Why the Supreme Court Should Ignore Insurance Subsidy Disruption in the Obamacare Subsidies Case



The Washington Post's Greg Sargent looks at how many people could be affected by a Supreme Court ruling in King v. Burwell, an upcoming challenge to the implementation of Obamacare. The challengers in the case argue that the plain text of the law does not allow for the provision of health insurance subsidies in the law's federally run health insurance exchanges; the administration argues that the overall purpose of the law allows for its decision to disburse subsidies in federal exchanges. If the Court sides with the challengers, then federal exchange enrollees who receive subsidies would lose them, increasing the cost of their insurance.

Sargent points to recent enrollment data suggesting that the number of affected individuals could be higher than a previous estimate of about four million. 

"The reason this matters," Sargent writes, is that "highlighting the potential for such a SCOTUS decision to result in widespread disruptions and dire consequences — both for millions who might lose coverage and for the insurance and health care industry in these states — may figure heavily in the government's strategy for winning the case."

Basically, the government may attempt to convince the court that its interpretation of the law should be allowed because the disruption involved in ruling for the challengers might be too large.

This is not much of a legal theory or argument. If the administration's approach to implementing Obamacare is not allowed by the law, then the court should rule against it, period. That's true even if the disruption caused by ruling against the administration turns out to be quite large; indeed, the scale of the disruption would suggest the scale of the illegality.

Furthermore, ruling along these lines would set a terrible precedent. Allowing the administration to continue with an illegal implementation because stopping it would be disruptive would create incentives for this administration and others in the future to pursue illegal actions and then insulate themselves by finding ways to make ending those actions disruptive. 

In a way, this appears to be what the administration has already done by declining to inform enrollees about the legal uncertainty surrounding the subsidies.

If the administration was truly worried about the possibility of disruption to subsidized enrollees on the federal exchanges, you might think they would have warned those enrollees about the possible consequences of a Supreme Court decision in favor of the King challengers.

But the administration has done no such thing. In fact, the administration has refused to agree that such warning is necessary. At a congressional hearing last month, Marilyn Tavenner, the head of the Centers for Medicare and Medicaid Services, which oversees Obamacare implementation, was asked repeatedly whether federal exchange enrollees received any notice about the possible consequences of a Supreme Court ruling against the administration, which could include higher premiums and tax liability.

In response, she insisted that "nothing has changed for consumers—they can still come in" and enroll on the exchanges. "This is not is not a closed case and I'm not going to speculate," she said. "The law is pretty clear." The exchange with Rep. Jim Jordan (R-Oh.) starts around the 1:31 mark.

Now, Tavenner is in some sense right; the law is pretty clear. But it's clear that the administration's implementation is illegal. The text of the Affordable Care Act states on multiple occasions that subsidies are only allowed in "an Exchange established by the State," with "State" defined to mean the fifty states and the District of Columbia. These exchanges are only allowed under a section of the law—1311—that deals exclusively with state-run exchanges.

If administration legal officials pursue the strategy outlined by Sargent, it will be an attempt to have it both ways. On the one hand, they will have implied to potential enrollees that they should proceed with signing up for subsidized coverage because there is no risk of disruption. And on the other hand they would be arguing to the Supreme Court that it should rule in the administration's favor because the otherwise the potential disruption would be too great.

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  1. Aw, come on! As long as their intentions are good, who cares what the legislation actually says!

  2. “This is not much of a legal theory or argument.”

    but but but… FREE SHIT?

    Basically it seems to argue = “we’re handing out unasked-for favors to a whole lot of people = why does the supreme court hate people?”

    It presumes that the ‘benefits’ they’ve contrived to grant are now ‘necessities’

    Its basically the same scam as with ‘cost savings measures’ = make them painful! so that when it comes time to actually enact those parts that no legislator will dare put their name to them. So the “Expanded Coverage” parts will be guaranteed… but the actual ‘cost savings’ components are always optional

  3. Wow, the law as passed is a shit sandwich, and they want SCOTUS to explicitly unshittify part of it?

    Huh, I’d go one better – repeal the whole thing. Why polish that turd, if, as the fucking supporters are saying, it’s a turd?

    Course, I don’t have a vote on SCOTUS.

  4. Basically, the government may attempt to convince the court that its interpretation of the law should be allowed because the disruption involved in ruling for the challengers might be too large.

    And in news from 1954, the Board of Education of Topeka posed to the Court that the case of one Oliver Brown be decided in their favor, because the effects of desegregating the city’s public schools would create far too much disruption.

    1. It’s been well settled law for a while that administrative convenience doesn’t trump the Constitution. Then again, maybe the court will invent a penaltax-type exception.

      1. You know, if would be great if we culturally shifted back to some moral absolutes, like not letting the most corrupt human institution known, government, get out of control. A few modern Catos to grumpily deny even the most benign violations of the Constitution and/or civil liberties would be nice.

        Gubernacla delenda est.

      2. No telling what leverage they have over Roberts this time.

    1. When do we want it?

  5. Not that there’s no precedent for this, but it’s not the Supreme Court’s job to craft new law because the one legislators intended was flawed or, to be more accurate, royally stupid.

    Legislators can easily fix this law– and we’ve been told that by multiple supporters of the law. “Cleanup may be necessary and will happen,” we’re constantly reminded. Let the garbage men clean up the garbage.

    1. “Legislators can easily fix this law”

      I mean, just look at their track record. They ALWAYS fix the bad laws, eventually.

      1. It is easily fixed. First, start a fire. Then throw the law into it.

        1. Hold on there = has this area been zoned for fire pits? where’s the environmental sustainability review? This man isn’t licensed to handle matches. Sure, we’d love to throw the law into “a” fire, but the process isn’t clear it needs to be this one. Clearly this needs more time in committee.

          1. Very well. The government keeps an eternal flame or two around. Use one of those. Or toss it under a rocket prior to launch.

            1. The government keeps an eternal flame or two around.

              Toss it on JFK’s grave?

              1. Sure. He’d have opposed socialized medicine, anyway, so why not?

                  1. yes, you are correct, and it is super that the ba$tard is dead. Too bad LBJ did not suffer the same fate.

                    It is a shame we can’t get ALL the progressives in one place so that one nuke would get them all.

          2. I think you also need a union firestarter from Local 451 to actually throw the law in the fire.

        2. It is easily fixed. First, start a fire. Then throw the law legislators into it.


      2. I never realized ‘eventually’ was such a long time…

        1. In the long run? Oh, you mean that long run?

          1. It’s undeniable that, in the long run, entropy will slowly erode this law and others into their component particles, eventually ending in the information and heat death of the universe.

    2. SCOTUS doesn’t have to craft new law, only implement the lack of a severability clause to throw the entire mess out with the bathwater.

  6. my co-worker’s step-mother makes $82 /hour on the laptop . She has been fired from work for ten months but last month her pay was $13096 just working on the laptop for a few hours. check here……..

  7. Whatever SCOTUS does, it is going to be an affront to law, reason, and the english language.

  8. This is not much of a legal theory or argument.

    It’s a blatant appeal to emotion, and will result in a nine-zero decision in favor of the govt.

    For the children/grannies/blacks/indigent/whathaveyou.

    1. Actually it’s going to be 5-4 in favor with the one taking the heat for the deciding vote drawn by lot.

    2. “This is not much of a legal theory or argument.”

      It is an invitation for the court to do what it does far too often:

      Start with the decision that they would like to render and work backwards from there to gin up a rationalization for it.

  9. Your lunch time derp: a letter in my local paper

    Annette Parker, Grandfield, Okla.

    What has happened to respect?

    Now that God is not permitted in schools, in state and federal agencies, anarchy and disrespect have taken over. Lawlessness prevails. Law enforcement, military and teaching professions are no longer respected. Many citizens believe the laws don’t apply to them. When this attitude prevails, lives are in danger and law enforcement must place their lives in danger to protect the innocent. They face physical and verbal assaults, spitting, profanity, false accusations and even death while holding to a higher standard of behavior and not to retaliate.

    We should pray for, thank and demonstrate our appreciation for all branches of law enforcement and military for their willingness to place their lives in danger to serve and protect us from threats.

    We should also thank education professionals who are now repeatedly subject to disrespect in and outside the classroom while teaching traits of good character. Often those lessons fall on “deaf” ears.

    1. cont’d

      Let’s put God back in our nation so we can once again be a “blessed nation whose God is the Lord.” Where Christian principles of respect, caring, etc. will be allowed to flourish.

      The “Pledge of Allegiance” does not have a comma between “one nation under God” because minister, Francis Bellamy, did not want anything to separate our nation from God, including a comma. Bellamy penned the words to the pledge. Let’s return to reciting it properly and not pause where there is no comma.

      Thank you members of law enforcement, military, education and others who are making a positive impact on those they serve.

      Editor’s Note: The original pledge penned by Francis Bellamy did not include “one nation under God.” Those words were added by Congress in 1954 under the urging of President Eisenhower.

      I recall that Francis Bellamy was kicked out of the Baptist church for being a socialist. Funny how his goofy socialist oath became sacrament for socons.

      1. This 4-oz bottle of ultra-concentrated derp is as derpy as this 16-oz bottle of the leading brand of regular derp.

        1. Order now and get 2 tubs of Oxiderp for the price of one!

        2. ” There is no power on earth so worthy of honor in itself or clothed with rights so sacred that I would admit its uncontrolled and all-predominant authority. When I see that the right and the means of absolute command are conferred on any power whatever, be it called a people or a king, an aristocracy or a democracy, a monarchy or a republic, I say there is the germ of tyranny, and I seek to live elsewhere, under other laws.

          In my opinion, the main evil of the present democratic institutions of the United States does not arise, as is often asserted in Europe, from their weakness, but from their irresistible strength. I am not so much alarmed at the excessive liberty which reigns in that country as at the inadequate securities which one finds there against tyranny. ….

          I do not say that there is a frequent use of tyranny in America at the present day; but I maintain that there is no sure barrier against it, and that the causes which mitigate the government there are to be found in the circumstances and the manners of the country more than in its laws.”
          – De Tocqueville

          by ‘circumstances and manners’, i guess he would mean the shallow, populist institution-worship of someone like Annette, or the editorial staff at the NYT

          1. The Frenchie gets it right again.

        3. Let’s not forget where Bellamy got the phrase:

          “that this nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth.”

          A. Lincoln 11/19/1863
          Gettysburg, PA

      2. Why is it that founding father Thomas Jefferson, who had much less scientific evidence than we do today, knew that religion was nonsense, and so many people today still do not know it?

        “..And the day will come when the mystical generation of Jesus, by the supreme being as his father in the womb of a virgin will be classed with the fable of the generation of Minerva in the brain of Jupiter…”

        Letter from Thomas Jefferson to John Adams
        April 11, 1823 Jefferson to John Adams
        Thomas Jefferson
        April 11, 1823

        “In every country and in every age, the priest has been hostile to liberty. He is always in alliance with the despot, abetting his abuses in return for protection to his own” Thomas Jefferson Letter to H. Spafford, 1814
        History, I believe, furnishes no example of a priest-ridden people maintaining a free civil government. This marks the lowest grade of ignorance of which their civil as well as religious leaders will always avail themselves for their own purposes.
        — Thomas Jefferson, to Alexander von Humboldt, December 6, 1813

        The priests of the different religious sects … dread the advance of science as witches do the approach of daylight, and scowl on the fatal harbinger announcing the subdivision of the duperies on which they live.
        — Thomas Jefferson, letter to Correa de Serra, April 11, 1820
        It is the mere Abracadabra of the mountebanks calling themselves the priests of Jesus.
        — Thomas Jefferson, letter to Francis Adrian Van der Kemp July 30, 1816

  10. What will be great is watching the GOP drop a collective load at the idea of higher health insurance costs for any chunk of Americans and then working with Democrats to “fix” Obamacare on this.

    1. If anyone can make Obamacare a worse abomination than it already is, it is the Stupid Party.

  11. Why is a cadaver giving congressional testimony?

    Just because she’s the reanimated dead, she has a unique viewpoint on the matter?


  13. As a proud member of CPUSA, WE MUST pass The ACA. We must defeat capitalism. Communism will set America FREE.

    1. It did pass. You’re now living the dream, comrade.

  14. The irony is that I think that the Supreme Court is right to suggest that the government doesn’t have the right to simply step in and federally replace what the states haven’t done.

    On the other hand, I think it’s BS that the supposed “champions of capitalism” had too many handfuls of lobbyist dollars pressed against their ears to fully implement the state-level exchanges. For those prepping a deranged rant about “socialized medicine”, the exchanges are a price comparison tool like the one shown in the Progressive Commercials. The only reason for any congressman to sell their soul to a lobbyist over them is because it’s easier to con people when your competitor’s plan isn’t being shown on the same page.

    For those who want to tell me what I already know about how bad a law ACA is, bills passed along party lines are always badly written. If the GOP had negotiated prior to the passage and insisted on a version with at least some republican ideas instead of walking out and pouting like children at the last moment, a lot of trouble could have been avoided.

    If someone would actually demonstrate a vestige of IQ points to create an Amend proposal to overhaul the bill instead of screaming Repeal whenever the right cue card is shown, it would help a lot of people.

    1. DERP ALERT!

  15. FTA:

    ” the government may attempt to convince the court that its interpretation of the law should be allowed because the disruption involved in ruling for the challengers might be too large.”

    Here the government flaunts their proffering of a classic logical fallacy. Whether or not an argument is true cannot contain references to its consequences, irrespective of the likelihood of their potential unpleasantness or the likelihood of their coming to pass. It is known as “Argumentum ad Misericordiam.” Trying to make this case in a freshman logic class would earn a student an F.

  16. There is plenty of precedent for the SCOTUS to rule , with the “disruptions” taken into account.
    In every “affirmative action” case, where the action was ruled illegal, all of those hired or promoted were allowed to keep their ill-gotten gains.
    Watch the SCOTUS come down with a Solomon-like ruling that, those who already got subsidies could keep them and those, who come after, don’t.

    1. Which is not entirely unreasonable. The Feds enticed people into signing onto certain plans and promised them subsidies should they do so. The Feds should honor their promise, even though it was unlawful to begin with. And, no subsidies next year.

  17. There is a distressingly common mistake made by virually everyone in regards to this (or any) government. We the Slaves blindly accept playing by the rules set by the Rulers, as We have no role in the balances of Powers.

    The Rulers have us “worshipping” the Rule of Law, which laws are made by and oly by the Rulers themselves. Thus we find ourselves always trying to dot the i’s and cross the T’s despite that nobody within the Rulership has reason to heed them. It’s Their ballgame on Their field and must be played under Their Rules. Doesn’t that sound like Tyranny from the outset?

  18. Smokey joes said he wll not liek that.


  19. If I (the King) do it, it is legal!

    Hell of a legal precedent you cite, Baracky.

  20. It would appear that Reason has bought into the idea that it’s SCOTUS’ job to legislate. As Scalia has noted repeatedly, the legislature often fails and writes bad laws, but that does not mean an unelected body should rewrite them. Like it or not, democratically elected bodies often make bad decisions, but it’s the electorate’s job to fix that. SCOTUS’s job should be to determine the constitutionality of laws, nothing more, and, as Alexander Bickel suggested, even that might be suspect. And to suggest that the executive needs to warn people that a current law, may, in the future, be changed or overturned, is ludicrous. One might as well post a caveat on all speed limit signs saying they may be changed in the future so ignore them.

    1. The Court would not be legislating new law, it would be preventing the Obama Gang from doing so (in this one case). The law clearly refers to exchanges established by the states, and at the time this was explained as a means of pressuring them into setting up those exchanges. The Obama Gang found this inconvenient, so it rewrote the law.

  21. John Roberts has already rewritten the law once, possibly to “avoid disruption.” Why wouldn’t he do it again?

  22. If the courts in King v. Burwell, ultimately rule that those in the 36 states cannot receive federal subsidies it will be the greatest possible gift to Obama and the Democrats. Obama would give the Republicans in Congress one chance to pass a clean bill allowing subsidies in those states. If they do not the situation would be that taxpayers in Texas and all the red states that did not set up the state exchanges would have to pay taxes that went to subsidize those in the 16 states like NY and California that set up the exchanges. A typical single young person in NY making $20,000 would be paying $40 per month, after subsidies while the same person in Texas would pay $300 per month.

    “..Focusing attention on the insurance companies, which are simply intermediaries between the doctors and the patients, was a tragic error. It would like trying to solve a problem of high energy prices by focusing on gasoline stations. Only if the government sets prices can health care prices be controlled. Controlling prices does not automatically result in longer waiting times. Japan and Switzerland generally have shorter waiting times to see doctors than does the USA. Additionally, if prices were controlled there would be no such thing as “in-network” or “out-of-network” since all doctors would accept all insurance plans?”

    1. Note that the employer mandate is tied to the subsidies, so those states with no subsidies will also have no employer mandate. This means that in the end they will have full-time rather than part-time employment as their norm.

    2. OMG! Why didn’t I think of that?! Just let Gov’t set the price and it will be prosperity for everyone. This could work really well for gas prices, for example. I’m surprised it hasn’t been tried before in the US.
      Slightly off topic: My son, a junior in HS, expressed an interest in being a doctor. I told him to forget about that silly idea. The ROI is going to be horrible in a few years.

  23. To liberals and Beltway insiders, the Constitution is an irrelevant inconvenience compared to “practical” expediency. And to liberal elites, the harm done to the public by their policies is relevant only to the extent that it can be used to justify maintaining their polices. The regime’s spiteful behavior regarding both the Sequester and the 2013 “shutdown” clearly demonstrated that they never have meant well.

  24. Has a version of this been submitted as a amicus brief yet? Someone who’s a lawyer please check and if not do so!

  25. Peter Suderman is exactly correct in a manner but is not quite founded solidly in law. It is clear the subsidies are legal only for the 12 States that complied with the (ACA) law. The other 36 States will get no subsidies if this were a nation enforcing the honorable rule of law only as written.

    The long-honored legal doctrine of collateral estoppel is what the Administration honorably seeks to encourage and SHOULD obviously receive. The aging SCOTUS oligarchy and oligarchs throughout the broken Article III oligarchy will once again rule by honorable “fiat” rather than written laws and say the intentions of the (ACA) law were clear enough to create promissory estoppel liability for the United States if the subsidies are not given to the 32 disobedient States. SCOTUS honoring the letter of the law despite the promises made would cause the United States as a country to violate the time honored doctrine of collateral estoppel that existed long before the U.S.
    Revolution. http://legal-dictionary.thefre…..y+Estoppel

    Mr Suderman, this warrants a rewrite or a follow up especially for a “senior” editor. How old must an editor be to take senior status…Ha


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