Obamacare

Court Rules That Subsidies in Obamacare's Federal Exchange are Illegal, Dealing Huge Legal Blow to Health Law

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Whitehouse.gov

The U.S. Court of Appeals for the D.C. Circuit delivered a huge blow to Obamacare this morning, ruling that the insurance subsidies granted through the federally run health exchange, which covered 36 states for the first open enrollment period, are not allowed by the law.

The highly anticipated opinion in the case of Jacqueline Halbig v. Sylvia Mathews Burwell reversed a lower court ruling finding that federally run exchanges did have the authority to disburse subsidies.

Today's ruling vacates the Internal Revenue Service (IRS) regulation allowing the federal exchanges to give subsidies. The large majority of individuals, about 86 percent, in the federal exchange system received subsidies, and in those cases the subsidies covered about 76 percent of the premium on average.

The essence of the court's ruling is that, according to the law, those subsidies are illegal. They were always illegal, and the administration never had the authority to offer them. (According to an administration official, however, the subsidies will continue to flow throughout the appeals process.)

The court's ruling agreed with challengers who argued that the plain language of the law, which in multiple instances limits subsidies and credits to any "Exchange established by the State," does not allow subsidies to be disbursed in exchanges where a state declined to establish its own exchange and is instead run by the federal government. Basically, the federal government cannot step in and create and run an exchange that is somehow still an exchange established by a state.

"We conclude that appellants have the better of the argument: a federal Exchange is not an 'Exchange established by the State,' and [the relevant section of the law] does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges," the decision says.

The law "plainly makes subsidies available only on Exchanges established by states," the ruling says. "And in the absence of any contrary indications, that text is conclusive evidence of Congress's intent. To hold otherwise would be to say that enacted legislation, on its own, does not command our respect—an utterly untenable proposition."

It's a major blow to the way the administration has chosen to implement the health law, and a victory for plain language legal interpretation as well. 

Update: On a conference call this morning, Case Western University Law Professor Jonathan Adler, who was instrumental in laying the legal groundwork for the case, made the point that this is not the court changing the law. It is the court interpreting the law and its clear language. Which means that any of the ruling's effects, including the loss of subsidies, were built into the law when it was passed.

"If people lose those subsidies, it's because the courts rule that those subsidies are and always have been unlawful," he said. The administration "never had the authority" to dish them out. "Halbig did not cause those effects. Those are the effects of the Affordable Care Act."

"If that causes dislocation, if that causes disruption, I think the responsibility lies with the IRS and the administration," Adler also said.

Update 2: A different circuit court ruled today that subsidies offered through federally run exchanges are authorized on the law. This creates a circuit court split, which increases, but does not guarantee, the chances of an eventual hearing by the Supreme Court. It is also possible, and arguably even more likely, that the circuit split will be dealt with via en banc review. 

Read the complete decision here. More background on the case here and here. I'll have more to say after sorting through the full details of the ruling. This post will be updated. 

NEXT: Better Than ENDA: Obama Bans Anti-Gay Discrimination by Government Contractors

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  1. Paging Weigel. Paging David Weigel. Please come to the white courtesy phone.

    1. I am so deliriously happy I quit FB entirely after the screechfest following Hobby Lobby.

      1. I was going to make a comment about how obnoxious FB is going to be.

      1. They’re probably in shock how fellow DC’ers could rule against the chosen one.

        1. There are comments if you click on it. Mostly thinking the ruling was good.

          1. The government’s argument was absurd. “No, no, the specific language of the statute should be ignored.” It’s one thing to try to interpret vague language, quite another to rewrite something abundantly clear and precise.

            1. Pelosi’s Axiom just keeps getting better and better.

              1. We have to repeal the law so you can forget what is in it.

                1. Wait, repeal it? And bother with that pesky Congress?

                  It’s going to be merry hell trying to figure out which camps they were sent to.

            2. I foresee that future legislation will be restricted to one paragraphs. The ACA would be: “This is a universal health insurance bill. Now go ye forth and make regulations for it.” Just make it as vague as possible and let the admin implement it.

              Actually, I think there will be a single bill saying: “Do WTF you want and leave Congress out of it.”

  2. It’s like finding the prize in the box of Jack-in-the-Box.

    1. It’s like finding the prize in a box of Cracker Jack that somebody puked in.

      1. In an apt metaphor, Obamacare is a box of puke marketed as Cracker Jack. The prize, a part of the law ruled illegal, is just a consolation prize.

      2. It’s like finding out the guy who raped you wore a condom.

    2. It’s like finding a diamond ring in a CrackerJack box.

    3. Sounds a lot like finding the prize in the popcorn box sitting on my lap.

      1. LOLZ

    4. It’s like finding out that hell has a swamp cooler.

      1. Beats hell out of lying around on a cloud all day strumming a harp for eternity.

  3. No Kos thread yet. I eagerly await the salty ham tears.

    1. HuffPo is going apoplectic right now.

      1. Headline: “TWO GOP JUDGES STRIKE DEATH BLOW AGAINST OBAMACARE”
        Today’s going to be a good day.

        1. It is amazing isn’t it? They cannot report news objectively. They just can’t.

      2. Taste the delicious proggie rage…

      3. “We need to protect America from these Conservative, activist judges.”

        lol.

        1. its almost sad to see each partisan side trot out ‘activist judges!’ when things don’t go thier way.

          Its a nice slice of schadenfreude.

      4. “punishing millions because of a typo”

        oh man that’s a good one

        1. noyce!

        2. That word. It doesn’t mean what they think it means.

          1. Exactly. You ain’t *seen* “punishing” yet. 😉

          2. My name is Affordable Care Act- you killed my ability to redistribute wealth, prepare to get sternly spoken about!

            1. +1 I too am not left-handed!

              1. ANYBODY WANT A PEANUT?

          3. “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean?neither more nor less.”
            “The question is,” said Alice, “whether you can make words mean so many different things.”
            “The question is,” said Humpty Dumpty, “which is to be master?that’s all.”

        3. “I guess you should have read it and found out what was in it before you passed it, hunh?”

        4. No typo, the clause was specifically added in to get Nelson’s vote.

  4. This will be great until Roberts authors the 5-4 opinion next June overturning the DC Circuit on the basis that the requirement is actually a penaltax.

    1. Barry lacks he political juice to make threats against the court now. Roberts may grow a pair this time.

      1. John-Boy is playing the long game when it comes to appeasement.

        1. Either that or he’s playing the long game when it comes to constructivism.

      2. I don’t really understand how you can make threats against people who have a lifetime appointment at their job in the first place. I think it’s possible the Roberts really is just a dipwad without any sense.

        1. For anything in DC there’s always a price and for anyone there there’s always a debt to be paid.

          1. Lannisters always pay their debts.

            1. Why do the Lannisters have such big beds?

              They like to push two twins together to make a King.

              1. LOL, but unfortunately it makes a pretty shitty King.

        2. He just doesn’t want the court to be seen or accused of being biased or political. Even though sometimes that’s its fucking job.

          1. The best way to seem apolitical is to ignore politics and just look at the merits of the case….

            The exact opposite of what he did.

            1. Even more basic than that. The court will always piss off someone, so it’s a fool’s errand to even worry about it.

        3. Three letters, alan_s: NSA. Assume that the NSA “has something” on anyone important.

          1. Assume that the NSA “has something” on anyone important everybody.

        4. They can be impeached.

          If they have a crime on Roberts and are holding it over his head that would be how.

          1. That would require both houses of congress to work in concert. Not happening.

    2. Exactly. “Its not a subsidy, it is an automatic tax refund.”

      1. Subsitax? Subsifee?

    3. That’s the problem with the law now, you can find case law that supports whatever position you want to take so the law can mean anything or everything or nothing.

      The law no longer serves much of a function as a bright line to say beforehand what is or is not legal. We might as well have a single law saying “Thou shalt not do Bad Things” and as to what is or is not a Bad Thing, well, we’ll let a judge and jury decide after the fact whether or not you did a Bad Thing.

      1. Vague laws, arbitrarily enforced laws, contradictory laws, mountains of laws–how is all of this different than no laws at all?

        1. Well, they are still written laws that have some chance of being enforced evenly. If we literally had no laws at all, then the law would just be whatever Obama thinks when he wakes up in the morning. Wait… dang.

          1. And remember, you are expected to comply with the law to the absolute letter, under risk of being locked in a little room for years, or even decades. Try arguing this nonsense about typos, or the spirit of the law, or any of that jazz in a courtroom and see how far that gets YOU.

        2. ROADZ. All this randomization of chaos and chicanery is so much better than actual anarchy.

        3. No laws can’t be used against you. Vague laws allows those in power to punish the ones who support the other side.

          1. Bureaucracies love vague laws. More power to them in those circumstances. The last thing the government will do is make a set of binding laws which we all abide by. No graft possible in that circumstance.

        4. Simple; it allows the statist swine who are nominally in charge to claim that they are not ruling by momentary whim.

    4. I think he might go the right way on this; his attitude seems to be that it isn’t his job to fix shit laws.

      The progs played chicken with the states because they didn’t just want to pass their law, they wanted the pleasure of watching their opponents forced by political pressure to collaborate with them. It isn’t enough for them to win, they have to feel dominant. That’s already fucked them on the Medicare expansion front.

  5. What do you mean they can’t just change or selectively enforce the law as they see fit? If the president (from my party) does it, it’s not illegal. Racists. /proggie

  6. “He’s made his ruling, now let him enforce it.”
    -Andrew Jackson Barack Obama

    1. As long as warren has to go on the trail of tears, I’m happy.

  7. Does this mean the end of hearing about the Hobby Lobby ruling?

    1. I hope not. Hobby Lobby is the gift that keeps on giving.

    2. No, it means a Twelfth Commandment from Fauxcahontas.

      1. Well, eleven is an odd number.

        1. Lizzie Warren to Nigel Tufnel: “My commandments go to twelve.”

        2. She wanted one more than the Ten Commandments to show how hers were superior.

  8. http://www.democraticunderground.com/1014852655

    Republicans War on People continues n/t

  9. Beautiful.

    If it get’s to the SC and they concur or refuse to hear it’ll be beautiful watching the TEAMS try to jerry-rig a solution. Cluster fuck all the way around. Another expression of the competence of our elected representatives.

    1. From a libertarian perspective, its kind of the perfect scenario.

    2. Seems like it just needs a new law providing authorization and funding for the subsidies. The Dems just need to get it done before the election… though frankly, I can imagine Republicans supporting it too. The exchanges are set, people are depending on them – we must put politics aside and do something!!

      1. Once they hand out free shit it’s impossible to take back the free shit.

        I can imagine the nightly news casts with interviews of previously “insured” and subsidized citizens crying about their lost “benefit”.

        The Dems will be seen rationally as the stupid party (cannot even adequately write legislation), and the Repubs as evil (“They took away my healthcare!!!!”).

        Losers all the way down.

        1. Once they hand out free shit it’s impossible to take back the free shit.

          It’s been done before.

          1. It’s been done before.

            citation.

            1. New Zealand in the 1980s.

            2. Canada in the ’90s, especially Alberta. BC in the aughts.

              1. Well, what a relief NZ in the ’80’s and Alberta, BC in the ’90’s.

                I’m sure that proves it’s possible in America in 2014(sarcasm).

                1. Well, the Progs are always telling us we should give more precedence to foreign law?..

            3. Bill Clinton’s welfare reform?

        2. There’s a difference between taking back and stopping the flow of further free shit.

      2. Yeah, I would say its odds-on the Repubs throw this away in a stupid attempt to appeal to mushy middle voters.

        This ruling does have a big, powerful lobby supporting it: employers. This case is less about subsidies than it is about the employer penalties the subsidies trigger. No subsidy, no penalty. Employers should fight to protect this ruling.

        1. This.

          The employer mandate has yet to go into effect, and this adds further weight to the case that it shouldn’t or won’t.

          However, there will be hell to pay if voters have to give back the subsidies they received, and both sides will get the fury.

          What I predict will happen is that congress will sever the employer mande from the subsidies, so that the subsidies can go into effect without triggering the mandate.

          1. We don’t need no steenking Congress for that.

  10. god damn the pusher man.

    1. +Steppenwolf

      1. Hoyt Axton, actually.

        1. Wasn’t aware of that. Too bad youtube won’t show me a video of Hoyt singing it.

        2. But my recording is by Steppenwolf. I stand by my comment!

    1. TP has moar butthurtz

      http://thinkprogress.org/justi…..65/halbig/

      The Supreme Court of the United States, however, has long recognized that a law’s clear purpose should not be defeated due to an error in proofreading. As the Court explained in 2007, “a reviewing court should not confine itself to examining a particular statutory provision in isolation” as the “meaning?or ambiguity?of certain words or phrases may only become evident when placed in context.”

      1. Ignorant scriptores de legem non excusat

        1. veni oderunt tu rico suave…

          1. veni vidi viscious

      2. Do they apply this same statutory interpretation when it comes to the 2nd Amendment? Don’t they always say how you can’t read the amendment as to only apply to militias (which are now obsolete)?

        Oh, wait…

      3. The clear purpose of the law is that only exchanges established by the State are authorized to offer subsidies. The context of the law is clear that “the State” means a state government.

        Mendacious fucks.

        1. Except that when the Left uses the phrase the State they are usually referring to a central government. I guess the marxists are inadvertently revealing their red socks.

      4. Regardless, this was not a proofreading error. It was written this way deliberately as an attempt to coerce opposed state governments into creating exchanges. When those states called their bluff they decided they would try to ignore it at the executive level. Now that that hasn’t worked they’re trying to say it was just a typo. Hopefully SCOTUS won’t let them get away with it.

        “You arrogant ass. You’ve killed us!”

        1. I mentioned it up above, but Im pretty sure that the clause was specifically added to get Ben Nelson’s vote.

        2. Roberts fucked up big time opening the door to rewriting laws that clearly said the EXACT OPPOSITE of what the opinion says.

    2. “Punishing Millions For A Proofreading Error”

      They’re trying to play it off like this was just a typo and not an attempt by the Dems to coerce opposing state governments into creating exchanges.

      1. I’m sorry, the law itself is punishing millions. My premiums went up, my deductibles doubled, and my very major insurer now routinely denies claims. All of this happened because of the ACA.

        1. So you’re saying you now have standing to sue the Senate for incompetence, negligence and/or fraud?

          1. No, silly, little people don’t have standing.

            1. But you are encouraged to bend over.

            2. Of course not – they’re supposed to be on their knees.

    3. * [new] Also, David Klemencic (0+ / 0-)

      A person who lives in West Virginia.

      This idiot has sued because he doesn’t want to pay $21.00 a month for health insurance. You heard me: $21.00 a year.

      /facepalm

      Actually i heard you…and you said $21 a month.

      1. It’s only $21.00 over the course of his life. And this guy is suing!?

        1. That’s a lot for contraception.

    4. Well, if you’re going to set up a Rube Goldberg
      machine, all the parts have to be perfect.

      My favorite comment on kos

    5. I like how the Kos post describes Forbes commentary as “barf worthy”.

      AFAIK, Forbes has written the best stuff on the ACA, hands down, of anyone, by a long shot.

      I guess they mean *they* can’t stand to read clear explications of their own laws.

  11. Jack-in-the-Box?

    Where did that come from?

    Cracker Jack, dagnabbit.

    I blame teh skwerlz.

    1. Skwerlz don’t alter text. They just delete or duplicate it.

      Though, I’m sure Jack-in-the-Box has given out toys in some type of Kid’s meal before…

      1. They are learning…. evolving…

  12. The court’s ruling agreed with challengers who argued that the plain language of the law[…] does not allow subsidies to be disbursed in exchanges where a state declined to establish its own exchange and is instead run by the federal government.

    Don’t talk to me about the plain reading of the law! That’s just judicial activism! The ACA is a living, breathing document that can be construed to mean anything our fearless and most gracious and loving Leader wants it to mean!

    1. I know that the \sarc font is on. Still puked.

  13. From the opinion:

    The individual mandate requires individuals to maintain “minimum essential coverage” and, in general, enforces that requirement with a penalty. See 26 U.S.C. ? 5000A(a)-(b).

    IT’S A TAX!

    1. It’s a requirement to buy a goddamned license just to live – that’s what it is.

  14. HuffPo comment:

    “Kay Rist Anderson ? Roaring River, North Carolina
    Millions of Americans again will be shut out of the health care market. Thank You Republicans,”

    Yes. Americans are no longer allowed to pay cash for healthcare or buy their own insurance.

    1. The butthurt is awesome.

    2. Yes. Americans are no longer allowed to pay cash for healthcare or buy their own insurance

      … with other people’s money.

    3. And don’t forget: Republicans are the ones who wrote and passed this law with no input whatsoever from Democrats.

    4. To be fair, there are states where you aren’t allowed to pay for medical services with cash.

  15. Paging all the king’s horses and all the king’s men…

    1. *does The Humpty Dance?*

  16. Bush family factotum, consigliere Roberts, will fix this.

  17. It’s OK. Uncontrollable wailing and gnashed-teeth damage are covered by Democratcare.

    1. Yeah, ENTs and Reconstructive Orthodontists are rubbing their hands with glee…

  18. Pass the law to find out what is in it!!!

  19. Why can’t those mean old judges quit being jerks about what the law says, and just let the Administration enforce what it means.

    1. just let the Administration enforce what it means intends

      Only intentions matter

      1. Actually they don’t, since the intention of this clause was to punish states who didn’t create their own exchange.

        1. Only perceived intentions matter

        2. Nah, when the states called their bluff the Dems decided this was just an innocent typo. Do try to keep up.

  20. This is a rifle shot to the heart of the ACA. A Cato mapped out the target.

    1. ELIMUNASHUNIST RETOURIK!!1!1!1!!!

      1. nice reset – the good old days!

    2. Careful with those hopes, though. Given that the ACA has been as difficult to kill as Jason Voorhees it’s not nearly the end.

      1. Zombieland Rule #2 ? Double Tap

        1. If we can party with Bill Murray too I like that idea.

        2. Apparently Rule #1 applies as well. This fight has been going on for years…

        3. You’re my new crush for saying that.

    3. I eagerly await Chuck Schumer referring to this as a dagger to the heart of middle class New Yorkers. It’s his go-to line for anything that doesn’t go his way.

      1. Moobs don’t get on camera on their own, ya know.

  21. “If the Republicans had decided to participate in the legislative process instead of being obstructionist, this would have never happened.”

    -Progtard’s body after head explodes

    1. Those evil republicans and their competent law writing skillz.

      They are so evil they knew Democrats are incompetent in writing laws and let those good hearted dems forget important language needed to get health care to the uninsured.

      1. The Koch brothers must have reconstituted the English language in a attempt to bamboozle the legislative process. It’s so obvious.

    2. Well if their head exploded, you saying that they’ll be talking out of their ass?!

      1. Either that or whatever other orifice is available, don’t want to get gender specific as this is a family site.

    3. Maybe, I dunno, bad laws shouldn’t be enacted in the first place?

    4. Except the filibuster (which I assume is being referred to here) IS part of the legislative process. *sheesh*

  22. The LA Times reported (paraphrased) ‘apparently no one noticed the wording until after Obamacare passed’. Of course this characterization is wrong, the state requirement was intentional to pressure states into setting up exchanges so Obamacare supporters could claim their support in.

    It’s interesting to see how little the leftist media still know about Obamacare.

    1. All they needed to know was that Obamacare would make healthcare available and affordable for everyone and that outcomes would improve while costs went down.

      All of that by adding another layer of bureaucracy to an already over burdened industry where the federal govt is still the largest payor of all healthcare services. The Left does not understand the American healthcare at all.

      1. Or economics for that matter.

    2. According to the Ministry of Truth, it’s a typographical error that no one noticed until after the law passed.

    3. See, they really did have to pass it to find out what was in it!

    4. Maybe they should have taken the time to read the fucking bill in detail before bringing it a vote?

  23. Before we celebrate too much, it’s worth noting that it was just a 3-judge panel. This one will be reviewed en banc, and I’m not as sanguine about the decision holding there.

    1. I don’t think the decision will stand but watching the irrational screeds of our ideological opponents is amusing.

      1. Sad but true. The plain language of the bill is so absurdly obvious that this ruling should hold up, but actual words don’t seem to matter to the political class.

      2. I suspect it will stand, but Congress and Obama will enact a “fix” to this “loophole”. Since Republican critics of Obamacare have positioned themselves as Defenders of the People (criticizing the employer mandate for example) it’s going to be awfully hard for them to argue against such a bill.

        1. Why? Anti-ACA resolution has been working for them. I know it’s the stupid party but broken clocks and all that.

          1. Anti-ACA isn’t a position, it’s a brand. On a more detailed level they are currently arguing people satisfied with their circumstances shouldn’t have to pay a penalty or lose their coverage.

            To fight the “fix” they have to claim people should not receive subsidies on the federal exchange when buying the exact same policy in California merits a subsidy.

            They’re switching from the “give money to people” side to the “prevent giving them money side”. I anticipate a corresponding switch in their approval polls.

            1. GOP senators from states that built their own exchanges shouldnt have any problem opposing the change.

              That is at least 2 votes from KY.

        2. I don’t think the Republicans are dumb enou… Um nevermind.

        3. it’s going to be awfully hard for them to argue against such a bill.

          No idea if it will come to that…but if it comes to a congressional fix the republicans will be asking for concessions and changes to the law.

          1. Fair enough, but that gives the media a hook to paint Reps as blocking “fairness” and making little Johnny’s mom cry. Three possibilities: (1) Reps give in preemptively to avoid the blowback, (2) Reps give in when blowback reaches hurricane level, and (3) Reps tough it out.

            I estimate the likelihood of 1+2 @ roughly 90%.

          2. And getting nothing . . .

        4. I can’t see any ‘fix’ making its way through committees in time for November.

    2. If you believe Judge Edwards (the dissent) then this isn’t appropriate for en banc review.

      En banc in DC CTA is supposed to resolve intra circuit problems.

      But more interestingly, Judge Edwards, in denying en banc (along with Bader Ginsburg) in 1987 (Neuman v. Bowen, 824 F.2d 1240, 1243) :

      The dissent’s “clearly wrong”/”highly dubious” test not only serves no useful purpose in this intermediate appellate judicial context, it does substantial violence to the collegiality that is indispensable to judicial decisionmaking. Collegiality cannot exist if every dissenting judge feels obliged to lobby his or her colleagues to rehear the case en banc in order to vindicate that judge’s position. Politicking will replace the thoughtful dialogue that should characterize a court where every judge respects the integrity of his or her colleagues. Furthermore, such a process would impugn the integrity of panel judges, who are both intelligent enough to know the law and *1244 conscientious enough to abide by their oath to uphold it.

      This exact analysis applies. While we know this Carter appointee won’t follow his own advice, it will at the very least be amusing to watch. To get an en banc review Edwards needs to ask for it, I believe.

      The legal analysis is actually pretty simple. Do the words “the State” create an ambiguity, or not? But his analysis begins with a political issue — the intend of one of the parties. That should be minimally relevant.

      1. Politicking will replace the thoughtful dialogue that should characterize a court where every judge respects the integrity of his or her colleagues.

        It’s kinda like how every discussion in the rest of the world now seems to be a mandate on the overall morals of the people involved. You can’t possibly think that someone might agree with the Hobby Lobby ruling because that’s how the laws in question work, or even because you think that interference with the employee / employer negotiation by outside forces is wrong, but rather it can only be because you are a horrible person, who hates women, is seeking to usher in theocracy, and probably kicks puppies for fun.

    3. Isn’t Brown one of the judges who is on the full panel?

  24. Expect a request for an en banc ruling where the Democratic judges outweigh the Republicans

  25. Maybe if they read the law before they passed it this wouldn’t have happened.

    1. This part was on purpose. But on the other hand, calling it a penalty instead of a tax was on purpose too…

    2. Crazy talk!

  26. Lucky for everyone this was a bipartisan bill and Obama crossed party lines to see that it was passed and he will now work with the Republicans in congress who helped pass the act to fix the language.

    1. yes, I’m sure the house democrats along Republican: Representative Anh “Joseph” Cao of Louisiana will get right on that.

      1. It is really amazing that literally only one republican voted on it.

  27. “Court Overrules APA Enactment Provisions: Women, Children Hurt Most”

  28. It will be fun to check my facebook wall tonight and see various iterations of, “Who cares what the law says? This is stupid! Common sense subsidies!”

  29. *continues doing The Humpty Dance?*

    1. I don’t get what you are so happy about.

      8% of Americans liked Obamacare just like it was.

      I know because Tony told us so. (inadvertently)

  30. Is this getting appealed to the SC? If it stands, then we are seeing what many here predicted: piecemeal disassembly and destruction of the ACA.

    1. It’ll go to the full DC Circuit first.

      If the DC Circuit overturns this decision, I think SCOTUS will sit tight unless and until another Circuit says “no state exchange, no subsidies or penalties.”

      If the DC Circuit upholds this decision, I think SCOTUS will take the appeal.

      1. My understanding is that since the case involves a federal bureaucratic regulation, only the DC court can hear the case.

  31. Huffpo comment:

    Sonya Choose Ellis ? Top Commenter ? Kansas City, Kansas
    That’s because the President does not need Congress approval. If he did we would be even worst off. All because a bunch of a-wipes don’t like the fact that they ARE NOT in charge.
    Reply ? Like ? 21 ? 25 minutes ago

    1. Forget it, she’s rolling

      1. Forget it, she’s rolling trolling.

    2. I’m going to choose to assume this is satire without investigating. The alternative is too depressing.

    3. Sure, it’s fun to laugh at derp sometimes, but it’s also profoundly sad that this is what our crap civics education has lead to.

      1. I’m not sure it would matter, but if I was to make a sweeping education change it would be to make civics classes mandatory. The class would be essay based. You can have whatever opinion you want, but you would be forced to defend it logically.

        1. Grats. you just destroyed the 2-party system.

        2. They were mandatory when I went to high school.

    4. Progs believe in mob rule. The majority gets everything they want and have the right to squash any dissent.

  32. The cost curve is getting skewed, alright.

  33. Somebody tell me how am I supposed to feel about this!

    1. How? Did they forget 2010?

    2. Echo chamber.

      They read the same crap Shrike read and then forgot to read the end of the article that said 8%.

      They really do not know how unpopular Obamacare is.

      Hell they don’t even know how popular the Hobby Lobby decision is and polls came out right after that decision.

    3. To be fair both sides say that about every loss.

    4. That’s becauseeveryone benefits from the law in ways they never have before:

      * [new]You don’t get it(2+ / 0-)

      The entire system will collapse if this ruling is upheld. byJamieHonTue Jul 22, 2014 at 08:26:33 AM PDT[Parent]

      * [new]That would be terrible news for the GOP.(0+ / 0-)

      20 million Americans now have ACA-compliant policies. Even those who receive healthcare through their employees are benefiting from it.Now what happens to all those benefits? Insurance companies will sit idly by? Consumers will go back to the “status quo”?The GOP will be compelled to act. And that will be interesting, indeed. byMore Questions Than AnswersonTue Jul 22, 2014 at 08:36:46 AM PDT

      They really have no idea what is going on in the real world. To them this law means it is raining unicorns and rainbows and everyone loves it.

      1. “That would be terrible news for the GOP”

        Then surely Kos must be celebrating this ruling.

    5. Note to the left: We all hate Obamacare. Just like most of you do.

  34. Expect a request for an en banc ruling where the Democratic judges outweigh the Republicans

    “DO-OVER!”

    1. Well, any appeal is ultimately a do-over.

  35. Suderman missed the main point of this ruling in his write-up:

    Employer penalties are triggered by subsidies paid through the (state) exchanges. This doesn’t just invalidate the subsidies in the federal exchanges, it protects employers in those states from penalties if any of their employees sign up on a federal exchange and get subsidies.

    From the decision:

    Appellants are a group of individuals and employers residing in states that did not establish Exchanges. For reasons we explain more fully below, the IRS’s interpretation of section 36B makes them subject to certain penalties under the ACA that they would rather not face.

    1. You that, and all I hear is, “blah, blah, blah – I’m a dirty whore.”

    2. You mean it wasn’t just evil Republicans trying to kill poor people?

  36. If the ruling stands, how they handle subsidy claw-backs should be interesting.

    1. Is the decision retroactive in any way? Who would wind up repaying whom?

      1. That’s a very interesting question.

        Typically, when a court rules that something is not authorized by law, that ruling is retroactive, as in, the law never authorized this.

        However, courts also will protect “reasonable reliance” on a law as written, so they’ve got wiggle room to make something like this prospective only.

  37. *getting tired, but STILL doing The Humpty Dance?*

    1. The Humpty DANCE is your CHANCE to do the Hump! (Do the Humpty Hump! Do the Humpty Hump!)

      1. Samoans!

  38. Interesting bit from NRO

    President Obama’s old Harvard Law professor, Laurence Tribe, said that he “wouldn’t bet the family farm” on Obamacare’s surviving the legal challenges to an IRS rule about who is eligible for subsidies that are currently working their way through the federal courts.

    http://www.nationalreview.com/…..lenge-joel

    1. Larry went on to say, “But hey, what do I look like, some inbred redneck piece of shit that owns a farm?”

  39. For many politicians the constitution is just a series of typos…

    1. Well, have you seen the original Consitution? It’s in *handwriting*! Who can read that crap anymore?

  40. So, do people getting subsidies have to pay them back now?

    1. I suspect congress will pass a bill allowing people to keep subsidies already received.

      1. And the only way that will happen is if he goes hat-in-hand to the Repubs in congress. If he’s lucky they won’t make him wear a Dunce cap for the next two years.

        1. You’re such a kidder. We all know that the Repubs will go to HIM and tell him how they will make it all better.

          1. You’re both wrong. The framers only had pens. Obama has a pen AND a phone.

  41. I wonder how many of the people criticizing this decision will remember that a week ago, the Obama Administration determined that territories are not subject to the Affordable Care Act because they are not “states”. Which is the very same argument that this decision is based on.

    It boggles my mind that with this case pending, Obama will use the very same argument to exempt the territories. Did he think that the DC circuit would not notice?

    1. “Would use,” not “will use.”

  42. The Dems in 2010 screwed themselves good this time. They bet that most states would set up their own exchanges and thus withholding subsidies to the few states that did not, they could shame them into either setting up exchanges in order to get fed subsidies for their constituents, or electing Dem governors who would do the same. They bet wrong and now claim ‘scrivener’s error’. Spectacular.

  43. In related news, Las Vegas’ largest provider for cancer services dropped all of its ObamaCare patients the other day.

    “The CO-OP is one of 23 nonprofit carriers nationwide written into the Affordable Care Act ? also called Obamacare ? to create consumer-driven, locally based health plans for state insurance exchanges. The sponsors, which include the Culinary Local 226’s Health Fund and its national parent, UNITE HERE Health, won $65.9 million in federal startup loans in 2012 to start the nonprofit.”

    http://www.reviewjournal.com/n…..e-patients

    I know! It’s hard to believe that a union plan couldn’t get it together well enough to keep ObamaCare exchange cancer patients’ bills paid!

    Question: how much taxpayer money (through grants or loans) has been spent to help unions set up CO-OPs on the exchanges?

    I don’t want my taxpayer going to a union called “UNITE HERE” or the “Culinary Local 226”. If I did? I’d just send them my money or cosign on their loans of my own free will.

    How much taxpayer money has been/is being spent on these unions across the country throughout all of the exchanges?

    1. Those payouts to unions and other orgs to help signups are loose change. The real money is in building websites/databases that don’t work.
      Sweet money.

  44. Yay. I live in Cali, which isn’t run by a right-wing reactionary, so I’m good. Dear medically-uninsured, keep voting for those Tea Partiers. It’s more important to keep your sense of outrage at libruls than your kidney. Those guys, with their social security, Medicare, and unemployment benefits, need to get off their high horse.

    1. It will be hilarious watching your proggie shithole go broke.

      1. Hopefully by the time the rats start to flee, flyover country will have seceded and closed the borders.

    2. QQ MOAR AMSOC. =D

    3. Speaking as someone with a prexisting condition and an absolutely necessary Rx that cost me about $1,600 a month when I was uninsured, I’d much rather do away with ObamaCare pronto.

      Oh, and the reason it costs so much here (rather than in Canada or Mexico) is because of Medicaid and Medicare. They lose so much money giving that stuff to people below cost on government programs that they have to gouge private pay patients to make up for the difference.

      I know! It’s hard to believe that serving parasites below cost has consequences in the real world–but it’s true!

      Meanwhile, why would I want to be sick in a system where qualitative choices about my healthcare are made by politicians and bureaucrats rather than me?

      And qualitative considerations are what healthcare is all about. How do bureaucrats know how much having hip surgery (rather than living in a wheelchair) is worth to me? How do politicians know how much keeping my colon (rather than having a colostomy bag) is worth to me?

      Why would anyone trust bureaucrats and politicians to make qualitative choices like that for them about their healthcare–when they could be making those choices for themselves? How much propaganda do you have to swallow before you start thinking that unaccountable bureaucrats making qualitative choices for you about your healthcare is a good idea?

      1. Stop hating poor people Ken.

      2. Ken, All those folks look at the VA and just know they will be well taken care of by Uncle Sambo.

      3. Just out of curiosity, but what medication costs $1600/month?

        Is that an AIDS cocktail, cancer drugs? For how many months, or is it permanent for the rest of your life?

        1. Well, I don’t want to tell too much about myself, but it’s just an anti-inflammatory.

          Hopefully, it’s for the rest of my life. Otherwise, there’s surgery, which could be less expensive–if you consider the costs of the medication out of pocket.

          In both Canada and Mexico, the same name-brand medication is about $240 a month. That’s what I would be paying if it weren’t for Medicare and Medicaid underpaying for everyone on those programs–and leaving private pay patients to pick up the difference.

          There are lots of situations like mine. The hip replacement is a good one. Why give older people a hip replacement when wheelchairs are so inexpensive, relatively speaking? The qualitative advantage of being able to walk doesn’t show up on any bureaucrat’s spreadsheet–it can’t. And yet qualitative considerations like that are the most important aspect of healthcare.

          In a market I get to make those choices for myself. When the government makes those choices (what to cover, whether it’s worth the cost, etc.), those choices are made by bureaucrats. And they’ve been making those decisions for Medicaid and Medicare patients for decades. That’s what CCI and Medical Necessity were always all about.

          http://en.wikipedia.org/wiki/M…..edicare.29

          1. Sounds like Chrons.

            My sympathies.

      4. You can get your colon removed and not have a bag.

        1. I worked reimbursement for a long time in an acute care hospital that specialized in gastrointestinal issues.

          They can make a pouch out of the lower end of you small intestines, but it doesn’t operate like your colon did.

          It’s still coming out of your rear end, but it doesn’t absorb excess water like a colon, so you’ll have diarrhea for the rest of your life–and you’re going ten to fifteen times a day.

          The people who elect to get rid of their colons do so because either a) the steroids are ineffective or b) because they’ve got colon cancer.

          Everyone else would rather keep their colon. But doing so is often more expensive than taking it out. Keeping it means you’re always on medication, you need to have a colonoscopy at least once every couple of years, and when things go bad, you’re going to need special stays for transfusions and things.

          There’s no good reason to keep your colon under those circumstances really–except for the qualitative considerations of the individual in question. But guess what? I’m a libertarian–and that means the qualitative considerations of individuals is important to me. In fact, if a system can’t account for the qualitative considerations of individuals (like a market does so well), then that system needs to be dismantled, burned, and buried.

          …which is what needs to happen with ObamaCare.

          1. Good luck with everything, Ken. Sorry to hear you’re having some difficulties.

          2. Believe me, you’re overselling how much less effective a J-pouch is than a colon. No, it’s not as good, and some people probably do end up going 15 times a day, but both calling it diarrhea and saying 10 times a day is vastly overstating the low/better end of the bell curve.

            Anyway, I never claimed that a J-pouch was better than a colon. I said it’s better than a colostomy bag. (Well, technically I didn’t even say that, I just said it’s an alternative option).

      5. That’s what happens when Proggie morons are more concerned with Cost than Price.

      6. I know! It’s hard to believe that serving parasites below cost has consequences in the real world–but it’s true!

        Can the really be called “parasites” when the host (the U.S. government) welcomes them with open arms (figuratively speaking)? I’d say it the government that’s the parasite.

    4. Sorry bud, Ohio and Florida are on the federal exchange. And all presidential politics revolve around those states, so your Ocare is doomed unless the courts relent or the GOP goes full retard.

      1. “or the GOP goes full retard.”

        So, not especially doomed, eh?

        1. “Wait, we can buy FL and OH in ’14 for money already in the budget?”

      2. “or the GOP goes full retard.”

        So Ocare is not doomed?

        1. Doh! ant1sthenes beat me to it!

    5. american socialist|7.22.14 @ 12:06PM|#
      “Yay. I live in Cali, which isn’t run by a right-wing reactionary, so I’m good”

      Yep, your thugs are doing what they have to do, stealing shit so assholes like you don’t have to pay what it costs.
      I’m sure you’re very proud of being a sleazy bastard, aren’t you?

      1. Parasites gotta suck blood.

    6. I live in Cali, which isn’t run by a right-wing reactionary, so I’m good until reality catches up in the next few years, the government goes broke, and the state quite possibly breaks up.

      FTFY

      This is as good as it gets for you and your fellow sick-minded egalitarian fucks. This-right now-is basically Proggie Golden Age of the 21st Ce. It is all downhill for you from here. Reality and progressivism are simply incompatible.

      1. +6 Californias!

    7. Yay, you live in the State with the highest unemployment, the highest welfare caseload, and the highest taxes. Fully one-third of all welfare recipients in the United States live in your State; the home of blood-sucking leaches. You must feel right at home.

    8. Yeah, isn’t California broke many times over?

      1. Should’ve hit refresh.

    9. AAAAaaaaaand, Rick Perry steals three more tech businesses from San Diego.

      In other words, the productive citizens are fleeing the state, and the american socialists are moving in. Implosion inevitable.

      1. *grabs Popcorn

  45. Hey, does anyone know if the subsidies have been paid directly to the insurance companies, or if people are actually getting them as a tax refund, after paying full price for insurance?

    I was under the impression that subsidies received through the exchange basically resulted in a discounted insurance price, and the subsidies were routed directly to the insurers.

    This will make a big difference in how any clawbacks play out.
    If they have to be paid back by insurers to the IRS, then the result will be either a major loss to insurers, or else tons of bills for unpaid premiums get mailed out to subscribers.

    Alternatively, it could end up as a big tax bill for many middle class families next year, and a lot of pissed off voters.

    Basically, are people going to have to pay the subsidies back to the IRS, or are the insurers going to have to pay them back and then try to get customers to cough up the cash?

    1. I think the insured paid a discounted premium and the feds paid the insurers the subsidy in bulk.

      So, in light of the ruling, insurers maybe incredibly reluctant to honor or administer the subsidies.

      1. The subsidies continue in the meantime.

    2. There’s a separate case that I believe has just ruled that the subsidies are legit.

      http://www.cnbc.com/id/101819065

      This will send it to the Supreme Court for sure.

      P.S. Bastards!

      1. 3-0: Full Retard Court

  46. Uh:

    “The Obama administration immediately declared that those policyholders would keep getting financial aid for their premiums as it seeks review of the ruling. White House spokesman Josh Earnest said the decision would have “no practical impact” on tax credits as the case works its way through further appeals.”
    http://www.sfgate.com/news/med…..638136.php

    So it looks like O is asking how many divisions the courts have.

    1. If the GOP wins control of the Senate, it needs to shut everything down until this law is repealed. It needs to fucking go. And, while they’re at it, I have several thousand more laws to eradicate.

      1. Also, I would like a million dollars.

        1. Make mine $100M, at the rate these clowns are going, I want to be able to afford hookers and blow next year, too.

      2. I suggested this when they took the House, but Boehner was too big of a pussy.

      3. But 8% of Americans want to keep it just like it is.

        I know because Tony told us so.

        1. You notice Tony is never here when things don’t go his way.

  47. 4th Circuit just upheld the fed exchanges. so we’ve got a conflict

    1. Regardless of who wins the district review it will go to the Supremes.

      Another 5/4 decision?

      Proggies will lose their minds.

      1. It’s OK. Mental illness is covered by Democratcare.

  48. According to an administration official, however, the subsidies will continue through the appeals process, though it’s unclear where the authority to do that will come from.

    I believe the authority lies in the FYTW clause of the Constitution.

  49. I’m torn here. On one hand, I hate Obamacare, and love seeing the Democrats pay for their shadiness in passing this. Nothing about this line of text was a mistake. It was intended to blackmail states into going along because the administration thought everyone would their healthcare bill.

    On the other hand, I hate the fact that ordinary people forced to buy through these exchanges have been used as political pawns and have to deal with all this bullshit.

    I also don’t think this decision is going to stand. We have another similar case where a 3-0 decision approved the Federal exchanges. The 9th Circuit is packed with Democrat appointees.

    Even if gets to the Supreme Court, I’m not sure I trust Roberts to have the balls. He rewrote the bill for the Dems last time.

    1. I have no sympathy for “ordinary people” because 64 million of them elected these a-holes.
      Elections have consequences – tough shit.

    2. The plaintiffs are NOT “using ordinary people as political pawns.” It’s not the plaintiffs’ fault that undoing this mess is as bloody as doing it. That fault lies entirely with the Dems.

      1. While I acknowledge the role Democratic shadiness played, the fact remains – people who may or may not have voted for Obama or any of his lackies are being jerked around here.

        That’s an argument for not giving the government authority in itself.

        1. And I insist: the plaintiffs are not “jerking” anyone.

  50. “Case Western University Law Professor Jonathan Adler, who was instrumental in laying the legal groundwork for the case, made the point that this is not the court changing the law. It is the court interpreting the law and its clear language. Which means that any of the ruling’s effects, including the loss of subsidies, were built into the law when it was passed.”

    Cue up 10,000 prog outlets explaining how the court “changed the law”.

    t-minus… now?

    interestingly, the prog channels are fairly silent = or at least spinning this differently. The most distict PR line i’ve seen is @ Gawker =

    Appeals Court Rules That Red States Will Get Even Less Obamacare

    They seem to want to think that this is just GOP being meanies, and not actually a fatal flaw in the design of the Act.

    Huffpo goes more Medea-esque, pulling its hair out and beating its breast =

    Two Republican Judges Gut Obamacare, Threatening Health Care For Millions

    Read= ‘republican judges’ – not the court!, and its not the law that suffers?… its the “millions” otherwise being forced into it!? OH NOES

    All they see is partisanship. No one seems to grasp the nature of “law” at all. Its the Will of the People being thwarted by *evul repuglibaggers*

    1. its the “millions” otherwise being forced into it

      That’s ironic since most lefty sites interpret anything that happens in the political world through the lens of “how will this affect Obama.”

    2. No one seems to grasp the nature of “law” at all.

      Oh, I think *plenty* of people grasp the nature of both “law” and law. That’s partly why we’re so screwed.

  51. The claims of ignorance as to why this was included in the bill in the first place is galling. The Dems did this as a form of extortion. It’s entirely their own creation.

  52. I don’t know why the law’s supporters are unhappy. Now they can use this to pressure all the Republican states to set up state exchanges.

    That was the original point, after all.

    1. There’s a slight chance the media won’t be able to spin it as Republicans increasing people’s premiums, and the Dems might actually get blamed for the consequences of the bill they passed.

    2. Funny, I was thinking this would create pressure for state exchanges to get dumped.

      Because doing so frees the state’s employers from having to pay penalties.

      1. Well then, it’s going to be the evil corporations vs the little guy.

  53. Here’s some background on the “drafting error” from Cato:

    Both the text of the statute and Congress’ intent are thus crystal clear. The Act authorizes tax credits only in Exchanges “established by a state under Section 1311,” and withholds tax credits in states that do not establish an Exchange. The section of the law that authorizes tax credits uses or refers to that restrictive language no less than six times. The remainder of the statute supports the plain meaning of that restriction, and there is nothing in the statute that conflicts with it. The only statement anyone has found in the legislative history on this point comes from Sen. Baucus, the Act’s chief sponsor, who confirmed this was by design. The incentive that this limitation produces is consistent with numerous other incentives that Congress created to motivate states to establish Exchanges.

    Since the PPACA ties additional “cost-sharing subsidies”8 and penalties against employers9 to these premium-assistance tax credits, the statute likewise restricts those features of the law to states that establish their own Exchanges.

    http://www.cato.org/publicatio…..bamacare-1

  54. Correct me if I’m wrong, but isn’t the government side actually NOT arguing that this was a proofreading error, but that the interpretation of the statute allows for federal subsidies as well?

    1. I don’t know what the gov’t argued in court, but what you stated is what sympathizes have been saying on the internetz. “It’s clear what was meant and the court refuses to read deeply because they want any excuse to kill people.”

    2. Further, per Megan McArdle:

      The government argued that this was ridiculous; when you consider the law in its totality, it said, the federal government obviously never meant to exclude federally operated exchanges from the subsidy pool, because that would gut the whole law.

      1. Unless of course the intent of the law was to coerce states into forming their own exchanges.

  55. Cue hissy fit from left-tards in 3… 2… 1…

  56. Damnit.

    8% of American liked Obamacare just like it was.

  57. Those were two different circuits, so I’m not sure how an en banc review is the solution.

  58. When he heard the ruling, I bet Derp Vader made darkness in his pants.

  59. I say this as an advocate of free markets and limited government:

    Possibly tripping up Obamacare on a technicality does not compensate for decades of conservative (and even libertarian) incompetence in the health care debate. Politicians and pundits played defense instead of offense. You can’t “just say no” to O-care, you have to put forward an articulate free market alternative.

    The point can’t be overemphasized that the pre-Obamacare status quo was NOT a free market. For decades, the government has interfered in the health care market (primarily through a tax code that ties us to employers for health care), interference that is at the root of the legitimate concerns over health care access and affordability.

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