Appeals Court: IRS Rule for Subsidies for Federal Exchanges Impermissible under ACA

[NotreDame]

The decision is from the D.C. Circuit Court of Appeals and was 2-1. This decision doesn't surprise me as sometime ago over at the website, volokh conspiracy, some attorneys had the prescience to predict this outcome. Upon discovering the lawsuit, I decided to read the statute and, to my surprise, the statute does explicitly permit and authorize subsidies (tax credits) for exchanges "established by the State" but the he statute does not authorize subsidies for federal established exchanges.

Section 36B of the Internal Revenue Code, enacted as part of the Patient Protection and Affordable Care Act (ACA or the Act), makes tax credits available as a form of subsidy to individuals who purchase health insurance through marketplaces—known as “American Health Benefit Exchanges,” or “Exchanges” for short—that are “established by the State under section 1311” of the Act. 26 U.S.C. § 36B(c)(2)(A)(i). On its face, this provision authorizes tax credits for insurance purchased on an Exchange established by one of the fifty states or the District of Columbia. See 42 U.S.C. § 18024(d). But the Internal Revenue Service has interpreted section 36B broadly to authorize the subsidy also for insurance purchased on an Exchange established by the federal government under section 1321 of the Act. See 26 C.F.R. § 1.36B-2(a)(1) (hereinafter “IRS Rule”)...

After resolving several threshold issues related to its jurisdiction, the district court held that the ACA’s text, structure, purpose, and legislative history make “clear that Congress intended to make premium tax credits available on both state-run and federally-facilitated Exchanges.” Id. at *18. Furthermore, the court held that even if the ACA were ambiguous, the IRS’s regulation would represent a permissible construction entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)...

Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges “established by the State,” we reverse the district court and vacate the IRS’s regulation.
http://www.cadc.uscourts.gov/interne...18-1503850.pdf
​

This could result in higher premiums since the federal government created, I believe, 36 exchanges for 36 states, since those 36 states chose not to establish its own exchange. Those individuals in these 36 states whose insurance costs were lowered, significantly for many people, because of the subsidies may see increased costs. The 3rd Circuit Court of Appeals decided this issue in favor of the IRS rule.
​

 

[Veritas]

I was just waiting for someone else to post this. If I do it, the thread become about me and how I hate Obama. So let's just get that out of the way.

I actually don't think this will necessarily cause an increase in cost to those receiving the subsidies. Obama was already working a backroom deal to get the insurance companies to delay an increase in premiums so that it would help dems out in the fall election. Premium notices usually go out in Oct/Nov and this of course would be disasterous. For his part, Obama promised he would use taxpayer funds to reimburse the insurance companies any loss of profits for not raising rates.

The White House Is Bribing Health Insurance Companies - Forbes

Further, I believe this ruling effectively means that no matter what, there will be no tax penalty for those without coverage for 2014 or longer since the subsidy was the fulcrum on which the "affordability" rested. Without the subsidy, it's not affordable and it all falls apart.

Whether this goes to SCOTUS is unclear since they can refuse to hear the case or allow the lower court ruling to stand. We'll have to wait and see. What's really happened here is expose the glaring incompetence of the Obama admin and just how little was actually known at time of passage what was contained in the bill. But as the lovely Nancy Pelosi told us, "we have to pass the bill to see what's in it". Yes indeed Nancy, we sure do.

I'm not worried at this point since I am now exempt from Obamacare with my Chrisitan Healthcare sharing plan. I feel sorry for non-Christians who don't have this option though.

 

[stamperben]

Why not let's wait for the appeal process to work out what seems to be nothing more than a typo in the law's language.

The two Republicans’ decision rests on a glorified typo in the Affordable Care Act itself. Obamacare gives states a choice. They can either run their own health insurance exchange where their residents may buy health insurance, and receive subsidies to help them pay for that insurance if they qualify, or they can allow the federal government to run that exchange for them. Yet the plaintiffs’ in this case uncovered a drafting error in the statute where it appears to limit the subsidies to individuals who obtain insurance through “an Exchange established by the State.” Randolph and Griffith’s opinion concludes that this drafting error is the only thing that matters. In their words, “a federal Exchange is not an ‘Exchange established by the State,’” and that’s it. The upshot of this opinion is that 6.5 million Americans will lose their ability to afford health insurance, according to one estimate.
​

Source here.

These two rightwing activist jurists are going to be overturned, in my humble opinion.

 

[NotreDame]

Why not let's wait for the appeal process to work out what seems to be nothing more than a typo in the law's language.

The two Republicans’ decision rests on a glorified typo in the Affordable Care Act itself. Obamacare gives states a choice. They can either run their own health insurance exchange where their residents may buy health insurance, and receive subsidies to help them pay for that insurance if they qualify, or they can allow the federal government to run that exchange for them. Yet the plaintiffs’ in this case uncovered a drafting error in the statute where it appears to limit the subsidies to individuals who obtain insurance through “an Exchange established by the State.” Randolph and Griffith’s opinion concludes that this drafting error is the only thing that matters. In their words, “a federal Exchange is not an ‘Exchange established by the State,’” and that’s it. The upshot of this opinion is that 6.5 million Americans will lose their ability to afford health insurance, according to one estimate.
​

Source here.

These two rightwing activist jurists are going to be overturned, in my humble opinion.

Since when was it "activist" to adhere to the plain, unequivocal, and unambiguous language of the statute? Adhering to the plain, unambiguous and unequivocal language of a statute isn't "activist," indeed it is the antithesis of activism.

This may have been a typo but this doesn't change what the plain text of the law presently and currently says and it is for the legislature to fix the law, not the judiciary. The language of the statute is the language of the statute.

 

[stamperben]

Since when was it "activist" to adhere to the plain, unequivocal, and unambiguous language of the statute? Adhering to the plain, unambiguous and unequivocal language of a statute isn't "activist," indeed it is the antithesis of activism.

This may have been a typo but this doesn't change what the plain text of the law presently and currently says and it is for the legislature to fix the law, not the judiciary. The language of the statute is the language of the statute.

Fine then, never let me hear of another rightwinger utter anything about "activist" leftwing judges.

BTW, did you at all read some of the thoughts espoused by those two?

It’s important to understand just who these two Republicans are. Judge Randolph is a staunchly conservative judge who spent much of the oral argument in this case acting as an advocate for the anti-Obamacare side. Randolph complained, just a few weeks before President Obama would announce that the Affordable Care Act had overshot its enrollment goal, that the launch of the Affordable Care Act was “an unmitigated disaster” and that its costs “have gone sky-high.” At one point, Randolph also cut off Judge Harry Edwards, the sole Democratic appointee on the panel, to cite an editorial published by the conservative Investor’s Business Daily to prove the argument that Obamacare should be defunded.
​

and...

Judge Griffith has a reputation as a more moderate judge, but it is not clear that this reputation is deserved. In 2012, Griffith’s colleague, Judge Janice Rogers Brown, published a concurring opinion suggesting that all labor, business or Wall Street regulation is constitutionally suspect. “America’s cowboy capitalism,” Brown claimed, “was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s.” Later in her opinion, Brown suggested that the Court went off the rails when it “decided economic liberty was not a fundamental constitutional right.” In the early Twentieth Century, conservative justices relied on ideas of “economic liberty” that were discarded in the 1930s in order to strike down laws protecting workers’ right to organize, laws ensuring a minimum wage and laws prohibiting employers from overworking their employees.
​

These are men with agendas. Period, end of story.

 

[DaisyDay]

There seems to be some dispute.

Appeals Courts Can't Agree on Whether Obamacare Subsidies Are Illegal - The Wire

Update 12:32 pm: The Fourth Circuit Court of Appeals ruled that Obamacare subsidies are legal. Specifically, it upheld the IRS' interpretation of the health care law — that subsidies can be disbursed in states using the federal exchange — "as a permissible exercise of the agency’s discretion," according to the decision.

Judge Uses Domino's Pizza to Explain Obamacare Exchanges - The Wire

In Judge Gregory's opinion, he argued exactly what the federal government has argued — that the federal exchange is an acceptable substitute for a state-run exchange, the same way a Domino's pizza is a decent substitute for a Pizza Hut pizza. It's "common sense," as Gregory explains:

"If I ask for pizza from Pizza Hut for lunch but clarify that I would be fine with a pizza from Domino’s, and I then specify that I want ham and pepperoni on my pizza from Pizza Hut, my friend who returns from Domino’s with a ham and pepperoni pizza has still complied with a literal construction of my lunch order."​

Looks like this might go to the Supreme Court.

 

[NotreDame]

Fine then, never let me hear of another rightwinger utter anything about "activist" leftwing judges.

BTW, did you at all read some of the thoughts espoused by those two?

It’s important to understand just who these two Republicans are. Judge Randolph is a staunchly conservative judge who spent much of the oral argument in this case acting as an advocate for the anti-Obamacare side. Randolph complained, just a few weeks before President Obama would announce that the Affordable Care Act had overshot its enrollment goal, that the launch of the Affordable Care Act was “an unmitigated disaster” and that its costs “have gone sky-high.” At one point, Randolph also cut off Judge Harry Edwards, the sole Democratic appointee on the panel, to cite an editorial published by the conservative Investor’s Business Daily to prove the argument that Obamacare should be defunded.
​

and...

Judge Griffith has a reputation as a more moderate judge, but it is not clear that this reputation is deserved. In 2012, Griffith’s colleague, Judge Janice Rogers Brown, published a concurring opinion suggesting that all labor, business or Wall Street regulation is constitutionally suspect. “America’s cowboy capitalism,” Brown claimed, “was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s.” Later in her opinion, Brown suggested that the Court went off the rails when it “decided economic liberty was not a fundamental constitutional right.” In the early Twentieth Century, conservative justices relied on ideas of “economic liberty” that were discarded in the 1930s in order to strike down laws protecting workers’ right to organize, laws ensuring a minimum wage and laws prohibiting employers from overworking their employees.
​

These are men with agendas. Period, end of story.

Rather than assail the logic of the opinion you choose instead to focus red herrings, and facts about those who wrote the opinion which has absolutely no relevance to the veracity of the opinion itself. Your post is nothing more than coming from a "man with an agenda. Period, end of story."

 

[NotreDame]

There seems to be some dispute.

Appeals Courts Can't Agree on Whether Obamacare Subsidies Are Illegal - The Wire

Judge Uses Domino's Pizza to Explain Obamacare Exchanges - The Wire


Looks like this might go to the Supreme Court.

I hope this issue is decided by the U.S. Supreme Court and, given the present composition of the Court, and a recent ruling involving statutory interpretation and an EPA rule, subsidies for exchanges established by the federal government may be in jeopardy.

 

[stamperben]

Rather than assail the logic of the opinion you choose instead to focus red herrings, and facts about those who wrote the opinion which has absolutely no relevance to the veracity of the opinion itself. Your post is nothing more than coming from a "man with an agenda. Period, end of story."

I hit upon the logic of the opinion in my first post here. It hinges on nothing more than a grammatical error. Period. You were the one who latched onto the activism portion of my post, and so I responded.

"Man with an agenda. Period, end of story." I may make that part of my signature. Thanks counselor.

 

[MachZer0]

Why not let's wait for the appeal process to work out what seems to be nothing more than a typo in the law's language.

The two Republicans’ decision rests on a glorified typo in the Affordable Care Act itself. Obamacare gives states a choice. They can either run their own health insurance exchange where their residents may buy health insurance, and receive subsidies to help them pay for that insurance if they qualify, or they can allow the federal government to run that exchange for them. Yet the plaintiffs’ in this case uncovered a drafting error in the statute where it appears to limit the subsidies to individuals who obtain insurance through “an Exchange established by the State.” Randolph and Griffith’s opinion concludes that this drafting error is the only thing that matters. In their words, “a federal Exchange is not an ‘Exchange established by the State,’” and that’s it. The upshot of this opinion is that 6.5 million Americans will lose their ability to afford health insurance, according to one estimate.
​

Source here.

These two rightwing activist jurists are going to be overturned, in my humble opinion.

A typo is when you misspell something or use the wrong word such as using too instead of two, not when you leave it out all together. The sloution to this for the Obamacare protagonists is for the Congress to amend the law, not for judges to interpret the law to say something that it doesn't say.

 

[MikeCarra]

I hope this issue is decided by the U.S. Supreme Court and, given the present composition of the Court, and a recent ruling involving statutory interpretation and an EPA rule, subsidies for exchanges established by the federal government may be in jeopardy.

And maybe soon, our long national nightmare of helping more Americans get affordable health coverage will come to an end.

Let us pray.

 

[drjean]

It must go to SCOTUS as two appellate courts have just ruled opposite rulings based upon the same data.

 

[Veritas]

There seems to be some dispute.

Appeals Courts Can't Agree on Whether Obamacare Subsidies Are Illegal - The Wire

Judge Uses Domino's Pizza to Explain Obamacare Exchanges - The Wire


Looks like this might go to the Supreme Court.

I'm sorry but this analogy works only in government minds. The law says what it is. Trying to torture the language to make it say something it clearly didn't by way of a pizza chain is absurd. In the real world, you can't say, "but this is what I really meant". You will be taken on your word.

And maybe soon, our long national nightmare of helping more Americans get affordable health coverage will come to an end.

Let us pray.

And once again, you paint the problems with Obamacare as opponents not wanting people to have healthcare. Essentially you are saying that Obamacare is the ONLY solution and none other be considered.

It must go to SCOTUS as two appellate courts have just ruled opposite rulings based upon the same data.

Where does it say that in the law?

 

[MachZer0]

And maybe soon, our long national nightmare of helping more Americans get affordable health coverage will come to an end.

Let us pray.

Perhaps someone will come up with a liberty based plan to provide affordable healthcare to people

 

[MikeCarra]

Perhaps someone will come up with a liberty based plan to provide affordable healthcare to people

Well, they had 100 years or so to figure that out and apparently no one could.

So it's important that any NEW ideas are quashed as soon as they are generated.

It's pretty awful that the richest nation on earth can't ensure that millions of its citizens are kept away from affordable healthcare like it was in the good ol' days!

What is this nation coming to?

 

[MikeCarra]

And once again, you paint the problems with Obamacare as opponents not wanting people to have healthcare.

Well considering that there are no real plans that are as well developed as Obamacare and considering Obamacare was part of a CONSERVATIVE concept and when it was enacted it suddenly became anathema, I'm left with little other explanation.

Essentially you are saying that Obamacare is the ONLY solution and none other be considered.

No, there's always Single Payer. But we know how YOU FOLKS would react to that, don't we?

 

[DaisyDay]

I'm sorry but this analogy works only in government minds. The law says what it is. Trying to torture the language to make it say something it clearly didn't by way of a pizza chain is absurd. In the real world, you can't say, "but this is what I really meant". You will be taken on your word.

Well, it is a governmental law decided by government judiciary, implemented by government bureaucrats, so...

And once again, you paint the problems with Obamacare as opponents not wanting people to have healthcare. Essentially you are saying that Obamacare is the ONLY solution and none other be considered.

It is the only solution that made it into law here. It's far from perfect, but it's what we have and it's better than the nothing we had before.

 

[MachZer0]

Well, they had 100 years or so to figure that out and apparently no one could.

So it's important that any NEW ideas are quashed as soon as they are generated.

It's pretty awful that the richest nation on earth can't ensure that millions of its citizens are kept away from affordable healthcare like it was in the good ol' days!

What is this nation coming to?

Sorry, but there are affordable alternatives already to government forced health insurance. That's why it's obvious that Obamacare is more about power and control than it is about health care

 

[Veritas]

Well, they had 100 years or so to figure that out and apparently no one could.

The US Constitution doesn't guarantee free healthcare for all.

So it's important that any NEW ideas are quashed as soon as they are generated.

Whatever.

It's pretty awful that the richest nation on earth can't ensure that millions of its citizens are kept away from affordable healthcare like it was in the good ol' days!

Obama is working very hard to "fundamentally transform America" into your average poor country. Obamacare is an excellent first step. Ah yes, the days when people had choices and freedom. Wouldn't want that, now would we?

What is this nation coming to?

Exactly what Obama wants it to.

Well considering that there are no real plans that are as well developed as Obamacare and considering Obamacare was part of a CONSERVATIVE concept and when it was enacted it suddenly became anathema, I'm left with little other explanation.

Obamacare was rammed through at the stroke of midnight by a democratic run congress with no support from the republicans. There was no "transparent" debate and no one knew what was in it. Because, you know, Nancy Pelosi said.....

No, there's always Single Payer. But we know how YOU FOLKS would react to that, don't we?

Which in every country you look at, is in bad shape. You can't have an aging population and low birth rate and have it turn out well. I talked to my friend in Germany just a few weeks ago. Her "free" healthcare costs $500 month on top of her exhorbitant taxes.

It is the only solution that made it into law here. It's far from perfect, but it's what we have and it's better than the nothing we had before.

What we had before was better for the majority of American's. The so-called problem of the uninsured wasn't even solved with Obamacare. Because Obamacare was never about solving anything. It was about taking control of 1/6 the economy and forcing American's into a half-way point to socialize medicine. The liberals have always known how to achieve their objectives incrementally.

 

[Arcangl86]

What we had before was better for the majority of American's.

So the people who had no choice but to die because they literally were not able to buy insurance or afford the millions of dollars of care were better off?

The so-called problem of the uninsured wasn't even solved with Obamacare.

It might have been if the Supreme Court didn't decide that one of the vital aspects of the act was up to the states to decide to implement And oddly enough, only Republican states refused to expand Medicaid.