By the way, the D.C. Circuit might nuke ObamaCare tomorrow

posted at 8:21 pm on July 2, 2014 by Allahpundit

Remember the Halbig case? If not, catch up right now by re-reading this post from January, written after a D.C. district court judge ruled in Obama’s favor. O-Care is a famously complex law but the lawsuit that could end up demolishing it is surprisingly simple. In a nutshell, there’s a line buried deep in the statutory text that says federal subsidies for insurance premiums will be available to anyone who buys a plan on “an Exchange established by the State.” Question: Does Healthcare.gov, the exchange built by the federal government after 34 states refused to build their own exchanges, qualify as an “Exchange established by the State”? Or do only state exchanges qualify? If it’s the latter, then millions upon millions of people who’ve signed up for O-Care through Healthcare.gov since October in the expectation that Uncle Sam will be paying part of their bill are in for a nasty surprise. The only fix that’s available (unless His Majesty tries some executive gambit, of course) is for Congress to amend the statute so that subsidies are available on the federal exchange too, but what are the odds of the House GOP agreeing to that? If the D.C. Circuit, which is set to rule any day now on the appeal of the earlier ruling, sides with the challengers against O, consumers will be forced to either come up with the money for their premiums themselves or drop their coverage. And if most of them choose to drop coverage, leading to a mass exodus of healthy people from various insurance risk pools, suddenly the White House is facing a death-spiral problem where hiking premiums on the remaining enrollees is the only way to pay for all the sick people still in the pool. That’ll lead to more dropped coverage, which means even higher premiums, and then it’s spiralmania.

It’s a magic bullet, aimed right at the heart of ObamaCare. What will the D.C. Circuit do? TPM wonders:

The challenge was initially written off by some as a fool’s errand because there’s a lack of evidence that the Democrats who crafted and passed the Affordable Care Act intended to block subsidies on the federal exchange, which was designed as a backstop on behalf of the states. (They’ve signed a brief saying as much.) But the challengers seized on an ambiguity in the language of the statute which says the subsidies are to be provided by “an Exchange established by the State.”

“If the legislation is just stupid, I don’t see that it’s up to the court to save it,” Judge A. Raymond Randolph said during oral arguments in March.

Randolph, a George H.W. Bush appointee, said the text of the statute “seems perfectly clear on its face” that the subsidies are confined to state-run exchanges. Carter-appointed Judge Harry T. Edwards slammed the challengers’ claims as “preposterous.” So the deciding vote appears to be with George W. Bush-appointed Judge Thomas B. Griffith, who wasn’t resolute but sounded unconvinced of the Obama administration’s defense, saying it had a “special burden” to show that the language “doesn’t mean what it appears to mean.”

In a way, this is an analog to Obama’s power grab on immigration, which he defends as necessary because Congress is paralyzed. Will the D.C. Circuit read the statute as it’s written and leave it to Congress to resolve the ambiguity over “state” exchanges or, knowing that Congress won’t do a thing to resolve it, will the court feel obliged to minimize disruption to America’s new insurance regime by interpreting the word “state” broadly? The lower court reasoned that the federal ObamaCare exchange isn’t really a “federal” exchange, it’s an amalgamation of 34 different state exchanges that the federal government established on behalf of each of those 34 states. In that sense, the federal exchange is a “state” exchange (or a group of state exchanges) and therefore its customers are eligible for subsidies. Law prof Jonathan Adler has led the charge in arguing the opposite, that the whole reason the statute was drafted the way it was is because Congress wanted to give states an extra incentive — namely, subsidies for its residents — to set up their own individual insurance exchanges. If a state refused to comply and forced the feds to set up an exchange on its behalf instead, its residents would be punished by having their eligibility for subsidies removed. (Adler wrote a thorough reply to the district court’s ruling for WaPo back in March.) The D.C. Circuit needs to choose between those two interpretations. And depending upon how they rule, SCOTUS may get a crack at it — which, per Jonathan Turley, is potentially also bad news for O-Care fans:

But the D.C. Circuit Court may see things quite differently, especially in light of recent Supreme Court opinions holding that the Obama administration has exceeded its authority and violated separation of powers.

In Michigan vs. Bay Mills Indian Community, for example, Justice Elena Kagan noted that “this court does not revise legislation … just because the text as written creates an apparent anomaly as to some subject it does not address.” In Utility Air Regulatory Group vs. EPA, Justice Antonin Scalia, writing for the majority, stressed that “an agency has no power to tailor legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.” And a third strike came last week in National Labor Relations Board vs. Canning, when the Supreme Court unanimously found that President Obama had violated the Constitution in circumventing Congress through his use of recess appointments…

Moreover, a ruling against the administration would mean that Obama has been responsible for ordering what could amount to billions of dollars to be paid from the federal Treasury without authority. And it would mean the administration has committed yet another violation of the separation of powers.

It’s impossible for me to believe that the Supremes generally and John Roberts specifically, having eaten boatloads of crap from the right for upholding ObamaCare on the challenge to the individual mandate, are now going to pull a “never mind” and torch the whole thing because of a drafting ambiguity, but hope springs eternal for separation-of-powers aficionados like Turley. So much for the legal angle to all this. Here’s the political angle: What happens if the D.C. Circuit does nuke the subsidies eligibility for federal-exchange consumers? Would the House GOP even consider a bill reinstating those subsidies in exchange for other concessions of some kind? Before you say “hell no,” bear in mind that there’ll be a lot of voters out there PO’d that they’ve just lost their sugar from Uncle Sam and a lot of Democrats whispering to them that they could have that sugar back if only the damned Republicans didn’t want to see them suffer. Plenty of hay could be made before the midterms. Phil Klein, who has more faith in Boehner and crew than me, thinks there’s no way House Republicans would dare cave on subsidies, certainly not before SCOTUS has ruled on this at least. Hopefully he’s right — emphasis on “hopefully.” But maybe it’s all moot: If the GOP held out and refused to reinstate the subsidies, His Majesty would be tempted to issue some sort of dubious executive order (say, right around November 1st) proclaiming that the subsidies will be reinstated under HHS’s authority. That might be illegal, but even if it is, what’s anyone going to do to stop him? And even if there is a way to stop him by suing him over it, how will that stop him in time to prevent him from reaping the benefits at the polls on election day? Gulp.


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I keep seeing everyone mention that if a “death spiral” happens then that means Obamacare is toast. Why? A federal program that oozes money never goes away. It just spends more money to hide the pain it inflicts on voters.

cptacek on July 3, 2014 at 10:24 AM

How many people had insurance that was cancelled and don’t have it now?

goatweed on July 3, 2014 at 10:32 AM

Business Insider: New York Healthcare Premiums Are About To Explode

Take it, NY. Take it right in the neck.

crrr6 on July 3, 2014 at 10:36 AM

This post is infuriating on so many levels. But in particular, the fact that most Americans are willing to throw away their freedom for a handful of beans as a payoff (forget that the beans ain’t magic and will disappear soon enough) is pretty pathetic and frightening. We know our elected officials are utterly corrupt and power mad. But if the citizenry cannot see that, then America really is finished, here and now.

Rixon on July 3, 2014 at 10:40 AM

And let’s not forget class, there is still the Origination Clause challenge waiting in the wings. Remember when John Roberts declared Obamacare is only constitutional because it is a tax? Well taxes must originate in the House of Representatives. Obamacare did not.

The ship gets leaker and leaker.

patches on July 3, 2014 at 11:13 AM

Roberts killed it in 2012. The mandated expansion of Medicaid that was contained in PlaceboCare and voided by SCOTUS, had Roberts followed precedent, would have caused the voiding of the entirety of PlaceboCare due to the lack of a severability clause.

Steve Eggleston on July 2, 2014 at 8:50 PM

That is a perfect explanation of how Roberts did not do the right a favor or punt the issue back to the voters but knifed us in the back. Thank you.

ezspirit on July 3, 2014 at 11:16 AM

Remember when John Roberts declared Obamacare is only constitutional because it is a tax? Well taxes must originate in the House of Representatives. Obamacare did not.

patches on July 3, 2014 at 11:13 AM

That just shows how absurd Roberts’ ruling was. It was nakedly political, not remotely based on legal precedent. It is also how Republicans can repeal Obamacare, if they grow a spine. Not holding my breath.

ezspirit on July 3, 2014 at 11:19 AM

It is my understanding that 85% of sign-ups are subsidized.

In other words, we are paying for their insurance.

Barred on July 2, 2014 at 10:27 PM

Correct. Obama made sure the mooch class was on board, so they would turn out to vote for him.

ezspirit on July 3, 2014 at 11:23 AM

Will Obamacare be repealed or won’t it? Will Congress fund it or won’t it? Will the web site be fixed or not? Blah, blah, blah. We the people just need to do what we need to do and Democrats be damned. Resist. Refuse. Revolt. EXEMPT OURSELVES! We did not comply with Prohibition and we simply should not comply with Obamacare. For religious reasons. For privacy reasons. For the cause of liberty and freedom and in protest of the idea that the federal government (under one party rule, no less), can force private citizens to purchase anything with our own money. Are we citizens or subjects? Mice or (wo)men? Just say NO to socialism and to the corrupt, unionized, far left IRS: the gestapo of America’s political class. Afraid of arrest? not to worry! After all, the federal government ignores millions of illegals who are breaking U.S. immigration law every day. Our Founders pledged their lives, their fortunes and their sacred honor. All we have to do is just say no to a scheme we all know is un-American and a violation of our most basic founding fundamentals of privacy, self reliance, limited government and individual freedom.
How To Opt Out Of Obamacare. Know your options and become savvy self-pay patients. Join a health care sharing ministry. These are voluntary, charitable membership organizations that agree to share medical bills among the membership. They function similar to insurance, and are probably the best alternative to conventional health insurance. There are four of them, at least that I know of. Three are open only to practicing Christians (Samaritan Ministries, Christian Healthcare Ministries, and Christian Care Ministry) while a fourth, Liberty HealthShare, is open to anyone who agrees with their ethical commitment to religious liberty. They operate entirely outside of Obamacare’s regulations, and typically offer benefits for about half the cost of similar health insurance. Members are also exempt from having to pay the tax for being uninsured. From the article by Sean Parnell http://thefederalist. com/2013/12/04/opt-obamacare/#.Up9MwGKiM_o.email

devan95 on July 3, 2014 at 11:23 AM

You have to pass the bill to find out who get scre….

J_Crater on July 3, 2014 at 11:25 AM

AP thinks too hard sometimes. If O Care gets shut down by the courts, America will celebrate. This law has been hated by America from day one. No one will be sad if it goes. Too bad there’s too much collusion in it between the court and Obummer.

bossmanham on July 3, 2014 at 11:31 AM

It’s the way the law was written, reviewed, debated, and passed.
 
rogerb on July 2, 2014 at 8:34 PM

 
What? This was debated? When? Where?
 
GWB on July 3, 2014 at 9:51 AM

 
Exactly. It’s not someone else’s fault the first black constitutional scholar professor president wasn’t capable of reading cursive.

rogerb on July 3, 2014 at 11:34 AM

When Care Oregon spent a quarter of a billion dollars and signed up zero people and went bankrupt, it was taken over by the feds. It’s hard to argue that The state of Oregon and the feds are one and the same.

jrgdds on July 3, 2014 at 11:35 AM

If the subsidies are eliminated, it will only accelerate what was intended from the beginning by <0bama, his cadres and handlers–the complete collapse of the private insurance funded medical system, to be replaced by 100% federalized control (aka "single [non] payer"). If the VA system looks really attractive to you, you'll love it when every problem and evil suddenly grows by multiple orders of magnitude.

Ay Uaxe on July 3, 2014 at 11:44 AM

Why would anyone think that the DC court would rule ageinst the emperor even if he has no closths after his chief court “jester” excuse me justice tried to cover him up?

georgeofthedesert on July 3, 2014 at 12:00 PM

Remember when John Roberts declared Obamacare is only constitutional because it is a tax? Well taxes must originate in the House of Representatives. Obamacare did not.

patches on July 3, 2014 at 11:13 AM

Unfortunately, it did – the Senate took a “nothing” bill which had been passed in the House, stripped it of everything except its number, then replaced it with the Obamacare wording.

Perfectly legal, but it tells you all you need to know about what a s*** sandwich this whole bill was from start to finish.

TeresainFortWorth on July 3, 2014 at 12:12 PM

I think this will fall into one of those ‘compelling interest’ areas, where the court will decide the law has to be read one way in order to allow the Obama administration to do what it wants to do.

I have always thought the ‘compelling interest’ reasoning is a seriously flawed legal argument which has been used to let the government do any unconstitutional thing they felt was good for the government, regardless of what it does to the rights of the people. It seems to be along the same logical lines as the traditional ‘Divine right of Kings’ argument European monarchs used to claim gave them the right to do as they pleased, no matter how contrary to the religion from which they claimed to derive that right.

The Nazi party had a ‘compelling interest’ in getting rid of European Jews in the 1930s. If such a party came to power in the US, would not the same reasoning in court allow them to rule that the ‘compelling interest’ of the government trumps the right to life of the people being targeted for extermination? It is a very extreme example I admit, but never say never.

s1im on July 3, 2014 at 12:19 PM

Exactly. It’s not someone else’s fault the first black constitutional scholar professor president wasn’t capable of reading cursive.

dude you bring it, that there is funny

“Can you read this for us?”
“Not all of it”
“Read what you can”
“Only my name”

DanMan on July 3, 2014 at 12:41 PM

It’s impossible for me to believe that the Supremes generally and John Roberts specifically, having eaten boatloads of crap from the right for upholding ObamaCare on the challenge to the individual mandate, are now going to pull a “never mind” and torch the whole thing because of a drafting ambiguity, but hope springs eternal for separation-of-powers aficionados like Turley.

I’m confused… WHEN as you believe it will happen, they uphold this… what does it mean legally?

‘No law means what it is written to say, and instead means what it was intended to be written to say, not the actual text.’ That’s a valid “Cliff Notes” summary of how they’ll have to decide to keep this, yes?

So knowing that ruling; the written word of any law is useless, having an opinion from the writer of the law is more valuable… correct?

Invalidating all laws based on written text and only “intent” matters won’t have repercussions?

I can see it going back to Congress “Amend it, because as written it doesn’t say what you intended” to avoid that pothole; but if they skip that part… what law IS going to be considered “SOLID” based on the text of the law and not some “intent”?

I think that chasm might cause more trouble than the pothole you’re swerving to avoid… unless there is a path I’m not seeing.

gekkobear on July 3, 2014 at 1:11 PM

The only fix that’s available (unless His Majesty tries some executive gambit, of course) is for Congress to amend the statute so that subsidies are available on the federal exchange too, but what are the odds of the House GOP agreeing to that?

Frankly, the odds are very high.

joe_doufu on July 3, 2014 at 1:11 PM

“Before you say “hell no,” bear in mind that there’ll be a lot of voters out there PO’d that they’ve just lost their sugar from Uncle Sam and a lot of Democrats whispering to them that they could have that sugar back if only the damned Republicans didn’t want to see them suffer.”

A lot of voters?

Maybe around 2-3 million scattered across half the country in red states without state exchanges would be cut off. Most Obamacare dependents were signed up in places like CA.

Given that the vast majority of these dependents signed up for the subsidies, I suspect most of them are not Republicans or leaners and many of them are not even registered to vote.

The real pressure to refill the pig trough will come from the Obamacare exchange insurers who will suffer even heavier losses from this fiasco.

Bart DePalma on July 3, 2014 at 1:43 PM

His Majesty would be tempted to issue some sort of dubious executive order (say, right around November 1st) proclaiming that the subsidies will be reinstated under HHS’s authority. That might be illegal, but even if it is, what’s anyone going to do to stop him? And even if there is a way to stop him by suing him over it, how will that stop him in time to prevent him from reaping the benefits at the polls on election day? Gulp.

1: Who can sue him? Any business in any one of those states, that doesn’t provide health insurance for its employees. The subsidies trigger a tax on those employers, no subsidies, no tax. That’s a “particular harm” which gives standing to sue.

2: If the DC Circuit rules any time soon, that will affect the rates that insurance companies will charge for the Exchanges. The electoral cost to the Democrats will be ~500 Republicans pounding on the rate hikes caused by ObamaCare.

3: Are the people getting subsidies mostly in Democrat districts? If so, who cares what they think?

Greg Q on July 3, 2014 at 1:45 PM

By the way, the D.C. Circuit might nuke ObamaCare tomorrow

Bombs away!

Dr. Charles G. Waugh on July 3, 2014 at 1:59 PM

Unfortunately, it did – the Senate took a “nothing” bill which had been passed in the House, stripped it of everything except its number, then replaced it with the Obamacare wording.

Perfectly legal, but it tells you all you need to know about what a s*** sandwich this whole bill was from start to finish.

TeresainFortWorth on July 3, 2014 at 12:12 PM

I agree however, there is this movement in the courts to go beyond the words of legislation and look at, wait for it, Intent. If they were to look one millimeter beyond “just the text”, they would have to recognize it for the shame it is.

WisRich on July 3, 2014 at 2:32 PM

sham, not shame. Well, both actually.

WisRich on July 3, 2014 at 2:35 PM

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