Obamacare Could Still Crash in Supreme Court

The Supreme Court announced that it would review and determine the legality of a key Obamacare regulation, written by the IRS. 

Through this regulation the IRS empowered itself to give subsidies in the form of tax credits to people who buy ObamaCare health insurance policies from healthcare.gov, the federal government’s health insurance exchange.ObamaCare4

Back in July a three judge panel of the D.C. Court of Appeals ruled, in Halbig Vs Burwell, that the regulation from the IRS violates the letter of the law.   The court found that Obamacare or the Affordable Care Act (ACA) authorizes those tax credit subsidies to be issued only to customers of exchanges that are built and operated by states.

The Halbig ruling was an earthquake.  If upheld by the Supreme Court it means that roughly two-thirds of Americans, who live in the 36 states that did not set up their own exchanges, will be ineligible for subsidies. 

The law states that the individual mandate, the requirement that every person have health insurance is enforceable only if insurance is “affordable,” a word that is defined by the law.  But insurance that meets all the requirements of ACA is expensive and for most individuals it’s not “affordable” without the subsidies. Therefore if the Halbig ruling stands it renders the individual mandate unenforceable in 36 states.

Employer Mandate will also fall

ACA also imposes an employer mandate that is partially to blame for America’s continuing job market weakness.  Companies are required to provide pricey insurance if they have fifty or more full time employees.  The fine for not providing insurance is $2,000 per year per employee.  The event that triggers the fine is one or more of a company’s employees receiving a subsidy.  But if employees are not eligible for a subsidy because their state didn’t set up an exchange there is no trigger and the employer can not be fined.

Thus, if the Supreme Court agrees with the lower court, that subsidies can not be given through the federal exchange, BOTH the individual and employer mandates will become unenforceable in 36 states.

Obamacare defenders immediately attacked the Halbig ruling.  Typical was Vox.com’s Ezra Klein who  declared the Halbig decision “plainly ridiculous,” adding that “the point of Obamacare is to subsidize insurance…”  The New Republic pronounced it “absurd.”  On MSNBC’s Hard Ball with Chris Matthews,” Jonathan Gruber, MIT Professor, White House adviser and one of the principle architects of the ACA legislation bellowed:gruber

Chris, it is unambiguous this is a typo. Literally every single person involved in the crafting of this law has said that it’s a typo, that they had no intention of excluding the federal states.  And why would they?

Professor Gruber burst into the headlines recently when recordings of him surfaced.  He calls voters stupid and explains some of the deceptions in the law.  Stay with us to find out why Professor Gruber was forced to admit the “typo” story is absurd.

Most of the media went along with the typo story, without bothering to read, comprehend or explain the Court’s reasoning.  Once again Liberty Works steps in where the establishment media have failed.  Here’s how the court reached it’s conclusion

The court identified three relevant sections in the massive, 2,500 page Affordable Care Act (ACA):

  • ACA Section 1311 grants authority to the states to set up exchanges.  But the law does not require state exchanges.  Such a requirement would be Unconstitutional.
  • ACA Section 1321 grants the federal Department of Health and Human Services (HHS) the authority to set up a federal exchange for the residents of states that do not set up their own.
  • ACA section 1401 authorizes the IRS to grant subsidies called “Premium Assistance Coverage” in the form of tax credits to individuals of low to medium income.  Under the heading “Premium Assistance Coverage Amount”  section 1401 says:
The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of (A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer and which were enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act
The biased media quoted only the words “established by the state,” planting the perception that it’s the only relevant phrase in the entire 2,500 page law, that it appears only once, and therefore, that it could be a typo.  But that perception is wrong.  The underlined text above establishes TWO requirements an exchange must meet for its customers to be eligible for tax credit subsidies:
  1. It must established by the State – not federal government and,
  2. Must be established under section 1311, which authorizes only state exchanges.  Again, a separate section, 1321, authorizes the federal exchange.

The same two requirements appear again several paragraphs later under the definition of “coverage month:”

The term “coverage month” means…any month…the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act

Later on, the dual requirements are emphasized twice more in paragraphs that set forth ways to compute the tax credit subsidy.

Obviously, four deliberate repetitions of two requirements would rule out any possibility of a “typo.”

With the typo idea discredited the more sophisticated (or imaginative) ACA supporters have indicated they will shift to a different tactic.  They will ask that the court to disregard the text of the law and instead conjure “Congressional intent,” which they claim was to issue tax credits in the federal exchange. 

But seeking to discern “Congressional intent” is like chasing the wind and tends to make one even more cynical about Congress.  As courts have noted in previous rulings, passing a law requires the votes of hundreds of individual Representatives and Senators.  Individual Senators and Representatives who vote in favor of a bill have a wide range of intentions.  A YES vote can mean that the representative:

  • approves of a bill in its entirety, including in this case, restricting tax credits to customers in states that set up their own exchanges;
  • approves of only parts of a bill but is willing to compromise and accept other parts he/she doesn’t necessarily like. (Did she like or dislike restricting the subsidies to state exchanges?)
  • intends his vote only to please a lobbyist or pressure group whose support he values;
  • intends to exchange his vote for a promise from his party’s leadership, perhaps a desirable committee assignment or campaign finance help;
  • intends to exchange his vote for a subsidy or special consideration for an unrelated project or business interest back home.  This is usually a side deal, with the inducement tucked into a different bill.

In the case of Obamacare/ACA there was yet another reality because almost no Senator or Representative who voted YES had read or understood the bill:

  • intent to demonstrate loyalty to the President and the Democratic party by voting yes without reading the bill, based on utopian promises from the President. (Such as “If you like your insurance you can keep it, period,” or “the typical family will save $2,500 a year.”)

The Halbig transcript reveals that the government’s lawyers were unable to show the court a single word in the Congressional Record to support their claim that “Congressional intent” contradicts the plain language of the law.

ACA was written largely by Senate staffers and outside consultants including Professor Gruber (mentioned above).  It became law only after extraordinarily intense political arm-twisting and horse trading for votes.  Provisions were added hastily without due diligence.  Only through strenuous parliamentary maneuvering and rule bending by Democratic leaders was a Senate vote that would have killed the law avoided.  ACA passed the House by only seven votes, 219-212 with all Republicans and 35 Democrats voting NO.

Thus, “Congressional intent” is so elusive and intangible that to  mention it is an insult to the court.

Why does the law include the language quoted above that denies subsidies to customers of the federal exchange? 

The answer is found in the context of the Progressive ideology that drives President Obama and Congressional Democrats.

Because concentrations of political power are always abused by the elite, to the detriment of The People, the authors of the US Constitution brilliantly dispersed governing authority among the states while limiting the federal government to a few, specified, or “enumerated” powers.  Under the Constitution Congress may not require state legislatures to pass laws or create programs, such as an online health insurance exchange.

But the ideology and schemes of the leftis,t progressive movement cannot be implemented without concentrating power in the central government.  So progressives contrived a way around Constitutional checks and balances: Offering state governments financial incentives to comply with federal government programs.

The financial incentives are sometimes indirect but always a variation on the same idea: If a state submits to the will of Washington’s elite, the federal government will provide “free money” to the state and/or it’s citizens.

Tax credit subsidies to customers who buy insurance from a state exchange are the free money in ObamaCare that was supposed to ensure that all states obeyed and set up exchanges.  In fact the authors of Obamacare were so sure this financial incentive would coerce each and every state into setting up an exchange, they budgeted no funds to build a federal web site.  Thus, healthcare.gov got a late start, contributing to its disastrous rollout, because funds had to be scrounged from other programs.

Obamacare is a horrendously complex scheme with hundreds of interrelated functions, all made operational by regulations written by hordes of bureaucrats.  Complicated government schemes never turn out as promised and always generate undesirable results, usually called “unintended consequences” to deflect blame away from accountable politicians.

When IRS bureaucrats realized that most of the states would not build their own exchanges, even though subsidies would be denied, they wrote a regulation to grant subsidies through the federal exchange, contradicting the plain language of the law.  But in the Halbig case their regulation lost a court challenge. Now, the Supreme Court will rule.

Back to Professor Gruber’s claim quoted above, that the state exchange requirement is a typo.  A few days after the Halbig ruling, some enterprising reporters and bloggers  turned up YouTube recordings of remarks by Professor Gruber in 2012.  In those recordings here and here he states, unequivocally, that the intent of the law to deny tax credits to citizens of states that do not set up their own exchanges.

Only by contriving absurdly tortured arguments could the Supreme Court overcome what is actually written in the law, four times, and allow the IRS to empower itself to give tax credit subsidies to Healthcare.gov customers.

 

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