Tag: aca

17 Errors & Omissions in Vox’s Otherwise Excellent History of King v. Burwell

This week, the Supreme Court will hear oral arguments in King v. Burwell, one of four legal challenges to an IRS regulation that purports to implement the Patient Protection and Affordable Care Act, but in fact vastly expands the IRS’s powers beyond the limits imposed by the Act. Just in time for oral arguments before the Court, Vox’s Sarah Kliff has produced what I think may be the best history of King v. Burwell and related cases I’ve seen. Still, there are a few important errors and omissions, listed here in rough order of importance.

King v. Burwell: In 2013, Nelson Admitted He Didn’t Know if the ACA Offered Subsidies in Federal Exchanges

The plaintiffs in King v. Burwell claim the Patient Protection and Affordable Care Act only offers premium subsidies, as the statute says, “through an Exchange established by the State.” Members of Congress who voted for the PPACA – most recently Sen. Bob Casey (D-PA) and former Sen. Ben Nelson (D-NE) – now swear it was never their intent to condition Exchange subsidies on state cooperation.

Ironically, Casey’s and Nelson’s decision to wade into the King debate demonstrates why, when a statute is clear, courts traditionally assign no weight to what members of Congress claim they intended a law to say – especially if, as here, those claims come after a clear provision has proven problematic. While he claims he never intended to condition subsidies on states establishing Exchanges, Casey repeatedly voted to condition Exchange subsidies on state cooperation, has misrepresented what Congress intended the PPACA to do, and continues to misrepresent the PPACA on his Senate web site. Nelson’s claims about what Congress intended should likewise be taken with a grain of salt. In an unguarded moment in 2013, Nelson admitted that in 2009 he paid no attention to “details” such as whether the PPACA authorized subsidies in federal Exchanges.

All Sides Agree: Casey Supported Conditional Exchange Subsidies

Casey and Nelson exchanged correspondence exactly one day before amicus briefs supporting the government were due to be filed with the Supreme Court. Casey asked for Nelson’s recollection of whether, in 2009, Nelson or anyone else suggested the PPACA’s subsidies would only be available in states that established Exchanges. Perhaps more than anyone, Nelson was a pivotal figure in the debate over the PPACA. Not only did he insist on state-based Exchanges rather than a national Exchange run by the federal government, his was the deciding vote that enabled the bill to pass the Senate and become law – and he withheld his vote until his demands were met.

Sec. Burwell: Right Now, My Focus is on Taking Hostages. I’ll Inform Them of Their Hostage Status When I’m Ready

Health and Human Services Secretary Sylvia Burwell is the lead defendant in King v. Burwell, in which the plaintiffs claim the Obama administration is taxing millions of employers and individuals and subsidizing millions of HealthCare.gov enrollees contrary to the plain language of the Patient Protection and Affordable Care Act (a.k.a., ObamaCare). The Supreme Court will hear oral arguments in the case on March 4, and will likely rule by late June. If the Court rules against Burwell, 57 million individuals and employers will be freed from those illegal taxes and maybe four million HealthCare.gov enrollees will lose subsidies that the administration never had the authority to issue in the first place. Those four million people could see their insurance bills quadruple, face an unexpected tax liability of up to $5,000, and lose their health insurance. You might think they have a right to know about that risk. You might think a responsible public servant like Secretary Burwell would inform them of that risk. 

You would be wrong.

Today, Burwell appeared before the Senate Finance Committee. Though HHS has already deployed its contingency plan for HealthCare.gov-participating insurers, she refused to answer whether HHS has a contingency plan for HealthCare.gov enrollees:

Right now, my focus is on completing and implementing the law, which we believe is the law. Right now, what we’re focused on is the open enrollment.

HHS Head Ducks Questions On ACA Tax Credit Backup Plan,” wrote Law360. Modern Healthcare wrote, “HHS Stonewalls on King v. Burwell,” while The Hill seemed to laud Burwell because she “did not back down” from her firm stand against transparency and consumer information. Sen. John Cornyn (R-TX) fumed, “to come here and repeatedly refuse to answer the questions strikes me as nothing less than contempt of our oversight responsibility.”

Mr. President, Tell HealthCare.gov Enrollees about King v. Burwell and the Risks to Their Coverage

Tonight, President Obama will deliver his annual State of the Union address to Congress. He will no doubt boast that his administration has enrolled 6.8 million individuals in ObamaCare plans in the 37 states with federal Exchanges – i.e., through HealthCare.gov – and a couple million more in the few states that established their own Exchanges. The State of the Union would also be a good time for the president to be honest with those HealthCare.gov enrollees, especially the roughly 6 million of them who are purchasing coverage with the help of federal subsidies, about the risks to which he has exposed them.

The Patient Protection and Affordable Care Act, which the president himself signed, expressly provides that those subsidies are authorized only “through an Exchange established by the State.” Since majority of American people have never supported ObamaCare, about three quarters of the states now have refused or otherwise failed to establish Exchanges.

If the president were following the law, he would not be issuing subsidies to any HealthCare.gov enrollees. Indeed, if the president had followed the law – if he had all along admitted he has no authority to subsidize HealthCare.gov enrollees – then enough of the country would have seen the full cost of ObamaCare coverage that Congress would have reopened and likely repealed the statute by now. It would have happened even before anyone lost their coverage in the “if you like your health plan you can keep it” debacle of late 2013.

Instead, President Obama insisted on violating the express language of his own health care law. The result is that he put millions of Americans in jeopardy of losing their health insurance – again.

On March 4, the Supreme Court will hear a case called King v. Burwell, one of four challenges to those illegal subsidies, and the illegal taxes that those subsidies trigger. The Court will likely issue a ruling by June. The fact that the Supreme Court agreed to consider King at all means that at least four justices believe the Fourth Circuit’s ruling for the government in King merits review.

If the justices agree with two other lowercourts, they will hold that the president is breaking the law and will put an immediate end to those illegal subsidies. Such a ruling would free the plaintiffs and more than 57 million individuals and employers from being illegally subjected to the aforementioned taxes – ObamaCare’s individual and employer mandates.

The people with whom the president most needs to be honest are the millions of Americans who enrolled in HealthCare.gov. If the Court finds those subsidies are illegal, then enrollees receiving subsidies would see their health insurance bills quadruple (on average). They would be hit with a new tax bill of up to $5,000. Their plans could disappear, and they may not be able to find a replacement. An estimated one million of these folks left jobs with secure coverage because the president promised them secure, affordable coverage through HealthCare.gov. Only he never had that power, and by pretending he did, Obama has now made coverage less secure for millions.

Instead of warning Americans of these risks of HealthCare.gov coverage, the president and his administration have been lying to HealthCare.gov enrollees. As they lost before lower courts and even as the Supreme Court agreed to hear King just days before open enrollment in HealthCare.gov began, the White House and administration officials have repeated the mantra that “nothing has changed.” Watch HHS Secretary Sylvia Burwell say “nothing has changed” four times in 90 seconds (go to 3:40).

It is not true that nothing has changed, and the administration knows it isn’t true. The administration knows the risks inherent in HealthCare.gov coverage have increased, because the administration changed the agreements between HealthCare.gov and participating insurers to insert a clause allowing insurers to back out if the subsidies disappear:

CMS acknowledges that QHPI has developed its products for the FFE based on the assumption that APTCs and CSRs will be available to qualifying Enrollees. In the event that this assumption ceases to be valid during the term of this Agreement, CMS acknowledges that Issuer could have cause to terminate this Agreement subject to applicable state and federal law.

The administration made the change, reports Inside Health Policy, because insurers demanded it and because administration officials themselves “believe the clause is critical.” 

What does this mean? It means the president knows that millions of HealthCare.gov enrollees are facing serious financial risks, or worse. Yet his administration is actively concealing those risks from enrollees by telling enrollees “nothing has changed.” At the same time the president is protecting insurers from the risks they face by participating in HealthCare.gov, he is not even informing consumers about the risks HealthCare.gov coverage poses for them.

The president needs to put an end to the deception, tonight. He needs to warn HealthCare.gov enrollees about the risks inherent in their coverage, so they have time to prepare. If he tells them tonight, some of those who need insurance the most might be able to find jobs with secure coverage (or other access to coverage) by the time the Court rules. He needs to tell HealthCare.gov enrollees what his contingency plans are if the Supreme Court rules that he was breaking the law and playing games with their coverage.

He can blame it all on his political opponents. He can claim to be the only honest man in Washington, for all I care. But he needs to level with HealthCare.gov enrollees tonight about the risks they are facing. To keep pretending “nothing has changed” would be a reckless lie.

Harvard Study of CBO Reports Says Nothing New or Interesting about King v. Burwell

Vox’s Sarah Kliff reports that Harvard University’s Theda Skocpol has produced a study purporting to show Congress intended for the Patient Protection and Affordable Care Act (PPACA) to authorize health-insurance subsidies through exchanges established by the federal government—even though the statute expressly and repeatedly says those subsidies are available only “through an Exchange established by the State.” Whether the PPACA authorizes those subsidies in the 36 states with federal exchanges is the question presented in King v. Burwell. The Supreme Court will hear oral arguments in King on March 4, with a ruling expected by June. Unfortunately for the administration and its supporters, Skocpol offers nothing either new or that supports the notion that Congress intended something other than what it expressly said in the statute.

What evidence does Skocpol claim to have found in support of her counter-textual interpretation of congressional intent? She combs through 68 analyses issued by the Congressional Budget Office during 2009 and 2010. She finds that in none of those reports did the CBO entertain the idea that the PPACA’s exchange subsidies might be available in some states but not others. She interprets this as both “excellent evidence” and “the best objective evidence we have that no one in Congress considered premium subsidies restricted to certain states to be either possible or desirable.”

Yeah, about that.

An alert Vox reader already informed Kliff that the claim that CBO never considered the possibility of exchange subsidies in some states but not others isn’t exactly true. The comprehensive health care bill approved by Democrats on the Senate’s Health, Education, Labor, and Pensions (HELP) Committee in 2009 (S. 1679) would have given states four years to establish exchanges themselves, after which point the federal government would establish an exchange. As my partner-in-crime-fighting Jonathan Adler and I write in an amicus brief filed with the Supreme Court in King:

S. 1679 asked each state to adopt certain health insurance regulations, and either establish an Exchange itself or ask the federal government to establish one “in” the state… S. 1679 withheld Exchange subsidies, as well as many of its insurance regulations, for up to four years until the state complied.

The CBO scored S. 1679 assuming that some states would establish exchanges early and some would not. Thus the agency’s cost projections assumed that exchange subsidies would be available in some states but not in others. So we’ve already got a problem with Skocpol’s analysis.

Obamacare’s Exchange Subsidies Are So Essential, People Are Turning Them Down

According to U.S. News & World Report

[B]rokers say they do hear from clients who are eligible for subsidies – which are based on household income and not assets – but want no part of them. Health officials have been boasting that 6.6 million people have enrolled in health coverage through state or federal marketplaces created under the Affordable Care Act, but in sharp contrast stands a small group of Americans who say they want nothing to do with the plans, even if they would save money. Their reasons vary: Some are protesting Obamacare, while others simply feel it’s unethical to accept taxpayer dollars to pay for health insurance…

For [Kansas City resident Grace] Brewer, buying a plan on her own would mean she would not have enough to pay for housing, she says, so she chose not to be insured this year and will have to pay a penalty in her 2016 tax filing that is likely to be 2 percent of her income. She has no dependents, is healthy, does not use prescriptions and says she has been careful about her health choices, not overusing medical care.

“I am frustrated. I am angry. And I say ‘no’ to the exchanges,” she says.

Some people are turning down the subsidies because they don’t need them:

Complicating the ethical question is that some people who qualify for subsidies based on their income could afford to pay their own way. “There is no question that we are enrolling people through these programs who would otherwise be considered middle-class or even affluent,” says Ed Haislmaier, a senior research fellow for health policy studies at the right-leaning Heritage Foundation think tank. “We are seeing people with enrollment in these programs that have significant assets, but for whatever reason – usually a temporary reason – fall below the income line.” 

Those reasons could range from early retirement to a midcareer job change. But whatever the case, some of those who are turning down subsidies are aware others are gaming the system, and they think it’s wrong.

“I won’t be a part of it,” Brewer says. “I don’t think it’s right. I don’t think it’s ethical, but the system has gotten so complicated that people can take advantage of those things.”…

The fact that the subsidies are causing controversy among the very people they’re intended to help is “evidence that the government doesn’t do charity very well,” says Michael Cannon, director of health policy studies at the libertarian Cato Institute think tank. 

“Prior to Obamacare, the federal government was subsidizing all sorts of people who did not need health insurance subsidies,” he adds, referring to services like the Children’s Health Insurance Program, Medicaid and Medicare, the government’s health program for seniors. “With Obamacare, we are subsidizing even more people who don’t need assistance.”

Something to keep in mind when contemplating the impact of King v. Burwell.

Nine TEN! Questions on the House Vote to Tweak ObamaCare’s Employer Mandate

Tomorrow, the Republican-controlled House of Representatives will vote on a measure that would alter the definition of full-time work, for purposes of the Patient Protection and Affordable Care Act’s employer mandate, from 30 hours per week to 40 hours per week. The measure is likely to pass. The House approved a similar measure last Congress, but it never went anywhere in the Senate, which was then under Democratic control. Now that Republicans have a majority in the Senate, there’s a chance the measure could clear both chambers of Congress. The president threatens a veto. Yuval Levin writes this change “seems likely to be worse than doing nothing.”

I have a few questions about this supposed threat to ObamaCare:

  1. This legislation would reduce the burden of ObamaCare’s employer mandatem but it would also increase government spending by making more workers eligible for health-insurance subsidies through ObamaCare’s Exchanges. How is that a policy victory?
  2. The legislation would therefore shift part of ObamaCare’s cost from an organized and influential interest group (employers) to a disorganized and less-influential interest group (taxpayers). How is that strategically smart?
  3. The legislation would make ObamaCare more tolerable for an organized and influential interest group (again, employers), thereby reducing their incentive to lobby for full repeal. How is that strategically smart?
  4. House Republicans say they are committed to repealing ObamaCare entirely. If so, why is this bill, rather than a full-repeal bill, the first item on their agenda? 
  5. House Republicans say this bill will show they can govern. But they also acknowledge the president will veto it. How is that governing?
  6. This legislation would merely lessen the burden of the employer mandate, and only for some employers. By June, however, the Supreme Court could completely invalidate employer-mandate penalties for all employers across 36 states. (See King v. Burwell.) How is this legislation a wise use of Congress’ time, when a Supreme Court ruling could go much farther in just a few months?
  7. A King ruling could also invalidate Exchange subsidies in 36 states, thereby exposing millions of Americans to the full cost of ObamaCare’s hidden taxes. That would give Congress more leverage than ever before to reopen and repeal the law. With this legislation, House Republicans are playing small ball with no leverage. How is that strategically smart?
  8. If enacted, this legislation would actually reduce the leverage a King ruling would give Congress to reopen and repeal ObamaCare. How is that strategically smart?
  9. The president has said he would veto this legislation. Given the above, should Republicans believe him?

Note that many of these questions also apply to repeal of the employer mandate before a King ruling, and sometimes after.

Update: I forgot a question. (Ten questions!)

10. This legislation would repeal a perverse incentive for employers to cut workers’ hours from just above to below 30 hours per week. It would replace that perverse incentive with a perverse incentive to cut the hours of other workers from just above to below 40 hours per week. Those other workers would complain that Republicans just made ObamaCare worse for them. How is that a political win, or strategically smart?

(Cross-posted at Darwin’s Fool.)