The Washington Post:
Ouch! It’s been a tough day for Obamacare. A major pillar of the health-care law crumbled under the gavel of one federal appeals court on Tuesday, while a separate panel affirmed the legality of its billions of dollars in government subsidies. The three-judge panel of the D.C. Circuit Court of Appeals struck down premium subsidies used by 36 states, ruling that the Affordable Care Act doesn’t allow the IRS to dole out the subsidies in federal insurance exchanges, and that customers must pay out of pocket for the full insurance cost. The ruling is the result of a wording glitch in the ACA—as written, it says subsidies should be paid to those who purchase through an “exchange established by the state.” This restricts premium tax credits to state-run exchanges. Hours later, the Fourth Circuit Court of Appeals in Virginia upheld the subsidies saying the plaintiffs’ reading “bespeaks a deeply flawed effort to squeeze the proverbial elephant into the provebrial mousehole.”
N.Y. TIMES
The disagreement, called a circuit split, means that we are still a long way from any possible concrete actions. The cases will be appealed further, either for reconsideration by the appeals courts that issued the ruling, or go to the Supreme Court. The Obama administration will not reconsider its regulations, which interpreted the law to say that tax credits could be offered in every state, until the case is final. Because of the time involved, the approximately 5 million people in those states who have already signed up for insurance using the subsidies will almost certainly continue to receive them this year, although it is theoretically possible that they could be pulled back by the courts.
The Possible Reach of the Ruling
The D.C. Circuit’s decision has the potential to affect most enrollees in 36 states that use the federal insurance exchange.
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70 – 80% 80 – 90% 90%+ State-based exchange
Source: Kaiser Family Foundation
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It’s always hard to predict what this Supreme Court will do on major cases — few people predicted its decision in the big 2012 Affordable Care Act case — but it is clear that the court does not move quickly. This case is likely to be hung up in litigation for a year or more, even if it is appealed immediately.
Here are some possible next steps:
All the judges on the D.C. Circuit could decide the Halbig v. Burwell case. There is a process called “en banc” review in which the case would be reargued before all of the 11 judges on the D.C. Circuit Court, and the Obama administration has said it will ask the court for such a review. A majority of the judges would have to agree to rehear the case for it to be reconsidered in this way. Appellate courts rarely accept cases for en banc review, but this is a big one. Many legal experts think that the full court would view the government’s position more favorably than the two judges who ruled against them in the original decision on Tuesday; legal questions don’t necessarily break down along political lines, but Democratic appointees outnumber Republican appointees on the court and include four new judges recently appointed by President Obama.
The law’s challengers could ask the Fourth Circuit to reconsider King v. Burwell. Same rules apply, and the Fourth Circuit also has more judges appointed by Democrats than Republicans.
Decisions will be issued by other courts. The plaintiffs in the Virginia and D.C. cases are not the only ones challenging tax subsidies in the Affordable Care Act. Two trial court cases raise similar issues, one in Oklahoma and one in Indiana. Those cases could also go to appellate courts. Oklahoma is in the 10th Circuit; Indiana is in the 7th. Depending on the outcomes of the various rulings, all the courts could end up agreeing, or there could remain a disagreement between different circuits.
Either side — or both — could appeal the rulings to the Supreme Court. The Supreme Court can pick which cases it wants to hear; four judges must vote to take a case for it to be added to the court’s schedule. The Supreme Court generally rejects most petitions for a hearing but tends to intervene when circuit courts disagree about a substantive issue of law. The current disagreement between the D.C. and Fourth Circuits is a good example of the type of split that usually gets its attention.
The Supreme Court could decide the case. In addition to deciding whether tax subsidies can be used in states without their own exchanges, the court would face another question if it ruled in favor of the challengers: What happens to the tax credits that have already been handed out?
Congress could act. The legal question came up because of ambiguities in the drafting of the Affordable Care Act that made it unclear when tax subsidies should apply. If it was so inclined — a big if, in this polarized climate — Congress could fix the language and clarify who is eligible for the federal money.
States could act. Right now, 36 states are relying on the federal government to run at least parts of their insurance marketplaces, meaning that their residents could lose access to tax credits if the D.C. Circuit case is upheld. But any of those states could choose to switch to a state exchange, where the law is clear that the tax credits do apply. A few states are already working on switching from federal to state exchanges. Others might consider a similar shift, though the change would be difficult and potentially expensive.
MICHAEL TOMASKY, DAILY BEAST
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Alex Wong/Getty
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MICHAEL TOMASKY, DAILY BEAST
It’s truly extraordinary, the lengths modern conservatism will go to to ensure that more members of what Dickens called “the surplus population” will die. First, refuse to set up state-run exchanges, so that the poor and working-class people of your state who are desperate to buy subsidized health insurance have to go to the federal exchange. Next, after your own decision not to set up an exchange has made the existence of the federal exchange necessary, you scour the Affordable Care Act and find one sentence that left out one or two words that could enable you to discredit the federal exchange.
Then you sue, claiming that the federally facilitated exchange, which exists because legislators had to plan around what they knew would be your own inaction and hostility, is illegal! Then, you get a couple of aggressively activist judges to agree with you. All that’s needed now is for John Roberts to get back on the team, and the deed will be done: Millions of people will be at risk of losing their no-longer-subsidized insurance, or see their rates shoot up to levels they simply can’t afford. And some, or many, will surely die sooner than they would have. What a legacy.
It’s revolting beyond words. Actually, not really beyond words. I have few. Orwellian, Malthusian, barbarous, depraved…I think you get me. But will it work?
The Justice Department will request that Tuesday’s decision, by a three-judge panel of the D.C. Circuit, be heard en banc by the full panel. The full panel has seven judges appointed by Democrats and four named by Republicans. A. Raymond Randolph, the senior judge who sat on the three-member panel and who made his ideological contempt for the ACA crystal clear during oral arguments, can also participate if he wishes, as can Harry Edwards, another senior judge who dissented Tuesday. That makes for an 8-5 majority that will almost surely reverse the three-judge panel.
They will be doing so, by the way, not because of politics, but because of law. Brian Beutler explained it well in his New Republic piece. The long and short of it hinges on the question of whether the language in the ACA is “ambiguous” on the point of whether the federal government is allowed to operate an exchange. If it is ambiguous, that’s good enough to let the law stand.
What Randolph and Thomas Griffith, the other conservative judge who ruled with him, essentially did was to take one sentence of a law that runs to thousands of pages and play gotcha. What judges are supposed to do is look at statutory language in context and think about the drafters’ actual intent. But hey, don’t take it from me. Take it from a certain Supreme Court justice, who wrote in a decision just last month of the “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” That was Antonin Scalia.
But these were strange words, coming from Scalia. The context was his majority opinion in last month’s case about the EPA’s regulation of greenhouse gas emissions, which was a complicated and split verdict, albeit one that ultimately gave the EPA most of what it was asking for under the Clean Air Act. More typically, Scalia is a textualist. You can tell what that means, I’d wager, without me even explaining it, and in this case, it ain’t good: “I can’t read legislators’ minds. I can go only by the words in the bill. If they left out a word, they left out a word. Tough.”
In fact, there are other sections of the ACA, say several experts, that clearly at least imply the presence of or need for a federal exchange. And plain common sense tells you that Congress didn’t pass this huge and elephantine—and federal—law, whose very point was to enable more Americans to purchase health coverage, with the expectation that said coverage would be limited to the citizens who happen to live in some states but not others. It is facially, as they say in the law business, absurd.
But with this Supreme Court, who knows? Anthony Kennedy, the one we usually count on for a little decency, voted to dismantle the ACA the last time. John Roberts saved the day, in a backhanded sort of way. Roberts would have an opportunity to get his textualist ticket, revoked by conservatives after his decision to uphold Obamacare, re-stamped for life.
More than 5 million Americans have purchased subsidized insurance through the federal exchange. If the Supreme Court does its worst, these Americans will see their premiums increase by 76 percent, according to a study cited by Nathan Pippenger in his blog at the Democracy journal web site (I edit the journal, but not his blog). Clearly, many of those people will drop their coverage. So just as America has started down the road of joining every other advanced country in the world in trying to insure its whole population, here comes conservatism and the Republican Party to say: “No. We’re not like the rest of your so-called advanced world.”
If they succeed, their dismantling of the ACA will dwarf everything else that has happened in our era. The GOP will be known for years to come as the party that literally ripped security out of the hands of millions of people who so briefly and tenuously had it. They call themselves the “party of life.” And as with most of what they say, the opposite is the truth.