Another Major Obamacare Legal Decision Looms

There’s another big Obamacare legal decision on the way—and this one could be the most consequential yet.

Sometime soon, perhaps as early as this week, the DC Circuit Court will rule on the case of Halbig vs. Burwell, which challenges the legality of the insurance subsidies that are the foundation of the health law’s private coverage expansion.

The potential impact is huge: If the court rules against the law, the subsidies of the vast majority of individuals who signed up for health coverage in the federally facilitated exchanges operating in 36 states would be put at risk. A decision against the administration would not destroy the law—but it would completely upend the current implementation of Obamacare.

The challengers in this case have the virtues of clarity and simplicity on their side: The text of the law clearly and unequivocally states that subsidies are only available through exchanges "established by the State." This is not some one-off drafting mistake, as many initially believed. The language is repeated throughout the law, and "State" is even explicitly defined to mean state government.

And yet the Internal Revenue Service (IRS) issued a rule allowing for the disbursement of subsidies, in the form of tax credits, to individuals who sign up for coverage in exchanges run by the federal government. That’s exactly what the administration has done. During Obamacare’s first open enrollment period, which ran from October 2013 thru March 2014, the federal government ran exchanges for 36 states, signing up about 5.4 million people for coverage, 86 percent of whom were subsidized. The tax credits are substantial. On average, they cover about 76 percent of the monthly premium payment for people who get subsidized coverage within the federal exchange. 

Yet by the plain language of the law, those subsidies are illegal. The spending is not authorized by law. As Michael Cannon of the Cato Institute and Jonathan Adler of Case Western Reserve University Law School have argued in a paper laying out the legal case against the IRS rule, the "largest effect" of the IRS rule allowing subsidies in the federal exchanges is to "increase federal spending." Essentially, they write, the rule "appropriates federal dollars without statutory authority."

Because they do not have the plain language of the law on their side, Obamacare’s defenders have taken a decidedly more impressionistic approach. Their argument is that the "structure" and "purpose" of the law make it clear overall that the health law’s insurance subsidies were meant to be available in all exchanges, regardless of whether the exchange was set up by the feds or by a state. "Congress is clearly indicating that it wants a system of exchanges, nationwide, to provide affordable health care for all Americans," argued Justice Department lawyer Stuart Delery in March.

If that’s what Congress meant to clearly indicate, then perhaps that’s what Congress should have written. The administration’s argument, then, boils down to the idea that Congress could not have meant what it actually wrote when it said that subsidies are available in exchanges established by states, and that what Congress is supposed to have "indicated" in the law’s larger structure and statement of purpose should rule rather than the plain text itself. Squint your eyes and look at the general shape of the law, but ignore the contradictory specifics.

One lower-court judge has already been convinced by this approach, but the challengers may have more luck with the three-judge panel in the Circuit court, which heard oral arguments in March. As National Journal’s Sam Baker reports, "Two judges appeared to split along partisan lines, leaving Judge Thomas Griffith, a George W. Bush appointee, as the likely swing vote. Griffith seemed during oral arguments to at least be open to the challengers' arguments, and perhaps leaning in their direction."

The Circuit court’s decisions are typically released on Tuesday and Friday mornings, which means a decision could arrive as soon as tomorrow.

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  • Francisco d'Anconia||

    Thank Christ, a new thread. 2 1/4 hours later.

  • Rhywun||

    This is like the worst chat room ever.

  • perlhaqr||

    A/S/L?

  • Rasilio||

    16/f/your town

  • Fist of Etiquette||

    The text of the law clearly and unequivocally states that subsidies are only available through exchanges "established by the State."

    Does the text of any given legislation mean more or less than the constitutionality of its effect?

  • John||

    The structure and purpose of the law do no such thing. The reason why it limits the subsidies to state run exchanges is to give states the incentive to create their own exchange or see their citizens lose access to the federal subsidies. The fact that the big meanie Republican governors called the Kenyan Village Idiot's bluff is not and should not be the Court's problem.

  • Lord Humungus||

    But The King has already decreed it is right. Why even bother with such trivial legalities?

  • flye||

    Cut them some slack. It's difficult to be explicit about congressional intent in under 1000 pages.

  • Swiss Servator, Alles Klar||

    Well, they passed it, now we have found out what is in it ain't what they needed it to be....

  • John||

    Think of it this way, suppose every single governor set up an exchange and then this November a new Republican governor was elected in some state and decided to close down the state exchange, does anyone here think that the Progs wouldn't laugh like hyenas as the prospect of depriving those evil tea bagging bastards in said state of federal subsidies?

  • Drake||

    I'm really liking the new Thai and Chinese dating advertisements along the right column. Anyone actually try them?

  • Idle Hands||

    Funny I have a "luxury drug rehab at lakeside treatment center" and a steel ad.

  • Sudden||

    I believe these ads are generated based on cookie history to be tailored to what you're presumably interested in. I get Walmart, overpriced boat shoes, and mortgage rates.

  • Lord Humungus||

    I get nuh-think! /NoScript

  • Copernicus||

    I get ads for a nut-punch relief topical cream. I guess I'm reading too much H-n-R

  • ||

    What the fuck are "online advertisements"?

  • Hyperion||

    I don't have anything over there, because Ghostery and Disconnect. I don't miss the ads and sort of like the ultra fast load time.

  • Francisco d'Anconia||

    AdBlock happened on my computer in response to Taboola.

  • Ted S.||

    I only have cached images set to load, and Flash turned off, so I don't get most of the ads at H&R.

  • kinnath||

    Any chance at all the district court will do the right thing here and rule against the administration?

  • Jesus H. Christ||

    No.

    No, there is not.

    There is no chance the court will do the right thing.

    I don't mean to equivocate, so let me be clear. Not a chance in Hell.

  • GILMORE||

    Just curious (and you don't need to go into great detail)... but why not?

  • Jesus H. Christ||

    I know the district court is not the Supreme Court, but based on Roberts' penaltax prevarication, I think the judiciary is trying to largely keep their hands off (ie. not do their job) regarding this law.

  • Unable2Reason||

    The contortions he went through for the penaltax has left him much more limber to repeat similar gyrations for a 2nd, 3rd, 4th,....time

  • Aloysious||

    So... we're in Hell?

    Explains why I keep seeing pictures of that fugly Clapper dude.

  • BiMonSciFiCon||

    How can you expect them to determine what Congress meant? The document is over three years old. /voxsplained

  • perlhaqr||

    Is the ACA legislation "a living document" like the Constitution?

  • WhatAboutBob||

    And another ...

    Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered to make all kinds of decisions regarding health coverage for Americans. The board’s powers are significant, and some say completely unconstitutional, because language in the ACA frees the board from any kind of congressional or judicial oversight.

    The Latest Major Legal Challenge to Obamacare

  • Bryan C||

    Well, obviously all we need is for IPAB to lend their supra-legislative and ultra-judicial omnipotence to the President, and then He can fix everything Himself.

  • PapayaSF||

    The board’s powers are significant, and some say completely unconstitutional, because language in the ACA frees the board from any kind of congressional or judicial oversight.

    How is that not unconstitutional?

  • John||

    http://townhall.com/tipsheet/c.....t-n1859545

    NOW puts Little Sisters of the Poor on its "Dirty 100 List". Keep it classy NOW.

  • VG Zaytsev||

    If those frauds (LSOTP) really cared about the poor, they'd be advocating government funding to abort them out of existence.

  • Hyperion||

    If proggies and greenies actually cared about the environment, they'd all kill themselves right now. And while that may not improve the environment, it's sure to increase world happiness a zillion fold or so.

  • wef||

    Every woman who wants an abortion should be forced to have it.

    Simple eugenics.

  • Hyperion||

    NOW is for the wiminz, except for when it's against them.

  • The Last American Hero||

    Anybody who was paying attention during the crafting of the ACA knew the intention of Congress at the time. There is zero doubt the wording was inserted as a way to create incentives for states to make their own exchanges.

    As has been said repeatedly - this is what happens when you pass landmark legislation without bringing along a big chunk of the opposition party.

    I hope Team Blue enjoys every bite of this turd sandwich.

  • gimmeasammich||

    This. If I recall, foisting the cost of this onto the states was one of the bigger arguments against the ACA. Why are people JUST NOW acting surprised to find this out?

  • thom||

    Team Blue is going to love this. All of the problems so far can be explained away as Republican obstruction. They're going to have a field day with this.

  • VG Zaytsev||

    This is essentially boils down to the same argument than the government used in it's losing the Hobby Lobby case.

    That a regulatory agency ruling supercedes black letter law passed by Congress.

    It's an incredibly dangerous aspect that everyone is ignoring and that the shit weasel Roberts vary well may sign onto.

  • Sudden||

    This, although with the Hobby Lobby decision, the regulatory agency ruling wasn't in direct contravention to the text of the law, it merely asserted regulatory power regarding something not specifically addressed within the text of the statute. Here they are asserting a regulatory ability that directly contradicts the plain language of the statute.

  • Rich||

    the plain language of the statute

    What a quaint notion!

    / Lawyer Attorney at Law

  • ||

    The administration’s argument, then, boils down to the idea that Congress could not have meant what it actually wrote when it said that subsidies are available in exchanges established by states, and that what Congress is supposed to have "indicated" in the law’s larger structure and statement of purpose should rule rather than the plain text itself. Squint your eyes and look at the general shape of the law, but ignore the contradictory specifics.

    Well, the Roberts court bought that line of bullshit when they ruled Obamacare as a tax. Why in the fuck should we expect anything different this time around.

  • MegaloMonocle||

    Pretty much where I am.

    Any Court that can get from "Congress shall make no law" to a "commercial speech exception" can easily get from "exchanges established by the States" to "any old exchange."

  • GILMORE||

    OT =

    Chi-town celebrates Independence Day weekend by engaging in GunblazingMurderfest

    Feckless law enforcement blames lack of COMPLETE GUN CONTROL for all violence. Human beings cannot be blamed for the nonstop killing that Guns demand. police themselves were powerless to stop the gunkilling

    "...five people were shot by officers, and at least two of them were killed.

    In three of the incidents, the victims had pointed weapons at officers when they were shot, the Chicago Police Department said in a statement. A fourth man was shot and seriously wounded by police after he told them he had a weapon, police said."

    Gun words! Gunwords make police guns extra-shooty.

    Problem here is clearly Gunlove and lack of More-Better-Law

    "McCarthy said gangs and repeated criminal offenders cherish their weapons and are more likely to engage in gun battles with police than discard their guns because of lax state and federal laws"

    There are 2 choices in life! Battle police or discard guns. Gangs would be better behaved and more compliant but for *clearer and more vigorous statutes*. One need only spend a day or two on the streets with these gangs, and hear of their constant debate about the state-level penalties for misuse of firearms to realize that changes to legislation would have major effect on criminality.

  • Francisco d'Anconia||

    If we only had more laws, criminals would follow the law. Jesus, GILMORE, do I need to spell it out for you?

  • Rich||

    One need only spend a day or two on the streets with these gangs, and hear of their constant debate shooting their mouths off ....

    FTFY

  • 110 Lean||

    In three of the incidents, the victims had pointed weapons at officers when they were shot

    I don't get why people don't realize that if you are pointing a weapon at the cops, use it immediately.

    A fourth man was shot and seriously wounded by police after he told them he had a weapon, police said.

    They can shoot you for that?

  • MegaloMonocle||

    the victims had pointed weapons at officers when they were shot

    According to who?

  • GILMORE||

    "'They can shoot you for that?""

    I find the scenario entirely plausible.

    "Why did you shoot this man in the back?"

    "well, as he was running, he was shouting, 'I have a gatling gun! machine gun! BIG ONE!!', so, you know, i shot him"

    Which happpens *all the time*. Crazy, i know.

  • GILMORE||

    I found the "Discard their guns" line especially, "whut?"-inducing.

    Or the "cherish" thing.

    I see this all the time now, where there's a clear injection of editorial spin into the language being used... i mean, "Cherish?" - they intentionally fetishize the guns as the locus of all emotion, as though its the very impulse to *possess* the weapon that creates the ill-feeling that leads to violence itself.... like a drug. They Can't Discard it! They are unable to release themselves from the Sway of the *guns*.

    Its so retarded that the logical part of your brain assumes this is some kind of 'bad editing'; but then you see it repeated so often that you start to realize that its conscious effort to change the story from being one about "A Culture of Violence" among the urban poor.... to being one about "objects" and how they are treated by Laws. As though *thats* what the problem is.

  • Rhywun||

    conscious effort to change the story

    Of course. They created the urban underclass, and the War on Drugs that's tearing it apart - now they want to disarm it. All of this better than admitting one was wrong.

  • Bryan C||

  • Hyperion||

    5-4, upholding the law. Roberts the deciding vote. You heard it here first.

    The subsidies are a part of the penaltax. The part where they take it from you and give it to someone else who doesn't want to work, but votes for the incumbent, like they're supposed to.

    Roberts knows he has to side with Obama on this one. Else he risks losing that private island and whatever else it was he got for selling 350 million people into slavery and destroying the healthcare industry and privacy, forever.

  • VG Zaytsev||

    They blackmailed him by threatening to undue his less than legal adoption and send his wife to prison.

  • John||

    Did they bribe him or blackmail him? Maybe he risks his affinity for small boys coming out.

    I actually think it will go the other way. I think Roberts is obsessed with people liking him and now that the law is such a disaster and so unpopular will now kill it in hopes it makes him popular.

  • Emmerson Biggins||

    I hope your read on the situation is right.

    I'm going to be real pissed if Mr. Penaltax slimes his way out of this one too.

  • Overt||

    I think Roberts is obsessed with people liking him and now that the law is such a disaster and so unpopular will now kill it in hopes it makes him popular.

    I don't think it has anything to do with popularity for him.

    WRT the Penaltax, he essentially was saying, "Look bitches, if you are stupid enough to elect people stupid enough to tax you into oblivion, don't look to the court to bail you out. Elections have consequences." (Note, I don't agree with his decision, but that's what he was saying.)

    He sided with the law in that case, and I think he will side with the law in this case. And this law clearly says what is legal and appropriate, not what the Progs wish it did. He will find in support of the Challengers.

  • John||

    No. I think the penaltax decision was him saying "I am here to defend the honor and legitimacy of the court and there is no way I am striking down a law that a good portion of the country wanted and hasn't even been implemented yet."

  • Overt||

    No. I think the penaltax decision was him saying "I am here to defend the honor and legitimacy of the court and there is no way I am striking down a law that a good portion of the country wanted and hasn't even been implemented yet."

    The law has never been majority popular since its initial days, so by upholding it he was always going to be pissing off a (very slight) majority of the population.

    I see no evidence that Roberts wanted to be popular. What I see is that he didn't want the court to become a lightning rod for what is probably going to be one of the larger legislative battle zones of the foreseeable future- much as it was for Roe vs Wade. (Prior to RvW, State and Federal governments were grappling with the abortion issue in legislation. RvW ended that legislative dialogue.) He saw this as a legislative battle, and so ruled that it should live or die based on legislation, not some wizard shouting "CONSTITUTION" and making it go *Poof*.

    I tend to agree that not every bad law is unconstitutional, but in this case I think he was wrong.

    If he sided with the law*, he would said it was a penalty, not a tax.

    Which is what he did. He said that the power to level a penalty is given by the same power to level a tax. That is, a Penalties and Fines are merely a subset of Taxes. I don't agree with this reasoning, of course, but it is consistent with the text of the law.

  • MegaloMonocle||

    He said that the power to level a penalty is given by the same power to level a tax. That is, a Penalties and Fines are merely a subset of Taxes.

    A fine example of total disregard of the plain meaning of words.

  • blcartwright||

    as much as I dislike Roberts' decision, the IRS has a long history of applying differing tax rates based on whether people did or did not comply with the wishes of Congress. Buy a solar panel, pay less tax. Don't buy health insurance, pay more tax.

  • Auric Demonocles||

    If he sided with the law*, he would said it was a penalty, not a tax.

    *meaning Obamacare. If he sided with the actual law, aka the Constitution, he would have said it was unconstitutional as Congress has no authority to regulate intrastate non-commerce.

  • GILMORE||

    This is a DC circuit court ruling. Not SCOTUS.

    Or are you channeling the inevitable future?

  • Hyperion||

    Well shit, I just assumed, I didn't read...

    But yes, I say it's inevitable, and when it happens, my prediction will hold.

  • Longtorso, Johnny||

    No way a little thing like the law takes $$ away from possible voters. Taxes no longer have to start in the House, the letter of the law (including the ever shifting deadlines) is meaningless.

    OCare is an enabling act.

  • Rich||

    If that’s what Congress meant to clearly indicate, then perhaps that’s what Congress should have written.

    "The right of the people to keep and bear subsidies available only through exchanges established by the State, shall not be infringed."

  • Adam330||

    "Congress is clearly indicating that it wants a system of exchanges, nationwide, to provide affordable health care for all Americans,"

    Hmm...then why did the government argue in NFIB v. Sebelius that it could pull all medicaid funding from any state that didn't expand medicaid?

  • Bryan C||

    This.

  • blcartwright||

    Right - the feds want the power of issuing or withholding subsidies to be able to get state and local officials to bend to their will.

    In this case, when 36 states decided against exchanges, Obama just said "screw it, give them the subsidies anyway, or else this whole thing will go to shit"

  • sarcasmic||

    The challengers in this case have the virtues of clarity and simplicity on their side

    I'm sure people thought "Congress shall make no law" or "shall not be infringed" were clear and simple as well.

  • JW||

    If that’s what Congress meant to clearly indicate, then perhaps that’s what Congress should have written.

    Deconstructionist kulaks!

  • Cliché Bandit||

    You all miss the point. It does not PROHIBIT the feds from creating an exchange therefor ALL GOOD BITCHES!

    I expect Thomas and Scalia on descent...by themselves...assuming they will even hear it.

  • Hyperion||

    You better read upthread before you too are scolded for not reading the story...

  • Cliché Bandit||

    how?

    The storied did not mention a specific prohibition on the fed of creating an exchange (i haven't read the bill though so there is that). If it makes it to the Nazgul I think they will fall in line with the intent approach since there is not explicit prohibition. BUT I also don't think they will grant cert. Not in a million years.

  • MegaloMonocle||

    The feds can create an exchange. Nobody's disputing that.

    The case is about whether the subsidies are available to the fed exchange.

  • Cliché Bandit||

    My over-generalized and poorly worded point, which has been thoroughly abused, is that the law itself doesn't prohibit the feds from doing the subsidy causing act. While I agree that it is stupid and weak I believe it will be how they get around the "but the law says" argument.

  • kinnath||

    Sometime soon, perhaps as early as this week, the DC Circuit Court will rule . . . .

    Not at SCOTUS yet.

  • Cliché Bandit||

    Scalia on descent...by themselves...assuming they will even hear it.


    Perhaps I should write legislation and I am not being clear enough.

  • Cliché Bandit||

    and = as

  • Sudden||

    See my comment below. Expert timing in order to bring the case to the highest court during the 2016 electoral season. And should the court actually judge the case on its plain-as-day merits and strike down the subsidies, the free shit brigade will have a conniption fit that motivates them to deliver 49 states to Fauxcahantus.

  • perlhaqr||

    The issue isn't that the law supposedly prohibits the Feds from creating an exchange, it's that the law only authorizes subsidies for plans purchased on the State exchanges, not Fed ones.

  • Sudden||

    Oh boy. Assuming the court actually strikes down a regulatory decision that directly contradicts the plain language of the statute as passed, the shit storm that will be unleashed on the USSC will be overwhelming.

    There will be millions of Americans whose free shit is no longer free shit. Instead of being angry at the people who forced them to buy things they didn't need and then dangled the carrot of a grossly illegal subsidy to soften the blow, the masses (asses that they are) will blame five robes for them no longer getting free shit.

    This case will likely be decided in the USSC term that immediately precedes the 2016 POTUS election and will deliver the White House to Lizzie Warren.

    FSM help us all.

  • ||

    I disagree. If it goes down the way you describe, I bet it comes down next summer, prompting Obama to somehow stack the court by creating a new circuit or something.

    They're already floating this at places like HuffPo. And it's selling to those people.

  • Cliché Bandit||

    Then last time it was floated it was a real danger. It is this time as well.
    ESPECIALLY if his excellency thinks his legacy is in jeopardy.

  • Cliché Bandit||

    Of course I am not very good at assumptions...look what happens when I assume people read to the end of my comment.

    just jokes kids

  • RBS||

    creating a new circuit or something

    Announced on February 5th, 2015.

  • widget||

    Is USSC the new acronym for SCOTUS. USSC is already taken by the United States Sentencing Commission? (I just looked that up!).

    Anyway, if there's going to be a new parallel branch of the judiciary it's going to need a snazzy name and uniforms to get any respect.

  • MJGreen||

    I'd hate to see such a thing succeed, but it would be fun to watch.

  • Francisco d'Anconia||

    and will deliver the White House to Lizzie Warren

    Doubt it. Anything bad for ACA is good for Republicans. Just don't see how the Dems benefit from failure.

  • Cytotoxic||

    Some people above seem determined to pre-emptively cry 'doom!' on every possible scenario. If it gets struck down, the Obama legacy is toast and the Free Shit Brigade gets mostly demoralized. The 'energized' section won't be enough to deliver pizza.

  • Rich||

    If it gets struck down, the Obama legacy is toast

    Then let's hope it's not *burned* toast, if you catch my drift.

  • waffles||

    Free pizza!? Sure I'll vote for whoever you ask me to.

  • Sevo||

    Obo I will issue a decree on a Friday afternoon through one of his minions; it will be as he so wills it!

  • MegaloMonocle||

    I can see the Repubs being craven enough to pass an amendment "fixing" this "drafting error" in yet another futile attempt at outreach to the Free Shit Army.

  • John||

    No way. Why do that? It is not like any of the free shit brigade pays enough attention to even know this case is happening.

    Now, if the court does strike down the law, then the free shit brigade will be out in force. Until them, no way.

  • Rasilio||

    Don't worry I am sure that the Supremes will find someway to save Obamacare.

    I know, they will call the subsidy a negative tax, the inverse of a penal tax and it will be legal under the taxing power. Since congress does not need any special authority to tax it is completely legal.

  • Auric Demonocles||

    I expect the decision to be issued via alt-text.

  • Bubba Jones||

    I hope this is delayed until more dem voters feel the sting. Otherwise they will deny the warts.

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