Affordable Care Act

  • 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.

  • November 7, 2013
    Guest Post
    by Leslie C. Griffin, William S. Boyd Professor of Law at UNLV Boyd School of Law
     
    Yet another appeals court has issued an opinion about a for-profit corporation’s challenge to the contraceptive mandate of the Affordable Care Act. The mandate requires employee health care plans to contain preventive care coverage that includes FDA-approved contraceptive methods and sterilization procedures. This time, the D.C. Circuit ruled in Gilardi v. HHS that the Gilardis, two Catholic brothers who own Freshway Foods and Freshway Logistics and oppose contraception, sterilization and abortion, are entitled to a preliminary injunction because they are likely to succeed on their claim that the mandate violates their free exercise rights as well as the Religious Freedom Restoration Act (RFRA), which prohibits the federal government from “substantially burden[ing] a person’s exercise of religion.” The D.C. Circuit’s action is consistent with the Tenth Circuit’s ruling that the arts-and-crafts chain Hobby Lobby demonstrated that the mandate substantially burdened its exercise of religion, but at odds with rulings against secular, for-profit companies and for the government by the Third and Sixth Circuits.
     
    One aspect of Gilardi is distinctive. Although the Third and Sixth Circuits, ruling for the government, decided that for-profit, secular corporations cannot exercise religion under either the Free Exercise Clause or RFRA, the Tenth Circuit, in support of Hobby Lobby, determined that such corporations are persons who can exercise religion under RFRA. The D.C. Circuit offered a hybrid. Although two judges – Janice Rogers Brown and A. Raymond Randolph – ruled that the Freshway Companies are not persons under either the Free Exercise Clause or RFRA, they nonetheless held that the Gilardis could bring suit because the Freshway Companies are closely held corporations with only the two brothers as owners and shareholders. In that context, the court decided, the brothers suffered a concrete and personal injury and could likely prove that their religion was substantially burdened by the mandate.
     
    The diverse circuit court rulings risk turning the contraceptive mandate issue into a debate over corporate form and institutional rights. If corporations engage in speech under the First Amendment – Citizens United – why can’t they exercise religion?
  • October 21, 2013
    Guest Post
    by David H. Gans, Director of the Human Rights, Civil Rights, and Citizenship Program, Constitutional Accountability Center.
     
    * This piece is cross-posted at CAC’s Text & History Blog.
     
    The government shutdown may have ended, but the hardline conservative attack on the Affordable Care Act hasn’t. In the coming months, the Supreme Court will decide whether to hear challenges brought by secular, for-profit corporations and their owners to a key provision of the ACA that requires certain employers to provide female employees with health insurance that covers all FDA-approved contraceptives. The ACA already exempts religious employers from the duty to provide contraceptive coverage, but these secular, for-profit corporations insist they are entitled to exemption as well. In its own challenge earlier this year, Hobby Lobby, an arts and crafts chain, succeeded in persuading the United States Court of Appeals for the Tenth Circuit to accept a truly remarkable proposition: that the corporate entity itself is a person exercising religion and is entitled, on grounds of religious conscience, to deny its female employees health insurance coverage for FDA-approved contraceptives. Two other federal circuits have rejected this analysis, and the Supreme Court has been asked to resolve the split between the federal courts of appeal. If, as is widely expected, the Court agrees to hear Hobby Lobby, the case will be vitally important on a broad range of issues: corporate personhood and the rights of business corporations, women’s health, employee rights, the role of religion in the workplace and more.
     
    In the 225 years since the ratification of the Constitution, the Supreme Court has never held that secular, for-profit corporations are entitled to the Constitution’s protection of the free exercise religion. As we explain more fully in this legal brief and issue brief, it should not do so now.
     
    From the Founding on, the Constitution’s protection of religious liberty has always been seen as a personal right, inextricably linked to the human capacity to express devotion to a God and act on the basis of reason and conscience. Business corporations, quite properly, have never shared in this fundamental aspect of our constitutional traditions for the obvious reason that a business corporation lacks the basic human capacities – reason, dignity, and conscience – at the core of the Free Exercise Clause.   No decision of the Supreme Court, not even Citizens United, has ever invested business corporations with the basic rights of human dignity and conscience. To do so would be a mistake of huge proportions, deeply inconsistent with the text and history of the Constitution and the precedents of the Supreme Court.