Could a Republican president gut ObamaCare without action from Congress or the Supreme Court?
posted at 8:01 pm on July 23, 2014 by Allahpundit
Why not? If President Obama can declare without statutory support that the employer mandate won’t be enforced for a few years, why couldn’t President Cruz declare that the individual mandate won’t be enforced? Why couldn’t he promulgate a rule, a la Obama did last fall when his “if you like your plan” lie was exposed, that allowed insurers to revive pre-ObamaCare health plans that had been rendered illegal by the new law? Those plans would have lower premiums than ObamaCare exchange plans do, which would entice healthy customers to drop their O-Care coverage and sign up for an old plan instead. Result: Two separate risk pools, one for healthy people and one very unsustainable one composed mostly of the sick. Once the latter pool collapses, poof — no more ObamaCare. The law has survived through dubious unilateral executive action; it’s only fitting that dubious unilateral executive action brings it down.
That’s the quick and dirty solution. Patterico has a more elegant plan, one based on yesterday’s appellate court rulings. The Fourth Circuit, you’ll recall, held that the federal ObamaCare exchange (Healthcare.gov) does qualify as “an exchange established by the State” under the statute — not because Congress necessarily intended it to but because that’s how the IRS is interpreting the law. And under Supreme Court precedent, if an agency’s interpretation of a law is reasonable, courts are supposed to defer it. Patterico’s point is simple, then: Does that mean that if President Cruz’s IRS decided to interpret the rule differently, so that the federal exchange doesn’t qualify as “an exchange established by the State,” courts would be bound by that interpretation too?
The U.S. Supreme Court’s Chevron case that created “Chevron deference” said:
“The fact that the agency has from time to time changed its interpretation . . . does not . . . lead us to conclude that no deference should be accorded the agency’s interpretation of the statute. An initial agency interpretation is not instantly carved in stone. On the contrary, the agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.”
In other words: agencies can change their minds, and we will continue to defer to them.
So, applying the Fourth Circuit’s reasoning, an IRS under Obama can say that an exchange “established by the state” can mean “established by the federal government.” But an IRS under Ted Cruz, applying the classic formulation of Monty Python’s argument sketch, could say: “No it doesn’t.”
President Cruz’s IRS could pull the plug and there’s nothing that a divided Congress could do to stop him. But that assumes two things: (1) that the Supreme Court will follow the Fourth Circuit’s lead and allow courts to be guided by the IRS’s interpretation of the law, and (2) that the politics of ObamaCare circa 2017 would allow Cruz or any other Republican to cancel subsidies for federal exchange consumers en masse. Avik Roy, while celebrating the Halbig ruling as a victory for the rule of law, thinks it’s a speed bump for ObamaCare and little more:
In this context, Ezra Klein makes a relevant point. “By the time [the Supreme Court] even could rule on Halbig the law will have been in place for years. The Court simply isn’t going to rip insurance from tens of millions of people due to an uncharitable interpretation of congressional grammar.” Ezra unfairly derides the legal issues at play, and exaggerates the policy implications, but he asks the right political question.
Chief Justice Roberts, you may recall, was the justice who singlehandedly re-wrote Obamacare in order to justify the legality of the law’s individual mandate. He did so, it appears, because he was more worried about left-wing criticism of the Court than he was about constitutional precision. It’s hard to believe he wouldn’t act the same way here.
I agree. His ruling on the mandate was based on the Constitution whereas his ruling on the Halbig appeal would be based on a statute, which might encourage him to be bolder this time. But it’s hard to believe Roberts would have waved ObamaCare through when he had a shot to kill the law before it began only to blow it up five years later, after the country’s insurance system has been overhauled. Even the D.C. Circuit, despite having mustered the courage to rule as it did yesterday, said that it issued its ruling “reluctantly,” knowing that it would mean pulling the rug out from under millions of people who were counting on subsidies to reduce the cost of their new insurance. If the politics of undoing subsidies are that hot now, just nine months after ObamaCare went into effect, how much hotter will they be three years from now, when people have grown dependent on them? That was Ted Cruz’s whole point in pushing “defund,” in fact — that the law had to be stopped before it took effect because dependency would prevent it from being undone afterward. Does that mean President Cruz would refuse to instruct his IRS to interpret the law as Patterico suggests?
That’s not the only political deterrent for Republicans in canceling the subsidies later, in 2017 or beyond. Lefty Brian Beutler is right that Halbig is a win for ObamaCare opponents generally but a huge headache potentially for Republican governors. Most of the states that refused to build their own state exchanges are red states; their citizens are the ones who are buying most of the plans sold on the federal exchange, Healthcare.gov — which means it’s their citizens, by and large, who’ve now had their subsidies yanked away. Since Congress isn’t going to restore those subsidies, those O-Care customers are going to demand that their state governments fill the gap and build their own state exchanges instead. Someone like Scott Walker will thus be caught in a bind, pressured from the right by conservatives who don’t want him to validate ObamaCare by building an exchange and pressured from the left by O-Care customers (some of them Republicans) who want him to build an exchange so they can get their subsidies back. If President Cruz told his IRS to follow the Patterico approach, he’d essentially be punting this problem to Republican governors, some of whom could suffer politically from it. Would he do that, or would he stick with the subsidies to keep the heat off state-level Republicans? Maybe we’ll find out.
But let’s not think about that right now. Let’s enjoy a rare judicial rebuke to executive power.