Obama’s law professor: There’s a “very high risk” that a federal court is going to gut ObamaCare

posted at 6:41 pm on July 11, 2014 by Allahpundit

Via the Corner, a perfect note on which to end the week, not only as a palate cleanser after bumming you out with that impeachment post but because it’s quite likely we’ll have a ruling from the D.C. Circuit next week on the case. Prepare accordingly.

Don’t read any further, though, if you haven’t read this post already as background. The issue, remember, is one line in the ObamaCare statute that says subsidies shall be available only to consumers who buy their new health insurance on “an Exchange established by the State.” Thirty-four states refused to build their own exchanges, so the federal government went ahead and built Healthcare.gov for people in those states as a substitute. Question: Is that “an Exchange established by the State”? If not, a lot of people who were counting on subsidies to help pay for their insurance are about to have the rug pulled out from under them. Right, Laurence Tribe?

Harvard legal scholar Laurence H. Tribe warned Tuesday of a “very high risk” that a crucial aspect of Obamacare – its government subsidies provision – could fall victim to a major legal challenge being mounted by conservatives. That is why, he also said, that the Supreme Court will almost certainly get “a second bite of the apple” in determining the fate of President Obama’s signature health law, with uncertain consequences…

Tribe, whose new book, Uncertain Justice, takes a deep dive into the Roberts court, said the plaintiffs make a strong argument. The legislative language is clear, he said, that the subsidies apply to exchanges established by states. Yet in drafting the law, Tribe said the administration “assumed that state exchanges would be the norm and federal exchanges would be a marginal, fallback position” – though it didn’t work out that way for a plethora of legal, administrative and political reasons.

“You could argue that as long as a state triggers it by asking the federal government to come in [and establish insurance exchanges] that it’s a state-established exchange, even though it’s a federally run exchange,” Tribe added. That might give some of the justices who aren’t strict constructionists some leeway in looking beyond the law’s specific language, he said.

“I don’t have a crystal ball,” Tribe said, “but I wouldn’t bet the family farm on this coming out in a way that preserves ObamaCare.” “I would!”, says law prof (and O-Care supporter) Timothy Jost. Healthcare.gov is merely a conglomerate of individual state exchanges, he argues. The feds established each of those exchanges on behalf of a state, which is close enough to the language in the statute to survive judicial scrutiny.

The Affordable Care Act was meant to “provide affordable . . . coverage choices for all Americans.” A key section says, “Each state shall . . . establish an . . . Exchange,” but another section provides that if a state “elects” not to establish the “required Exchange,” the secretary of health and human services must “establish and operate such Exchange.” These sections both require states to establish exchanges and allow them not to do so.

Congress gave the IRS the responsibility to resolve such contradictions, and the IRS adopted the only reasonable approach. If a state does not create the “required Exchange,” HHS steps into its shoes and sets up “such Exchange.” The law, in other words, requires the federal government to create the “Exchange established by the state,” with the same authorities and responsibilities as state exchanges, including offering premium tax credits…

ACA opponents, however, hope that the other two judges on the D.C. Circuit panel, both Republican appointees, will share enough of their Obamacare phobia to detonate the imaginary bomb. If that happens, their success will be short-lived. The U.S. Court of Appeals for the 4th Circuit seems poised to uphold the IRS rule in an identical challenge, and the entire D.C. Circuit is likely to reverse the three-judge panel if it issues such an outlier ruling. There is no secret bomb in the ACA, as the courts have told us and will tell us, and the imaginary bomb will not destroy the law.

It’d be weird to pass a law called the “Affordable Care Act,” Jost says, that disallows affordable coverage for tens of millions of people just because it was the feds who set up their state’s exchange instead of the state itself. For a reply to that, read Michael Cannon’s comments at the Corner. He and Jonathan Adler have spearheaded this suit, arguing all along that the reason subsidies were limited to true state exchanges was to create an incentive for each state government to build their exchange themselves rather than forcing the feds to do it. It’s not just a semantic distinction, in other words. Subsidies were supposed to be restricted to state exchanges for a reason.

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?


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Nothing Roberts cannot fix.

CW on July 11, 2014 at 6:45 PM

They won’t gut it over this.

Though I bet the democrats want them to. Just what they need to gin up support for November.

cozmo on July 11, 2014 at 6:48 PM

The sign said no concealed firearms, but my gun wasn’t concealed since I was just hiding it from view of the other patrons and not actually concealing it.

rogerb on July 11, 2014 at 6:48 PM

If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?

Eh…there are 29 Republican governors.

Unless of course 5 of the 6 governors of those mythical states that Obama added to the union are GOP.

The700Level on July 11, 2014 at 6:49 PM

Hmmm.

22044 on July 11, 2014 at 6:50 PM

I know my pistol is illegal to carry in Illinois, but if I spell Illinois F-L-O-R-I-D-A then I can carry it in Illinois.

rogerb on July 11, 2014 at 6:50 PM

The Dems purposely worded the law as is to encourage states to build their own exchanges. Yes, the Dems were surprised that so many states didn’t build exchanges. But the fact is that law is worded in a specific way, on purpose. The law needs to be followed, or amended.

Or best of all, the whole Obamacare “experiment” should be scrapped, and future health care initiatives need to have broad bi-partisan support. Not a single Republican voted for Obamacare. And so we don’t have the people behind its implementation.

anotherJoe on July 11, 2014 at 6:51 PM

Eh…there are 29 Republican governors.

Unless of course 5 of the 6 governors of those mythical states that Obama added to the union are GOP.

The700Level on July 11, 2014 at 6:49 PM

Some of those states must have Democrats as governor. I think one or more Republican governors had a state exchange “built” as well.

22044 on July 11, 2014 at 6:52 PM

Nothing Roberts cannot fix.

CW on July 11, 2014 at 6:45 PM

Yep; his first rewrite of the piece-of-crap Obamacare set the precedent.

slickwillie2001 on July 11, 2014 at 6:53 PM

I dunno. This stuff is like the opposite of Rothman’s “ZOMG THIS POLL SAYS ALL REPUBLICANS WANT AMNESTY”.

Jedditelol on July 11, 2014 at 6:56 PM

This havaaahrd guy was on MSNbC this week explaining away Obama’s ineptness as a result of him seeing too many “sides” of issues leading to paralysis. 3dimensional chess and all that crap.

can_con on July 11, 2014 at 6:57 PM

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?


From WHOM, AP?

Do you attend ANY town halls, talk to regular people outside of D.C./N.Y.C. to develop what you say?

Or do you just listen to your Twitter/FB/Circle of Friends?

I posted this last night:

My Congresscritter held a tele-conference town hall tonight.

The TWO main take-aways:

1. 80% of participants voted AGAINST Obama’s $ 3.7 billion shakedown tactic to fix the problem. Special note: Two African-American participants made VERY clear they don’t want these “illegal immigrants” allowed into the country.

2. Nobody, but N O B O D Y spoke up defending Obama on anything. That’s NEVER happened before. A number of early questioners asked about the lawsuit along the lines of “that won’t accomplish anything”. When people raised impeachment questions – NO ONE followed up with any objections or any “it would be suicide for the Republicans” nonsense.

My TWO observations:

1. The immigration crisis is playing out STRONGLY against Obama and the amnesty supporters.

2. I am coming around to the viewpoint that a fair number of the Hot Air commenters “concern trolling” regarding impeachment are PAID GOPe shillswhich would be perfectly in line with the Mississippi “Win by Any Means” tactics.

PolAgnostic on July 11, 2014 at 6:57 PM

Every once in a while we get a bone but in the end the SCOTUS is statist.

CW on July 11, 2014 at 6:58 PM

And can anyone remember another group of legislators so pissed that people would adhere to the law they wrote?

rogerb on July 11, 2014 at 6:59 PM

Cannon and Adler are right. That was the intent of the law.

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?

That depends. Under the law, exchanges established by the state have to be self-supporting as of 2015. If that stands, then I’d say Repub Govs have a reason to draw this out even longer.

lineholder on July 11, 2014 at 7:02 PM

wrote?

rogerb on July 11, 2014 at 6:59 PM

If only they read it first.
/

CW on July 11, 2014 at 7:05 PM

I’m betting a lot of Demos would LOVE to see SCOTUS rip a big hole in BarryCare.

That way, all they have to defend is the Children’s Crusade, IRS, NSA, VA, unemployment, creeping inflation, Russian aggression and a resurgent War on Terror in November.

No sweat, right?

formwiz on July 11, 2014 at 7:05 PM

I can’t say I respect the Supreme Court Roberts wants a good legacy and Kennedy uses emotional not logical justifications on homosexual marriage.

sorrowen on July 11, 2014 at 7:05 PM

PolAgnostic on July 11, 2014 at 6:57 PM

OT, but have you seen this?

lineholder on July 11, 2014 at 7:05 PM

Everyone knows that the unAffordable Care Act is just one f’ing mess.

SC.Charlie on July 11, 2014 at 7:07 PM

Oh, and I know the divorce papers agreed that she would get the house, but that was actually just how we spelled 1989 Chevy Cavalier.
 
Thanks for understanding.

rogerb on July 11, 2014 at 7:09 PM

I”m pretty sure our exchange in Illinois is a federally run one (my daughter has O’Care) and we had idiot Quinn for a governor.

lizzieillinois on July 11, 2014 at 7:15 PM

The law needs to be followed, or amended.

anotherJoe on July 11, 2014 at 6:51 PM

Hardy-har-haaaaaaarrrrr! Where do you think you are? America? Get real.

HiJack on July 11, 2014 at 7:15 PM

I got news for you people. The Constitution is DEAD, and it’s been DEAD for a long, long time. And just because the Supreme Court delivers rulings, based on the individual judges’ ideology I might add, doesn’t change that fact. And if you think we live in a free country, the let me ask you: are you afraid of the IRS? Case. Closed.

HiJack on July 11, 2014 at 7:18 PM

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?

I’d be more excited about Tribe’s comments if he wasn’t peddling his new book and needs to say stuff that gets him noticed.

I don’t think the SCOTUS is looking to fix the bad ruling they made when they allowed the same lawyer for the rat-eared bastard to argue that Obamacare was a tax on a Tuesday and that it wasn’t the next day. But I also don’t think that there will suddenly be a whole lot of interest in creating new state exchanges in the majority of states either.

Happy Nomad on July 11, 2014 at 7:21 PM

If any semblance of this once great Republic survives, the name of Benedict Arnold will be but a mere footnote of history — his name having been replaced by the new slur “John Roberts” as the ultimate in American treachery (only because he appeared, at first, to be an actual patriot — unlike the lifelong American hater and DogEater) …

ShainS on July 11, 2014 at 7:23 PM

PolAgnostic on July 11, 2014 at 6:57 PM

I think you’re right about that. Everyone I know wants him impeached and in prison. Holder too. People are really angry about Iraq the IRS the border and several other scandals.

King putt is imploding the dems. And they make it worse when they say the border is secure and there’s no problem down there. YOW!

dogsoldier on July 11, 2014 at 7:23 PM

Ok, so the law makes a distinction: only those states that established an exchange get the subsidy. So, if all the exchanges are necessarily established by the states, then why put in any language at all about this? I fear that asking the Courts to abide by simple logic may be asking too much.

Occupied Territory on July 11, 2014 at 7:25 PM

Justice Roberts will save Obama and keep Obamacare alive. The only question is what creative argument he’ll use.

MaxBC on July 11, 2014 at 7:30 PM

There are several states like Oregon and Massachusetts that attempted to set up their own exchanges, but because of massive FAIL now have had to go to federal exchanges. It will be interesting to see who the voters in those states will blame if Halbig gets determined to say no subsidies. Headache thy name is ObamaCare.

txmomof6 on July 11, 2014 at 7:36 PM

The exchange in Minnesota is a failure. Of course the democrats here were in charge.

crosshugger on July 11, 2014 at 7:40 PM

Yeah, I know we used the word “state,” but whatevs, we also used the word “mandate” and never once mentioned “tax,” but whatevs, and we also promised you could keep your plan, but whatevs, and we also promised you could keep your doctor, but whatevs, and we also promised it would lower premiums by $2500, but whatevs, and we also promised it wouldn’t cover abortions, but whatevs.

We too cool for skool.

John the Libertarian on July 11, 2014 at 7:42 PM

Justice Roberts will save Obama and keep Obamacare alive. The only question is what creative argument he’ll use.

MaxBC on July 11, 2014 at 7:30 PM

And what creative pressure the NSA puts on him.

John the Libertarian on July 11, 2014 at 7:44 PM

I think dingy dirty hairy reid would have a heart attack along with palousi!
OH JOY!!!!

Bambi on July 11, 2014 at 7:50 PM

It all depends on what your definition of ‘state’ is, eh comrades?

Tard on July 11, 2014 at 7:51 PM

IIRC, one of the reasons, back when this was being debated that they used this language, was that the Senate Finance committee thought that by excluding subsidies from states that went alone, they would force the states to accept the Medicaid funding provisions. Justice Kagan said it in oral argument that NO Way would a state want to pass up that much money. Justice Breyer went along with the argument that forcing a state to accept the scheme of Medicaid expansion under ObamaCare was unconstitutional coercion. Thus, states were free to say no and they did. Congress and the administration never thought that the courts would rule the way they did so now they are stuck with language that they put in the law. They tried to work around it with regulations after the fact, but that is of lesser weight than congressional intent in statutory interpretation.

txmomof6 on July 11, 2014 at 7:51 PM

OT, but have you seen this?

lineholder on July 11, 2014 at 7:05 PM

Bump.

This is an important article, and deserves its own thread on HA.

Heh. What am I saying?? Never mind…

bofh on July 11, 2014 at 7:52 PM

We all thought the “mandate” was unconstitutional, but even with smart people on our side, it did not go before the court in a way that didn’t still end up Weasely.

The thing with the Supremes is what you ask and how you ask it, a lot like playing “Mother May I” and finding the right strand for your question is beyond imagining.

I am sure I will be disappointed with this State Exchange question too, because if someone is in a mood for not being literal that day, oh well. It’s bel canto, or else what mood are we in today?

Everyone knows there is so much wrong with the ACA, it’s out of control. And they have spent so much money on it, and it is a sin how much has been wasted and without anyone even seeing a doctor.

Fleuries on July 11, 2014 at 8:04 PM

OT, but have you seen this?

lineholder on July 11, 2014 at 7:05 PM

.
No, I had not. Thank you for posting it. I’ve saved the link for an appropriate post.

Bump.

This is an important article, and deserves its own thread on HA.

Heh. What am I saying?? Never mind…

bofh on July 11, 2014 at 7:52 PM

.
Agreed …. but my attitude is, “Let not the swift wait for the slow.”

PolAgnostic on July 11, 2014 at 8:25 PM

I will not play Charlie Brown.

It stands.

jukin3 on July 11, 2014 at 8:27 PM

What would be interesting is if the DC Circuit strikes down the subsidies and the Supremes do nothing, just let it stand.

That would be the signal for the lower courts to start winging it. You want Obamacare chaos, then that would be it. That first bite of the apple nearly poisoned them, so why not let that poison soak out into the thing itself? Get enough crossing decisions and the law becomes one that can no longer be implemented as it will be tied in knots. Obamacare got one chance to stay on life support and got it. It is unlikely to get a second one.

ajacksonian on July 11, 2014 at 8:44 PM

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?

That would take more than 2-1/2 years.

BKeyser on July 11, 2014 at 8:57 PM

He and Jonathan Adler have spearheaded this suit, arguing all along that the reason subsidies were limited to true state exchanges was to create an incentive for each state government to build their exchange themselves rather than forcing the feds to do it. It’s not just a semantic distinction, in other words. Subsidies were supposed to be restricted to state exchanges for a reason.

Don’t forget the Medicaid penalty that SCOTUS declared unconstitutional when Roberts decided everything in the universe is a tax. The carrot was far less important in this law. They were counting on the stick forcing state created exchanges. They specifically established that the subsidies would come through the state exchanges only because they thought every state would be forced to create an exchange through that stick. But remove the stick, which SCOTUS did, and the entire criminal enterprise fell apart. So the criminal organization, known as the Obama administration, invents language that does not exist in ObamaCare.

NotCoach on July 11, 2014 at 9:03 PM

The Supreme Court’s polling went up after their Harris and Hobby Lobby rulings went against the administration. Knocking down Obamacare could really boost them.

KW64 on July 11, 2014 at 9:10 PM

Nothing Roberts cannot fix.

CW on July 11, 2014 at 6:45 PM

+++++++++++++++++++++++++++++++

Let me fix that for you – “Nothing Roberts cannot ‘fix’ ”

(IYKWIMAITYD)

fabrexe on July 11, 2014 at 9:10 PM

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?

Nah. Those governors didn’t catch all that much grief when they chose NOT to build their own individual state-run exchanges. If anything, IF the subsidies get struck down in court because of those choices, there will be greater pressure to ashcan the whole hated law.

I can’t wait until lawsuits start on the required insurance mandates…

Newtie and the Beauty on July 11, 2014 at 9:44 PM

although i don’t like Obamacare I don’t believe the court will strike this down-’semantics’ can be argued

gerrym51 on July 11, 2014 at 9:49 PM

Come on this is the Roberts court. Just another kangaroo Obama court. Roberts will find a way to make it legal just like he did before. I hope but doubt, that the Republicans learned something about passing laws. Always make it a tax bill and claim it is part of The Commerce Department and you can then make people eat crap broccoli if you want by just taxing them to death if they don’t!!!

pwb on July 11, 2014 at 10:20 PM

Did Allah read any, ANY, of the Obamacares posts MK Ham did. They are as good a guide to the madness the exchanges have become as you will find.(Come on big A, Mary won a award for her work.)

flackcatcher on July 11, 2014 at 10:25 PM

Hope springs eternal. I think the judges are being paid off to keep this dog alive.

COgirl on July 11, 2014 at 10:27 PM

When will, if ever again, will laws be enforced as enacted, not as current mood demands?

Techster64 on July 11, 2014 at 10:32 PM

Next week huh? Zowie! I better lay in some more popcorn, because this is going to be good. I can hardly wait to find out if the Americans win,

…or the United Statists do…

flyovermark on July 11, 2014 at 10:33 PM

All of this presupposes that we are still a nation of laws. It’s still true of course, as it applies to those laws created to control the masses but as far as the government goes, well, not so much and that is the real problem.

Dan_NV on July 11, 2014 at 10:49 PM

“The State” is also the federal government, at least that is the ruling I fear will come down.

Meanwhile, Mitch the turtle is too busy exchanging food stamps for votes and Johnny ” hiccup ” Boehner is on a years long bender.

Exninja on July 12, 2014 at 1:11 AM

The problem for the statists is that this was actually discussed and was part of the deal. Ruling otherwise puts the judiciary into “white is black, up is down, right is wrong and wrong is right” territory.

cthulhu on July 12, 2014 at 2:25 AM

The record shows this was the intent of Congress, thinking it would force states to set up exchanges on their own.

The act also specifically defines what it means by “states” as “the 50 states and the District of Columbia.”

No amendment has ever been offered by the congressional sponsors, either.

Adjoran on July 12, 2014 at 2:33 AM

Those pictures of Roberts in drag or whatever are still in Choom Boy’s desk drawer. This is going nowhere.

bluesdoc70 on July 12, 2014 at 4:04 AM

Unless you give states printing presses to print Monopoly money. all of this is moot…

Pest on July 12, 2014 at 8:02 AM

Hell, here in Texas, a governor would not dare set up a state exchange unless he wishes to destroy his political future in this state.

WannabeAnglican on July 12, 2014 at 8:40 AM

“The feds established each of those exchanges on behalf of a state, which is close enough to the language in the statute to survive judicial scrutiny.” Close enough is for horse shoes, hand grenades and nuclear weapons, but under the law, not so. But I’m just a stupid citizen, what do I know.

amr on July 12, 2014 at 9:31 AM

If you read the comments at the Jost piece, several of the commenters pointed out that Jost himself suggested that the law would incentivize states to set up exchanges by only offering the subsidies there. Of course, he did this before it was clear the majority of states weren’t taking the bait and now he’s backpedaling.

Grammar Nazi on July 12, 2014 at 9:42 AM

Wait..wha?

That’s his signature achievement! He’ll be left with only ordering SEAL Team Six to off Bin Laden. The legs have been cut out from under his legacy!

socalcon on July 12, 2014 at 10:20 AM

A simple rationale: 1)A plain reading of the ACA is “state” means STATE, not the federal government. 2)Congress purposefully distinguished between state exchanges and the federal exchange in order to create incentives directed to the states. 3) If state action has become less than expected by Congress (i.e., the incentives didn’t work), the proper remedy is a legislative amendment to the ACA, not a contorted statutory construction by this court.

Such a reading leaves the ACA itself undisturbed, and once again (as against HHS in Hobby Lobby), only nullifies an executive agency (IRS) rule, not an act of Congress.

Barnestormer on July 12, 2014 at 2:34 PM

An intruiging argument, I’ll be curious to see who wins.

1) The law means what it says, and it written to say what it should mean. If you want it to mean something elsew, you must alter the law.

2) The law means what we want it to say NOT what it says, and the meaning can change on a whim without altering the clear wording of the law. The law does NOT mean what it says.

Sure the law “says” that robbing banks is wrong, but that doesn’t really apply… the underlying meaning of the law doesn’t oppose what I did and the simple text of the law has no bearing on what the actual law is… right?

Do we open up all laws for “they don’t mean what the text of the law says” or not?

Anarchy looks like a lot of fun… to heck with the boring “Rule of Law” we want anarchy now.

gekkobear on July 12, 2014 at 3:33 PM

In other words, the actual text of the law favors the right’s position. The left’s only chance is for a court and John Roberts to ignore it.

K. Hobbit on July 12, 2014 at 7:12 PM

Written law though it may be, there is something a bit unconstitutional about it. Besides they should be very ashamed about the extremely amateurish implementation.

Fat Hubie on July 13, 2014 at 11:52 AM

People forget that John Roberts in his Opinion on the mandate as tax, said how important it was not to mislead the American People, ie, call it what it is—a tax.

The Obama Administration to this day does not call it a tax. Further since the ruling the ‘Lie of the Year’ was revealed. Don’t think for a moment it didn’t reach the Chief Justice’s ears.

I hope it works out to reach a decision by SCOTUS or, perhaps even better, as ajacksonian suggested, SCOTUS decides to let it stand without a word.

MaggiePoo on July 13, 2014 at 2:59 PM

Another consideration not mentioned is the precedent that would be set by allowing subsidies to be issued from federal exchanges. For the individual mandate ruling we already have other mislabeled entitlements like social security that are really just a tax. To allow subsidies from federal exchanges would set the precedent for the IRS to continually omit qualifying adjectives and adverbs from the law and essentially become a dictatorship.

edrebber on July 14, 2014 at 1:06 AM