Affordable Care Act

  • July 24, 2014
    Guest Post

    by Abbe Gluck, Professor of Law, Yale Law School

    *This piece originally appeared at Balkinzation

    I had hoped to take a day off blogging about Halbig and King (the ObamaCare Subsidies cases), but I cannot allow another inaccurate narrative about ObamaCare to take hold. Over at Volokh, my friend Ilya Somin argues that the holding in Halbig is not absurd because Congress uses statutory schemes all the time that try to incentivize states to administer federal law (and to penalize them if they don't). It is true we see schemes like that all the time -- Medicaid is a prime example -- but the insurance exchange design is NOT one of them. This federalism argument was made before the D.C. Circuit and even Judge Griffith didn't buy it in his ruling for the challengers. I tried to dispel this myth back in March, when I wrote the following on Balkinization:

    “This is not a conditional spending program analogous to Medicaid.”
        
    The challengers' strategy in this round has been to contend that the subsidies are part of an overarching ACA "carrots and sticks" strategy to lure states into health reform and penalize them if they decline. On that version of the story, it might make sense that subsidies would be unavailable in states that do not run their own exchanges. In their view, the subsidies are therefore exactly like the ACA’s Medicaid provision (from appellants’ brief: “The ACA’s subsidy provision offered an analogous ‘deal’ to entice states to establish Exchanges – because Congress (wisely, in hindsight) knew it had to offer huge incentives for the states to assume responsibility for that logistically nightmarish and politically toxic task.”) 

    Putting aside the fact that no one thought the states wouldn’t want to run the exchanges themselves (indeed, Senators were demanding that option for their states), the exchange provisions simply do not work in the same way as Medicaid. Unlike the ACA’s Medicaid provisions, the exchange provisions have a federal fallback: Medicaid is use-it-or-lose-it; the exchanges are do-it, or the feds step in and do it for you. In other words, this isn’t Medicaid; it’s the Clean Air Act (CAA). If a state decides not to create its own implementation plan under the CAA, its citizens do not lose the benefit of the federal program -- the feds run it. The same goes for the ACA’s exchanges and so it would be nonsensical to deprive citizens in federal-exchange states of the subsidies. More importantly, if we are going to compare apples to oranges, the ACA’s Medicaid provisions have an explicit provision stating that if the state declines to participate, it loses the program funds (this was the provision at issue in NFIB v. Sebelius in 2012). The ACA’s subsidy provisions, in contrast, have no such provision, strong evidence that the subsidies were was not intended to be forfeited if the states did not participate. If the challengers are going to insist on strict textual arguments, this is exclusio unius 101: the rule of interpretation that provides that where Congress includes a specific provision in one part of the statute but does not include an analogous provision elsewhere, that omission is assumed intentional."
     
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    It may be true that the ACA’s politics have created a landscape no one ever predicted – one in which federalism-focused states, whose congressional representatives were demanding the states’ rights to establish exchanges instead of the federal government – have decided that politics is more important than federalism and opted out. But what’s happened in hindsight doesn’t change what happened when the statute was enacted and how the statute is actually designed. What happened when the statute was designed was that no one thought the states needed a carrot to do this and the statute was never designed as a "use or lose it" incentive, like Medicaid.

  • July 24, 2014

    by Ellery Weil

    At The Week, Andrew Cohen discusses Wednesday’s botched execution of Arizona inmate Joseph Wood, a “state-sponsored, judicially sanctioned human experiment that went terribly wrong.” For more on botched executions, ACS held a call this past May featuring Slate’s Dahlia Lithwick and Megan McCracken, Eighth Amendment Resource Counsel with the U.C. Berkeley School of Law's Death Penalty Clinic, to discuss the execution of Oklahoma inmate Clayton Lockett.

    Matt Ford of the Atlantic discusses the mass incarceration crisis, and its broader effects on the nation.

    Dominic Perella speculates on the probability that this week’s decisions in Halbig and King will result in the Affordable Care Act going back before the Supreme Court on msnbc.

    Writing for The Washington Post, Daniel Hertz explains the legacy of Milliken v. Bradley, and how 40 years later, its legacy continues to haunt our school systems.

  • July 23, 2014
    Guest Post

    by Timothy S. Jost, the Robert L. Willett Professor of Law, Washington and Lee University School of Law

    July 23, 2014 was a momentous day in the history of the Affordable Care Act. Shortly after 10 a.m., a three-judge panel of the District of Columbia Court of Appeals issued a split 2-1 decision striking down an Internal Revenue Service rule that permits federally facilitated exchanges to issue premium tax credits.  Two hours later, the Fourth Circuit Court of Appeals in Richmond released a unanimous decision upholding the IRS rule.

    The ACA authorizes the IRS to issue premium tax credits to uninsured lower and moderate income Americans through exchanges.  The ACA requests that the states establish exchanges, and sixteen states have done so.  The ACA also, however, authorizes the federal government to establish fallback exchanges in states that fail to set up their own exchanges, and it has done so in 34 states.  The IRS regulation allows premium tax credits to be awarded to eligible individuals by both state-operated exchanges and federally facilitated exchanges.

    Two subsections of the ACA, however, seem to provide that tax credits are available for months in which an individual is enrolled in a qualified health plan “through an Exchange established by the State under 1311” of the ACA. The plaintiffs argue that federal exchanges cannot issue premium tax credits tax credits to individuals who enroll through federal, as opposed to state-operated exchanges.

    The majority of the D.C. Circuit ruled for the plaintiffs, focusing narrowly on the “established by the State” language, but finding nothing in the ACA to clearly contradict the plaintiffs’ reading of the law. The Fourth Circuit found the law ambiguous, and thus under the Supreme Court’s Chevron rule, deferred to the IRS and its interpretation of the law.

  • July 23, 2014
    Guest Post

    by Nicole Huberfeld, H. Wendell Cherry Professor of Law, University of Kentucky College of Law

    The U.S. Court of Appeals for the D.C. Circuit held in Halbig v. Burwell that the IRS cannot provide tax credits to individuals who purchase private health insurance in states with federally-run insurance exchanges, potentially depriving millions of middle and low income Americans access to affordable health insurance. Improbably, while the blogosphere lit up, the U.S. Court of Appeals for the Fourth Circuit held in King v. Burwell that the IRS properly interpreted the Affordable Care Act (ACA) to provide tax credits in all exchanges whether run by a state or the federal government. Members of the Obama Administration immediately declared they will seek rehearing by the D.C. Circuit en banc. The standard of review for petitions for rehearing is rigorous, but given the importance of the case, and the new circuit split, rehearing is conceivable. Further, it is not unreasonable to anticipate that the Supreme Court ultimately will grant a petition for certiorari in either or both of these cases. If it is upheld, Halbig could be the most damaging decision in the ACA litigation wars yet. For those not mired in the details of the ACA and its ongoing legal challenges, here’s why.

    The ACA attempts to create near-universal insurance coverage by making Americans insurable and by commanding insurers to play by uniform rules. The ACA was created because, in 2008, one in five Americans did not have health insurance coverage. To make this number tangible, imagine everyone you know with blue eyes … and now imagine they do not have health insurance. That’s how many were uncovered, and the lack of coverage was just about that random too. In the United States, if you don’t have health insurance, you don’t have access to consistent healthcare. The ACA has clear goals, but it is a muddy scrum of legislative drafting that never underwent a conference committee process, and that imprecision has facilitated the litigation in these cases.

    To avoid adverse selection (the problem of free riding), the ACA requires Americans to carry minimum essential coverage or face a tax penalty (upheld in NFIB v. Sebelius); however, if insurance premiums would cost more than 8% of an individual’s income, then no tax penalty will be assessed. To facilitate health insurance coverage, the ACA created health insurance exchanges, also called marketplaces, where individuals and small groups can purchase health insurance that provides standardized benefits without exclusions for preexisting conditions and other disequalizing prohibitions. People who earn 100-400% of the federal poverty level are eligible for federal tax credits that assist in paying premiums for private insurance on the exchanges (“premium assistance tax credits,” codified at 26 U.S.C. § 36B), increasing substantially the number of people who can afford to purchase private health insurance. 

  • May 29, 2014
    Guest Post

    By Simon Lazarus, Senior Counsel at Constitutional Accountability Centerfrequent contributor to ACSblog, participant in ACS programs, and author of two ACS Issue Briefs on the legal challenges to the Affordable Care Act. Those Issue Briefs are available here and here.

    *This piece is cross-posted on Constitutional Accountability Center's blog

    Media battalions daily eye-ball every spike and dip in the Affordable Care Act’s implementation odyssey. On May 14, however, nearly to a person, they passed up a noteworthy event: a Fourth Circuit Court of Appeals hearing in Richmond, Virginia, involving one of a phalanx of Koch-backed lawsuits, that could, if successful, in the exuberant vernacular of columnist George Will, “blow [the ACA] to smithereens.” Much has been written about these cases, by ourselves and others, since conservative uber-litigator Michael Carvin filed in the District Court for the District of Columbia a complaint identical to the (subsequent) one at issue in the recent Fourth Circuit appeal. (Two other similar challenges are percolating in Federal district (trial) courts in Oklahoma and Indiana.) But, unnoticed by the press, in this recent hearing, high-voltage verbal duels broke new ground.

    Visibly animated, two of the three judges on the Fourth Circuit panel not only skewered the legal basis for the lawsuit—as had the two federal trial judges who earlier this year dismissed the claim (in the case now before the Fourth Circuit appeals court and the earlier-filed D.C. case). They questioned, as a matter of political and social injustice, Carvin and his backers’ desperation attempt to upend the ACA. In particular, Judge Andre Davis fired off one of the most telling sound-bites yet articulated by the law’s defenders over the course of this litigation. “You are asking us,” Judge Davis capped off an especially testy exchange near the end of the session, “to kick millions of Americans off health insurance, just to save four people [Carvin’s four individual plaintiffs] a few dollars.”  Davis had earlier foreshadowed that zinger, interrupting Carvin soon after he launched his argument, to chide him for bringing his case on behalf of four lone individuals instead of as a class action on behalf of all similarly reluctant premium assistance beneficiaries; the judge suggested that in fact Carvin could never assemble such a broad class: “No one wants what you want,” he scolded.