If the employee receives such a tax credit then the employer is liable to the government for the cost of the tax credit.

The theory then is that the employers have standing because if they offer unaffordable coverage and the employee is not eligible for a tax credit, say because the state did not establish an exchange, then the employer is not liable to defray the cost. The employers are economically harmed by the government' allegedly faulty interpretation/implementation of the law.

 

[xBiffx]

why not write an ammendment to the ACA to include subs for the federal exchange.. vote on it..Isn't that the way its supposed to done?

I would think so yes. But that is not how the white house has been operating so no standard rules seem to apply to changing laws passed by Congress anymore.

 

[xBiffx]

The plaintiffs are employers in states that did not set up their own exchanges.

Under the ACA's employer mandate ("shared responsibility"), employers must provide affordable essential minimum coverage to employees. If the employer offers coverage to the employee but it is not affordable, the employee is eligible to receive a tax credit to purchase coverage through an exchange. If the employee receives such a tax credit then the employer is liable to the government for the cost of the tax credit.

The theory then is that the employers have standing because if they offer unaffordable coverage and the employee is not eligible for a tax credit, say because the state did not establish an exchange, then the employer is not liable to defray the cost. The employers are economically harmed by the government' allegedly faulty interpretation/implementation of the law.

Thanks for that explanation. Very helpful. :thumbsup:

 

[theeedude]

The plaintiffs are employers in states that did not set up their own exchanges.

Under the ACA's employer mandate ("shared responsibility"), employers must provide affordable essential minimum coverage to employees. If the employer offers coverage to the employee but it is not affordable, the employee is eligible to receive a tax credit to purchase coverage through an exchange. If the employee receives such a tax credit then the employer is liable to the government for the cost of the tax credit.

The theory then is that the employers have standing because if they offer unaffordable coverage and the employee is not eligible for a tax credit, say because the state did not establish an exchange, then the employer is not liable to defray the cost. The employers are economically harmed by the government' allegedly faulty interpretation/implementation of the law.

But they are the ones suing to make sure their employees aren't eligible for tax credits because their states didn't establish the exchange. Just so they can then say, see, our employees aren't eligible for subsidies, we don't have to provide health care for them? That is their standing?

 

[xBiffx]

But they are the ones suing to make sure their employees aren't eligible for tax credits because their states didn't establish the exchange. Just so they can then say, see, our employees aren't eligible for subsidies, we don't have to provide health care for them? That is their standing?

I don't think that the bolded is being said at all. Its not a debate about whether or not coverage is going to be provided by the employer, its a debate about who is paying what for said coverage.

 

[theeedude]

I don't think that the bolded is being said at all. Its not a debate about whether or not coverage is going to be provided by the employer, its a debate about who is paying what for said coverage.

Well, if the coverage is provided by employer, then employees don't have to go to the exchange and get a subsidy in the first place.
So basically, corporations that we are now told have morals and religions, are suing to deny tax subsidies to help with insurance for employees they themselves refuse to provide health insurance for, and for tens of millions of other Americans who have nothing to do with their companies.

 

[emperus]

That is true. The courts do have the constitutional authority to resolve conflicts of interpretation. The issue it seems is about what the ACA says vs. what some would like it to say. I'm not qualified to make that call, however I understand someone needs to and thankfully it's none of us "experts" here.

There is no conflict of interpretation in this case. The issue is wholly made up. Courts generally do use legislative intent in interpreting laws when there is an obvious drafting error. And no one can argue that this wasn't the intent of those who drafted the law.

Again, republicans who scoff at judicial activism, when they can't win seats to get laws passed turn to judicial activism.

 

[Jaskalas]

But everyone under the same rules is treated the same, even with taxes. Everyone who falls within a certain bracket or withing certain guidelines/rules/deductions/what have you is treated the same.

In this case, if you qualify for a certain subsidy, you may not necessarily get it whereas someone else of equal qualifications would. That doesn't seem correct or lawful.

And the bracket here is if your State setup an exchange.

I hope we get to hear from the SCOTUS on this one. It certainly has its arguments.

 

[dank69]

Well, if the coverage is provided by employer, then employees don't have to go to the exchange and get a subsidy in the first place.
So basically, corporations that we are now told have morals and religions, are suing to deny tax subsidies to help with insurance for employees they themselves refuse to provide health insurance for, and for tens of millions of other Americans who have nothing to do with their companies.

Yeah, it is despicable behavior, just as it would be for the inevitable GOP obstructionism that would keep the bill from being amended through normal channels.

 

[sactoking]

But they are the ones suing to make sure their employees aren't eligible for tax credits because their states didn't establish the exchange. Just so they can then say, see, our employees aren't eligible for subsidies, we don't have to provide health care for them? That is their standing?

Employers have to* provide coverage regardless. The issue is the monetary penalty. The payment of the monetary penalty, be it the flat amount or the reimbursement of the tax credit, is tied to whether or not an employee qualifies for a tax credit. No tax credit, no monetary penalty. If the exchange is illegally providing tax credits to ineligible individuals, as is alleged in the lawsuits, then the employers are being illegally exposed to a monetary penalty that they are not supposed to be subject to.

*: Per the usual qualifications

 

[xBiffx]

And the bracket here is if your State setup an exchange.

I hope we get to hear from the SCOTUS on this one. It certainly has its arguments.

But its a Federal law, so the bracket must be all people who qualify under the federal law across all states. Not just people who qualify in a certain state(s). That's the heart of the issue, of course.

 

[xBiffx]

Well, if the coverage is provided by employer, then employees don't have to go to the exchange and get a subsidy in the first place.

Not necessarily true. If the coverage is unaffordable from the employer, then the employee would have to visit the exchange and a subsidy could apply.

 

[Bird222]

Not a problem here in CA since we got our own exchange. Teabaggers, enjoy paying for us while getting no subsidies yourself, courtesy of your state governement, though

Same here in WA. Thanks for the subsidies, from the states cutting off their noses to spite their face.

Well since it is the red states that are usually the 'takers' it's about time they give back.