At some point between now and the end of June, the Supreme Court will decide King v. Burwell and, in the process, determine whether the phrase “established by the State” actually means “established by the State.” This phrase, which appears twice in the Patient Protection and Affordable Care Act (PPACA) provisions authorizing tax credits for the purchase of health insurance in exchanges, has bedeviled defenders of the IRS rule purporting to authorize credits in federally established exchanges. Some claim this phrase is “convenient shorthand” for “exchange” (even though it’s neither more convenient nor shorter), while others argue the phrase is effectively meaningless, or actually means something else (such as established in the State). The plaintiffs, on the other hand, maintain that the language means precisely what it says.
WASHINGTON — They are only four words in a 900-page law: “established by the state.”
But it is in the ambiguity of those four words in the Affordable Care Act that opponents found a path to challenge the law, all the way to the Supreme Court.
How those words became the most contentious part of President Obama’s signature domestic accomplishment has been a mystery. Who wrote them, and why? Were they really intended, as the plaintiffs in King v. Burwell claim, to make the tax subsidies in the law available only in states that established their own health insurance marketplaces, and not in the three dozen states with federal exchanges?
ObamaCare supporters have produced study after study warning of the devastation to come if the Supreme Court decides the IRS did in fact illegally extend health insurance subsidies to people in states operating under federal exchanges.
But the American Action Forum (AAF), a dynamic think tank led by former CBO director Douglas Holtz-Eakin, has produced new research that provides balance to what has been a one-sided debate. He shows how people in 37 states will be helped if the petitioners prevail in King v Burwell.
AAF estimates that more than 11 million people would be liberated from having to purchase expensive ObamaCare insurance and freed from the onerous penalties of the individual mandate, which cost those who don’t comply an average of $1,200 in fines this year. The study also finds that workers could earn nearly $1,000 more, and 1.2 million more people would join the workforce in federal exchange states if King prevails in the lawsuit.
In March, the Supreme Court heard oral arguments in King v. Burwell, the case that will decide whether the language of the Affordable Care Act (ACA) allows only those who purchase health insurance through state-established exchanges—not federal health exchanges—to qualify for federal subsidies. Justices Sonia Sotomayor and Anthony Kennedy suggested that they may be forced to allow the subsidies for federal exchanges because limiting subsidies to state exchanges might unconstitutionally intrude on the federal-state relationship by coercing states into forming their own health-insurance exchanges. This federalism argument, however, is based on speculation leading to flawed legal reasoning. It shouldn’t determine the outcome the case.
The ACA’s statutory language seems to limit federal subsidies to people enrolled “through an Exchange established by the State under section 1311,” the ACA section directing states to establish health exchanges. The statute makes no mention of subsidies for enrollees on the federal exchanges authorized under a different ACA section, 1321. The plaintiffs in the case argue that this is no accident: Congress, they maintain, intended to encourage states to create their own exchanges by offering subsidies only to state-created exchanges.
Justice Sotomayor asked if interpreting the ACA to disallow federal-exchange subsidies would “intrude on the federal-state relationship, because then the states are going to be coerced into establishing their own exchanges.” Justice Kennedy, widely viewed as the Court’s swing vote, amplified the argument, suggesting that under “the standard of constitutional avoidance,” the plaintiffs’ interpretation might be prohibited because it could lead to unconstitutional coercion. “States are being told either create your own exchange, or we’ll send your insurance market into a death spiral,” he said.
The Supreme Court’s pending decision in King v. Burwell could upend the way premium subsidies are distributed through the Federal health insurance exchanges in as many as 37 states. The impacted states are those that declined or failed to establish their own exchanges under the Affordable Care Act (ACA). Examining the insurance market effects we find that:
WASHINGTON (AP) — If the Supreme Court rules the way most Republicans want in the latest health overhaul case, GOP lawmakers who now have insurance coverage under President Barack Obama’s law may wind up with some explaining to do.
Members of Congress, staffers and dependents actually get their health insurance under a little-known provision of “Obamacare.” But if the Supreme Court strikes down government health care subsidies for millions of people in more than 30 states, legal and benefits experts say coverage for lawmakers from those states won’t be affected.
It could be a politically painful unintended consequence.
“That won’t look good, will it?” said Walt Francis, author of an annual guide to the federal employee health benefits program.
About 15,000 congressional staffers, lawmakers and dependents in Washington and around the country get their health insurance through the Washington, D.C., small business exchange, an online market created by the District of Columbia government under the federal health care law.
The Supreme Court is expected to issue its decision in King v. Burwell before the end of June. Should the Court reject the Obama Administration’s regulatory interpretation of the provisions of the Affordable Care Act (ACA) at issue in the case, the Treasury would be barred from paying health insurance subsidies to individuals who obtained coverage thorough Healthcare.gov, the federally run exchange for the 34 states that have not established their own state-based exchanges.
If you like your coverage, you can keep your coverage. That’s the pledge leading members of Congress are making to 6 million Americans at risk of losing their health insurance this year because of Obama administration actions.
At issue is a case before the Supreme Court challenging an IRS rule that allowed health insurance subsidies to be paid through exchanges created by the federal government – the infamous healthcare.gov website.
The Affordable Care Act says at least nine times that subsidies are available to citizens only if their state creates an exchange. In the end, 37 states either declined or failed to do so.
Supporters of the ACA are using scare tactics, saying millions of people would lose their subsidies and likely their health insurance if the court decides the IRS rule is illegal. They say Congress won’t act and states either can’t or won’t set up their own exchanges.
But they ignore commitments by House Speaker John Boehner, R-Ohio, Senate Majority Leader Mitch McConnell, R-Ky., and other congressional leaders to give states another option.
Congress is making plans now to pass legislation after the Supreme Court issues its decision, likely in June. The proposed legislation would create a safety net so people wouldn’t lose their current coverage and also would allow them to use their subsidies to select any policy approved by a state.
Millions of people could escape Obamacare’s onerous mandates and choose more flexible, affordable policies.
Many have dismissed Rick Scott’s lawsuit against the Obama administration over Medicaid funding as meritless, but the Florida governor might actually be doing everybody a favor. The case could help answer a huge constitutional question left over from the 2012 Supreme Court decision on Obamacare.
That’s right—there’s still more of the landmark ruling that upheld President Obama’s signature domestic policy to pick over.
Scott alleges that the administration is illegally trying to force Florida to expand Medicaid under the health care law by threatening to cut off about $1 billion from a separate federal funding stream which helps hospitals that provide uncompensated care to uninsured people.
The court ruled in 2012 that the federal government couldn’t threaten to cut off all of a state’s existing Medicaid funding, which would wreck any state budget, to compel states to accept Obamacare’s Medicaid expansion. It was unconstitutionally coercive; Chief Justice John Roberts called it “a gun to the head” in his decision.
“The Supreme Court said it’s illegal to be coercing a state to expand Obamacare,” Scott said Wednesday after a meeting in Washington with Health and Human Services Secretary Sylvia Mathews Burwell (they did not resolve the impasse). “That’s exactly what they’re doing.”
But what Roberts didn’t say in his ruling was where exactly the line is that separates the federal government’s lawful discretion to persuade states to participate in a program from such illegal intimidation. He explicitly avoided creating a definitive test for it.
“We have no need to fix a line either,” Roberts wrote after referencing a prior case in which the Court declined to delineate between persuasion and coercion. “It is enough for today that wherever that line may be, this statute is surely beyond it.”
On March 4, 2015, the U.S. Supreme Court heard oral argument in King v. Burwell, a tremendously important case involving the administration of the Patient Protection and Affordable Care Act, also known as Obamacare. King is important for a number of reasons. It’s important because a lot of money is at stake. It’s important because it may require fundamental changes to be made to Obamacare. And it’s important—indeed, perhaps it’s most important—because of its significant implications for the rule of law. In this Essay, I explain why the president’s actions in King were unlawful and why a ruling striking down the president’s actions is crucial to ensure the continued vitality of the rule of law.
From the early days of the Republic, a core component of our constitutional character has been the idea that our government is a government of laws and not of men. This means that our leaders—elected and appointed—are constrained by the words in our statute books and in our Constitution. Government officials must follow the law, even when their personal predilections would lead them in a different direction. This prevents arbitrary decision making and keeps executive discretion within proper bounds.