Tag: ppaca

ObamaCare Exchanges Recklessly, Often Unlawfully, Throwing Taxpayer Money At Health Insurance Companies

Robert Laszewski, health policy wonk, blogger, and president of Health Policy and Strategy Associates, tells Inside Health Insurance Exchanges:

The Obama administration has no idea how many people are currently enrolled [in exchanges] but they keep cutting checks for hundreds of millions of dollars a month for insurance subsidies for people who may or may not have paid their premium, continued their insurance, or are even legal residents.

And if you think they’re doing those “enrollees” a favor, remember that if it turns out a recipient wasn’t eligible for the subsidy, he or she has to pay the money back.

Surprised? Don’t be. This is part of a deliberate, consistent strategy by the Obama administration to throw money at individual voters and key health care industry groups—lawfully or not—to buy support for this consistently unpopular law.

The D.C. Circuit Grants En Banc Review of Halbig

My reaction to the D.C. Circuit’s decision to grant en banc review of Halbig v. Burwell in a nutshell:

  1. It is unnecessary.
  2. It is unwise.
  3. It is unfortunate.
  4. It appears political, as would a decision to overrule Halbig.
  5. It will likely only delay Supreme Court review.
  6. En banc review does not necessarily mean the court will overturn Halbig, though it doesn’t look good.
  7. I predict that even if the court overturns Halbig, the Obama administration will lose ground.
  8. The D.C. Circuit will not have the last word.

If you want to go outside the nutshell, where I unpack all this with more words and facts and links, go here

Would Linda Greenhouse Apply the Same Interpretive Method She Uses in Halbig to Habeas Corpus Cases? (Updated)

Yale law professor Linda Greenhouse is a former New York Times Supreme Court correspondent and now writes a legal column for the Times. Today, she writes about Halbig v. Burwell. For my latest on Halbig and similar cases, see here. Now Greenhouse, who argues these cases are just about gutting the Patient Protection and Affordable Care Act:

To be clear, I’m not suggesting that there is anything wrong with turning to the courts to achieve what politics won’t deliver; we all know that litigation is politics by other means. (Think school desegregation. Think reproductive rights. Think, perhaps, same-sex marriage.) Nor is the creativity and determination of the Affordable Care Act’s opponents any great revelation — not after they came within a hairsbreadth of getting the law’s individual mandate thrown out on a constitutional theory that would have been laughed out of court not too many years ago.

Boy, are they ever determined.

I accept the compliment, with one proviso. The stakes in the Halbig cases are much bigger than the PPACA. The IRS is subjecting those plaintiffs to taxes from which, as Greenhouse implicitly admits, the operative language of the statute would exempt them. The plaintiffs have a right not to be taxed unless Congress expressly grants the IRS that power. A federal judge whom Greenhouse respects (Thomas Griffith) surveyed the IRS’s rationales for subjecting tens of millions of Americans to those taxes, found those rationales to be meritless, and essentially ruled that the IRS is violating the law on a massive scale. If preventing the executive branch from exceeding its lawful powers is just “politics by other means,” then so are the habeas corpus cases Greenhouse approvingly cites.

Unfortunately, when Greenhouse takes the government’s side in Halbig, it seems to be on the basis that, “Of course there are ambiguities and inconsistencies in a 900-page bill that never went to a conference committee for a final stitching together of its many provisions.” That probably is true, but it does not follow that the statute is ambiguous or inconsistent with regard to the question presented in Halbig. The government certainly has asserted such ambiguities and inconsistencies exist. Yet a closer look at the government’s arguments shows that the specific provisions it cites are all quite consistent with the language authorizing subsidies only to those who buy coverage “through an Exchange established by the State.”

Greenhouse also commits an error as well as her own inconsistency. She claims the phrase “through an Exchange established by the State” appears only once in the subsidy-eligibility rules. In fact, it appears explicity twice: one mention appeared in the first draft of those rules; Senate Democrats added the second just before final Senate passage (which all by itself suggests they knew exactly what they were doing). Moreover, that phrase appears seven more times by cross-reference. And the subsidy-eligibility rules do not use any other language – at all – to describe the Exchanges through which the law authorizes subsidies. All of which evince a clear meaning and purpose: to offer subsidies only in states that comply with Congress’ desire that they should establish Exchanges.

Greenhouse’s inconsistency occurs when she (incorrectly) claims, “the two [Halbig] judges trained a laser focus on a single section, indeed on a single word, in the massive statute…ignor[ing] the broader context, in which Congress clearly intended to make insurance affordable[.]” The habeas corpus cases with which Greenhouse apparently agrees also focused on a single phrase – one could argue, a single word – in the Constitution. Would she criticize those cases for failing to uphold the overarching purpose of the Constitution – which appears right there in the preamble – to “insure domestic Tranquillity” and “provide for the common defense”?

I wrote Greenhouse to thank her for her column, which was far more respectful and gracious than many Halbig critics have been. I thought it might be fruitful to offer to debate these cases with her. She respectfully declined, but noted there is a movement afoot to bring my coauthor Jonathan Adler to New Haven for that purpose. Watch this space for development.

Update: I neglected to mention, because I failed to notice, another error in Greenhouse’s oped. She refers to the “failed Commerce Clause” attack on the PPACA brought under NFIB v. Sebelius. As constitutional-law aficionados and health-policy wonks know, the plaintiffs’ claim that the individual mandate exceeded Congress’ powers under the Commerce Clause succeeded (even if the overall attack on the individual mandate failed on account of Chief Justice John Roberts redefining the mandate penalty as a tax).

What If We Applied the IRS’s Reasoning in Halbig & King to the Patriot Act or RFRA, Instead of the ACA?

Over at Darwin’s Fool, I posted a critique of the Fourth Circuit’s opinion in King v. Burwell. Unlike the D.C. Circuit’s ruling in Halbig v. Burwell, the Fourth Circuit held that the IRS has the authority to issue subsidies in states with federal exchanges, despite the fact that the Patient Protection and Affordable Care Act repeatedly says subsidy recipients must enroll in coverage “through an Exchange established by the State.” I reproduce here my response to a commenter to that post, as his argument parallels those of many others who have been critical of these cases.

My commenter objected that a plain-text reading “must include the entire text of the bill,” which “makes clear that the goal of the bill was to provide health care to all Americans who needed it and could not, at that time get it.” Moreover, “It would be illogical for Congress to establish a national health care system that is based on subsidies and then not include those subsidies in all aspects,” thus “it is entirely reasonable to interpret that one sentence to mean that Congress intended the subsidies for all participants.” My reply:

Sir, I’m afraid you have things exactly backward.

The overall context of the PPACA presents no difficulty for the plaintiffs in King v. Burwell, Halbig v. Burwell, or the other cases challenging subsidies in federal exchanges. The text of the eligibility rules for those subsidies clearly and repeatedly limit eligibility to those who enroll in coverage “through an Exchange established by the State.” There is nothing in the broader context of the statute to suggest that Congress understood the words “established by the State” to have any meaning other than their usual meaning. There isn’t even any statutory language that conflicts with that plain meaning. Jonathan Adler and I addressed (almost) all of these supposed anomalies here.

On the contrary, it is the Obama administration and its supporters for whom both the text and context present difficulties. (We can no longer call them supporters of the PPACA, given how adamantly opposed they are to implementing the law as Congress intended.) The subsidy-eligibility rules are the only place where Congress spoke directly to the question at issue. Those rules flatly contradict the administration’s position. Congress did not throw the phrase “established by the State” around loosely. They referred to exchanges “established by the State” when they meant exchanges established by the states. They referred generically to “an Exchange” when they meant either a state-established or a federal exchange. And they referred to state-established and federally established exchanges separately within a single provision, which shows they saw a difference between the two. Congress also did the exact same thing – withholding subsidies from residents of uncooperative states – in the PPACA’s other massive new entitlement program, the Medicaid expansion.<--break->

Halbig v. Burwell Winners Outnumber Losers by More than Ten to One

Today at DarwinsFool.com, I released estimates of the impact of a potential ruling for the plaintiffs in Halbig v. Burwell, one of four cases currently before federal courts claiming that the subsidies and taxes the IRS is implementing in the 36 states with health-insurance Exchanges established by the federal government are illegal. The Patient Protection and Affordable Care Act repeatedly says those taxes and subsidies are authorized only “through an Exchange established by the State.”

Left-leaning groups and media outlets that defend the IRS are attempting to portray a potential ruling for the Halbig plaintiffs as catastrophic, because it would put an end to the subsidies roughly 5 million individuals enrolled in federal Exchanges are currently receiving. As I explain in detail, those commenters ignore three crucial facts. One, a victory for the Halbig plaintiffs would increase no one’s premiums. It would merely stop the IRS from unlawfully shifting the cost of those overly expensive PPACA premiums from enrollees to taxpayers. Two, if federal-Exchange enrollees lose subsidies, it is because the courts will have found those subsidies are, and always were, illegal. And three, if the Halbig plaintiffs prevail, the winners in the 36 states with federal Exchanges would outnumber the losers by more than ten to one.

As I explain at Darwin’s Fool, here is what the IRS’s defenders don’t want you to know about the impact of a potential Halbig victory.

  • A Halbig victory would free more than 8.3 million individuals from the PPACA’s individual mandate. That’s how many people in those 36 states the IRS is currently subjecting to the individual-mandate tax without statutory authorization.
  • In the 36 states with federal Exchanges, a Halbig victory would free 250,000 firms and 57 million employees from the PPACA’s employer mandate. That’s how many people the IRS is unlawfully subjecting to the employer mandate.
  • The number of winners under a Halbig victory is therefore more than ten times larger than the 5 million people who would lose an illegal subsidy.
  • Those 5 million people are “losers” not because they were deprived of an illegal subsidy. Regardless of one’s position on the PPACA, we can all agree that courts should put an end to illegal government spending whenever they can. Those people are “losers” because the Obama administration recklessly induced them to purchase overly expensive Exchange coverage with the promise of billions of dollars in subsidies that it has has no authority to offer, and that could disappear with a single court ruling.

I also provide state-level estimates of the number of firms and individuals Halbig would free from these mandates. For example:

  • A Halbig victory would free nearly 1 million Floridians from the individual mandate, and more than 16,000 firms and 5.1 million Floridians from the employer mandate.
  • It would free more than 1.5 million Texans from the individual mandate, and free more than 24,000 firms and nearly 7 million Texans from the employer mandate.
  • A Halbig victory would also enable the 14 states (plus D.C.) that established Exchanges to exempt residents and employers from those mandates by switching to a federal Exchange, as well as create political and economic incentives for states to make the switch.
  • If the Halbig plaintiffs prevail, the 14 establishing states (plus D.C.) could cumulatively exempt 3.8 million residents from the individual mandate and exempt 123,000 firms and nearly 29 million residents from the employer mandate.
  • California, for example, could exempt 1.7 million residents from the individual mandate, and exempt 32,000 firms and 9.4 million workers from the employer mandate.
  • Though those states would lose Exchange subsidies if they switched to a federal Exchange, the much larger number of firms and residents who would benefit could still pressure state officials to make the switch.
  • These states could also experience economic pressure to switch to a federal Exchange, because the employer mandate (which increases the cost of doing business) will be operative in their states but not in states that opt for a federal Exchange. Establishing states could therefore lose jobs to federal-Exchange states, unless they become federal-Exchange states themselves.

Click here for state-by-state data on the impact (or potential impact) of a Halbig ruling.

Tax Notes Praises Law-Review Article that Got Halbig Cases Rolling

A panel of the U.S. Court of Appeals for the D.C. Circuit, which is often referred to as the second-highest court in the land, is expected to rule any day now on Halbig v. Burwell, a legal challenge that “may actually crush,” “kill,” and “wreck” the Patient Protection and Affordable Care Act, a.k.a. Obamacare.

The tax-law journal Tax Notes has chosen the law-journal article that got Halbig and similar cases rolling – Jonathan H. Adler and Michael F. Cannon, Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA, Health Matrix: Journal of Law-Medicine 23, No. 1 (2013): 119-195 – as one of “the 10 law most noteworthy law review articles on employee benefits and executive compensation issues published in 2013 that a broad audience of employee benefits professionals would find relevant and worthy of attention.” Tax Notes calls the Adler-Cannon article “innovative and thought provoking” and one that “practitioners should have read” in 2013.

To read the Adler-Cannon Health Matrix article, click here. For more on the Halbig cases, click here.

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