November 7, 2014

The Supreme Court just agreed to hear another Affordable Care Act case.

This is King v. Burwell, the case about "whether the program of tax credits applies only in the consumer marketplaces set up by sixteen states, and not at federally operated sites in thirty-four states." Announcing the decision on Friday afternoon was unusual, as Lyle Denniston explains at SCOTUSblog.
If it decides to limit the subsidies to the state-run “exchanges,” it is widely understood that that outcome would crash the ACA’s carefully balanced economic arrangements.... The fate of those subsidies apparently will now depend upon how the Court interprets four words in the Affordable Care Act. In setting up the subsidy scheme, Congress said it would apply to exchanges “established by the State.” The challengers to subsidies for those who shop for insurance on a federal exchanges have argued that those words limit the availability to the tax benefits solely to state-run exchanges....
AND: Also at SCOTUSblog, Nicholas Bagley: calls this granting of review "a significant setback for the Obama administration." The government had opposed review, noting the lack of a split in the circuit court decisions, but that's not what Bagley really finds "troubling," given the importance of the issue. He's bothered by the implication that at least 4 Justices — it take 4 votes to grant review — "think—or at least are inclined to think—that King was wrongly decided."

ADDED: This seems to be an occasion for dragging out that old and oft-quoted line: "th’ Supreme Coort follows th’ election returns."

67 comments:

RecChief said...

the subsidies for exchanges that Congress wanted the states to run? And explicitly said so? And touted this as the literal true meaning? on video? those subsidies and exchanges?

I Have Misplaced My Pants said...

Burn it down.

My ACA anecdote for today is that I work at a very small employer (doctor in private practice) and the doc and his wife's insurance, obtained through some small business/doc consortium thing, rose on Nov 1 from $670 a month to $1380 for the same coverage, plus an increase in deductible to $7500.

Ask whether I'm getting a Christmas bonus this year a raise next year. Or how much disposable income the doc and his family are going to put into the local economy.

Yaaaaaaay Obamacare!

Anonymous said...

I can't figure out why this has to go to the Supreme Court.

Isn't it obvious to everyone that the money was an incentive to get States to set up exchanges?

I understand that Obamacare won't work out otherwise, but that would require changing the law, wouldn't it?

This country wasn't meant to be run by Presidential Executive Decrees. Just because the President doesn't like the law, doesn't mean he can change it by decree.

This is the purpose of the courts, I would think. To put politicians in their place when they fail to follow the plain meaning of the law.

The discussion here doesn't seem to be, "What is the plain meaning of the law?"

It seems to be, "The plain meaning doesn't work, so shouldn't we be able to change it, in hindsight?"

tim in vermont said...

I guess we had to pass the law to find out what was in it.


My insurance through a small employer just jumped to $2,500 a month for a family of four for next year.

Good thing I am a 1 percenter and can afford it. I feel bad for those who can't, though.

Matthew Sablan said...

If "established by the state" turns out to mean "not necessarily established by the state," I'm going to have a field day finding other places where the law means the opposite.

Drago said...

The decision to hear this case by the Supremes must be quite upsetting to the loyalist subjects of His Royal Highness.

Ignorance is Bliss said...

The Bagley piece is titled The Court will hear King. That’s bad news for the ACA.

This is incorrect. It is good news for the ACA. It is bad news for the administration and those who wish to ignore the inconvenient parts of the ACA.

AustinRoth said...

I agree with those who are saying the only reason SCOTUS took this was to overturn King.

And if there are only 4 votes to overturn, I doubt they would have voted to take King on in the absence of a Circuit split.

Unless, of course, Roberts led his fellow conservatives down a primrose path and then decides a State is a tax or some such nonsense again.

Drago said...

Mathew, you know perfectly well words and their meanings become infinitely elastic under the creative interpretation theories of our leftist fellow citizens.

The Letter of the Law is inherently racist.

rehajm said...

it is widely understood that that outcome would crash the ACA’s carefully balanced economic arrangements

Widely understood. Carefully balanced.

Widely. Carefully.

rehajm said...

What happens to en banc?

Drago said...

As AustinRoth notes, I am completely convinced that Roberts will simply legalistically rewrite the Law for the administration despite ample video and audio proof that the federal govt had no intention to include the fed exchange as a "state exchange".

We are already well past the "lets just make it up as we go" point and we aren't going back.

Tim said...

pretty sure it is in the "Good and Plenty" clause cited by John Conyers, D-Idiot

tim in vermont said...

Crash it, force the president to the table to fix it with a Republican Congress, without Reid as a goalie to prevent any bills from getting a hearing. This should be good.

There are lots of things to be fixed.

Fernandinande said...

I predict that at least 44% of the judges will be wrong.

tim in vermont said...

Tort reform being high on the list. The Trial Lawyers have as much influence with the Republicans in Congress as Bill Clinton does with the Anti Sexual Harassment League... Oh wait.

deepelemblues said...

"it is widely understood that that outcome would crash the ACA’s carefully balanced economic arrangements

Widely understood. Carefully balanced.

Widely. Carefully."

Top Men, widely and carefully, were on the widening and carefulling. Top. Men.

Vox was on the understanding.

mccullough said...

So Obama and Reid's packing the DC Circuit has backfired on this one.

An issue of this importance should be decided by the Supreme Court, not the DC Circuit.

Original Mike said...

"What happens to en banc?"

This has been a bad week for Harry Reid. (tee hee)

garage mahal said...

Red states hit hardest?

garage mahal said...
This comment has been removed by the author.
John Tuffnell said...

Paul Clement has a voice mail message asking him to call the petitioners, immediately.

This should be good. The carrot becomes the stick.

John Tuffnell said...

Garage asks "Red states hit hardest?"

This is a good point. And it shows the law means exactly what it says. It was meant to coerce reluctant states to play ball.

Birkel said...

"garage mahal" is cute when he's stupid.

Peter said...

an increase in deductible to $7500.

Perhaps while the Court's busy reading the ACA, it'll discover that the intent really was that all ACA-complliant polcies have a deductible of zero.

It's hardly a secret that those who are too rich for Medicare but poor enough to get large ACA subsidies are going to be unwilling or unable to pay deductibles.

Which means healthcare providers are going to have to bill everything as "preventive" if they want to get paid.

MartyH said...

Any thoughts on how the Medicaid expansion ruling affects this? The SC struck down the provision where states lost all Medicaid funding if they refused the Medicaid expansion as too coercive.

Will the SC use similar logic? Rule that the law as written mandates subsidies on state run exchanges only. However, this is coercive, and so this provision is struck.

If so, we could go back to status quo ante. Obamacare opponents have a pointless victory while residents of 36 states still get their subsidies.

Big Mike said...

"th’ Supreme Coort follows th’ election returns."

Or "a switch in time saves nine."

khesanh0802 said...

Taking the case after the DC Circuit made its incorrect decision does seem rather a portent about which way SCOTUS is leaning.

BTW I am happy Garage is still with us. His absence after election night had me concerned about his safety. SAFETY not sanity; his sanity has always been a concern.

MartyH said...

And I should not say pointless victory. It will be a reinforcement of "There are very few cases I can ever think of where the Court has said the President can act contrary to a statute."

But Obamacare will not come crumbling down because of the decision in this case.

Tank said...

The perfect excuse for: "See, now we have to go to single payer."

Original Mike said...

"Will the SC use similar logic? Rule that the law as written mandates subsidies on state run exchanges only. However, this is coercive, and so this provision is struck. "

Well, I'm going to call you Deputy Downer.

garage mahal said...

His absence after election night had me concerned about his safety

Pardon me for not spending my evening with you all. Thank you for the concern though.

garage mahal said...

Will the SC use similar logic? Rule that the law as written mandates subsidies on state run exchanges only


Blue staters get to keep their subsidies while red staters have to pay, [or even pay back?] That would be something.

Goody said...

It's interesting that at the same time they granted cert on what facially looks to be a mundane issue under Federal Rule of Civil Procedure 4(m), but which involves the very same issue--whether appellate courts can ignore fairly clear language in favor of a perceived "intent". One hopes that is not the rule they took these cases to establish.

Birkel said...

Since "garage mahal" lives in a Red State, I wonder at his position. Bless his heart!

Todd said...

garage mahal said...
Will the SC use similar logic? Rule that the law as written mandates subsidies on state run exchanges only

Blue staters get to keep their subsidies while red staters have to pay, [or even pay back?] That would be something.
11/7/14, 2:54 PM


And it would be as it should be. Decisions SHOULD have consequences. If those states did not want to setup their own exchanges so much that they were willing to forgo Fed money to do it, fine. Their decisions should stand and there should be no money. If, in the future they change their minds and do setup their own exchanges AND there is no sunset on the subsidies, they would then be entitled to that money just like the other states.

That is as it should be. Why the gloating? It is the IRS that is trying to not follow the law as written.

Anonymous said...

If the federal website really works, can't they give a copy to the states and set them up at the state level?

I bet the fed version is not working. And the states don't want to be saddled with a piece of crap and lose further elections to keep it alive.

garage mahal said...

That is as it should be. Why the gloating?

Um, I'm not. Just wondering how it potentially shakes out.

AustinRoth said...

Mahal is wrong on the end result. If they were to rule as he describes, then the whole economics of participating in the exchanges AT ALL for the insurance companies collapse, and they leave the exchanges totally.

MartyH said...

"Blue staters get to keep their subsidies while red staters have to pay, [or even pay back?] That would be something."

Yes, that's exactly what the Democrats who wrote this law wanted.

Only their plot failed when the majority of states held firm and did not implement the exchanges as the Democrats who passed this law expected them too.

So the Democrats said, "Never mind" and "We really didn't mean it" and "It's a drafting error" and "How can you accuse us of trying to push states into Obamacare?" when they did the exact same thing with Medicaid expansion and were slapped down for it.

Anonymous said...

Also, I think the "individual mandate" and "employer mandate" only apply where the "State" has established an exchange. So this ruling could undo a lot more than the subsidy structure.

John Tuffnell said...

The insurance companies who currently participate on the exchanges would likely stay in the exchanges of those states that offer the subsidies.

They may or may not flee the exchanges in states that have the federal exchange with no subsidies.

MartyH asked about the effect of the Court's striking the Medicaid coercion in the first Obamacare decision.

The state exchange stick is different than the Medicaid stick. Unlike the Medicaid provision, the exchange provision has a federal fallback. Medicaid was expand or states lose ALL Medicaid funding. The exchanges provision demands the states create their own, or the feds step in and do it for them, with the consequence that the subsidies go away if the feds have to do it.

That Nancy Pelosi sure is prescient: we really did have to pass it to find out what's in it, and we're still finding out!

Todd said...

MartyH said...
Only their plot failed when the majority of states held firm and did not implement the exchanges as the Democrats who passed this law expected them too.

So the Democrats said, "Never mind" and "We really didn't mean it" and "It's a drafting error" and "How can you accuse us of trying to push states into Obamacare?" when they did the exact same thing with Medicaid expansion and were slapped down for it.
11/7/14, 3:40 PM

t-man said...
Also, I think the "individual mandate" and "employer mandate" only apply where the "State" has established an exchange. So this ruling could undo a lot more than the subsidy structure.
11/7/14, 3:41 PM


Yes, it does appear that the Dems were too smart by half on this one and I do hope as a minimum that the courts find that the IRS over-stepped. I also would not be too sad if that was the keystone that caused the rest to fall to rubble. Then we would have a chance to do real reform. Remove cross-state barriers. Remove federal minimum requirements. Implement cost disclosures. Enact universal HSAs. Tort limits. Things that will really reduce the costs and accessibility of health care.

tim in vermont said...

What’s important to remember politically about this is if you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this. - Jonathon Grubber

His Wikipedia Profile

His picture should also be featured next to "Too clever by half" in the dictionary of cliches.

tim in vermont said...

"I honestly don’t remember why I said that," he said, attempting to reconstruct what he might have been thinking at the time. "I was speaking off-the-cuff. It was just a mistake." - Gruber

If he doesn't remember why he said it, I guess we should just take the words as he spoke them. The contemporaneous words, the ones spoken at the time the issue was being discussed.

You know, the interpretation that Democrats like garage accept as a matter of course. It was a way to punish states.

MartyH said...

John-

Thanks for your reply. I thought the Medicaid issue was the size of the stick. The Federal government can beat states with a switch or a paddle but bats, clubs, or brass knuckles aren't allowed.

The subsidies seem like a pretty big deal-something like 80-90% of enrollees are getting them. Although, in absolute numbers, this ruling would strip maybe four million people of subsidies-certainly fewer than the five million who had their individual policies cancelled. And when people complained of losing their policies, Democrats seemed to think that five million broken eggs was an acceptable price to pay for the ACA omelet.

tim in vermont said...

If Landrieu loses, very likely IMHO, half the Senators who voted for Obamacare will be gone from the Senate. 16 replaced by Republicans who ran against Obamacare.

But don't worry, those insurance premiums and deductibles are not what the Democrats like to call "kitchen table issues." Nosiree.

tim in vermont said...

If the federal website really works, can't they give a copy to the states and set them up at the state level?


If all it were was a collection of HTML and GIFs, then sure. But no. It is huge and full of mountains of specific detail connections to other systems, etc, etc, etc.

John Tuffnell said...

Re: the size of the stick

This is what Roberts said: "Nothing in our opinion precludes Congress from offering funds under the Affordable Care Act to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding."

So I think it's the taking away that was the key to the Medicaid ruling. The exchange subsidy is a new way to help pay for the new requirements, if states want the help.

Anonymous said...

Entire law is unconstitutional on the basis it is a tax and taxes must originate in the House. Obamacare was first introduced in the Senate.

Anonymous said...

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."
 "The question is," said Alice, "whether you can make words mean so many different things."
 "The question is," said Humpty Dumpty, "which is to be master—that's all."

Anglelyne said...
This comment has been removed by the author.
Anonymous said...

Burn it all down. Not just Obamacare, but all of the cumbersome and burdensome insurance regulations that are nothing more than a barrier to free trade.

The invisible hand of the marketplace will easily assure everyone who wants health care can get health care, if only the damn government would get out of the way.

David said...

Mr. Dooley sighting!!

Danno said...
This comment has been removed by the author.
Anglelyne said...

Peter: It's hardly a secret that those who are too rich for Medicare but poor enough to get large ACA subsidies are going to be unwilling or unable to pay deductibles.

Win-win. Policies must be bought but these policy owners still can't afford to access medical care. All profit, no pay out!

To second I Have Misplaced's "burn it down": We have our family policy through MegaCorp employer - non-shocking increase in premium this year but...out-of-pocket maximum increased by 43%, deductible (drum-roll) just about tripled.

At least we can take the hit. How people at the median income or even higher can manage this, I do not know. Guess for them it's going to be: Buy health insurance, save for retirement, save to educate their children - choose one. (Oh, wait a minute, scratch that last one. How dare the younger members of the working poor and working middle even think about investing their resources in their own children!) And still face having to go into debt for medical care even if they shell out for a "good" insurance policy.

Danno said...

Todd said,
And it would be as it should be. Decisions SHOULD have consequences. If those states did not want to setup their own exchanges so much that they were willing to forgo Fed money to do it, fine. Their decisions should stand and there should be no money. If, in the future they change their minds and do setup their own exchanges AND there is no sunset on the subsidies, they would then be entitled to that money just like the other states.

That is as it should be. Why the gloating? It is the IRS that is trying to not follow the law as written.

This will also affect whether the mandates apply to the companies or individuals in a state, and possibly whether they can buy policies that do not include the mandated benefits that add to the price such as mental health, chemical dependency, birth control, maternity, pediatric dentistry, among other things, so it does matter.

n.n said...

The Europeans have stated that animals cannot offer implicit consent. Human beings, however, will register for Obamacare or be penalized for breathing. Well, at least survivors of planned parenthood.

It's amazing that with a multi-trillion dollar welfare economy, we have indigent, homeless, and unidentified Americans, who will still not have universal health care. And that's after aborting around two million unwanted American lives annually.

Zach said...

When people start trotting out the inevitable parade of horribles, remember that every single one of them could be solved by a change in statutory language.

Then real world consequences of this case are that the statutory language will either be altered by a permissive reading by the court or by a negotiation with Congress. In the first case, Obama doesn't have to give up anything in the negotiation; in the second case, he does.

Obama's strategy is to stay away from the negotiating table as long as he possibly can. But sooner or later, the law is going to need to be amended, updated, or modified to deal with implementation problems. He can only stay away from that table by making the kind of overreaching administrative rules that he has in fact been making.

If you're a member of the Supreme Court and you don't want to wade into separation of powers issues, a ruling on the statutory language is a minimalistic way to curb the administrative excess.

tim in vermont said...

madisonfella,

We are not the ones who ignored elections, ignored the polls, didn't read the bill, passed it without the normal debate and amendment, then retroactively awarded the president powers normally reserved to dictators to fix those shortcomings.

What this is going to do is force Obama to the table to make the fixes that should have been made in the first place.

Of course that would mean compromise with the majority of the American people who want it to change, so I can see why the prospect disgusts you.

tim in vermont said...

Had debate and amendment been allowed, this puerile little gotcha would have been removed.

Reid and Pelosi wouldn't allow debate, so here we are.

Michael K said...

" I am completely convinced that Roberts will simply legalistically rewrite the Law for the administration despite ample video and audio proof that the federal govt had no intention to include the fed exchange as a "state exchange". "

I fear this could happen. Roberts seems to be one who is too clever for hi8s own good.

Garage, red states don't want the damned thing. I know you cannot understand that.

Gahrie said...

The challengers to subsidies for those who shop for insurance on a federal exchanges have argued that those words limit the availability to the tax benefits solely to state-run exchanges....

I believe this was announced by Congressional leaders at the time the law was passed, only it was seen as a feature, not a bug at the time.

Harold said...

madisonfella said...
Entire law is unconstitutional on the basis it is a tax and taxes must originate in the House. Obamacare was first introduced in the Senate.

Yep, indeed. I said that way back when the law was first passed. And was called stupid for not understanding that it was perfectly OK to completely substitute the language in a bill and then pretend the bill originated in the other chamber.

To those of us who see things in black and white, that has the same validity as telling a cop after you're pulled over, "It's not really rum- I poured it into a Coca-Cola bottle. It's soda!"

Achilles said...

madisonfella said...
"Burn it all down. Not just Obamacare, but all of the cumbersome and burdensome insurance regulations that are nothing more than a barrier to free trade.

The invisible hand of the marketplace will easily assure everyone who wants health care can get health care, if only the damn government would get out of the way."

It wont be perfect. But it will do a lot better job than the government has done. The problem is the alternative. And the government has failed miserably.

I think it is time to give the people a chance. You had yours and you blew it.

Diogenes of Sinope said...

Democrats put the language “established by the State.” purposely to limit subsidies to only cooperating states. It was supposed to be an offer the states could not refuse. Democrats never dreamed most states would not set up exchanges. So, now since that threat did not work, Obama is changing the rules and going against the clear meaning and intent of the law.

Anonymous said...

MartyH asked... how this tied in with the ObamaCare Medicare ruling

This ties in quite well with the ruling. Roberts announced the rule that the Feds can offer the States new money to do things, but can't take away old money to force new behavior. (Note: this is easy to work around. You eliminate the old program. Then you create a new program, with new requirements.)

The ObamaCare subsides are new money, so the Feds are free to add whatever conditions they wish to the subsidies.

t-man said...

Also, I think the "individual mandate" and "employer mandate" only apply where the "State" has established an exchange. So this ruling could undo a lot more than the subsidy structure.

Close. The employer mandate only applies if at least one of the employees gets a subsidy for their health insurance. No subsidies, no employer mandate (just got to make sure you don't hire anyone who lives in a State with an Exchange).

The individual mandate still applies. But it only applies if you could buy an insurance policy that costs less than 8% of your income. Without the subsidies, a lot of people will over that limit, and so the IM won't apply to them.