A project of the Galen Institute

Issue: "Legal Challenges"

The Potential Side Effects of Halbig

Larry Levitt and Gary Claxton
Thu, 2014-07-31
"The recent decision of a three-judge panel in the Halbig case, if it prevails, would have a direct effect on the availability of subsidies under the Affordable Care Act (ACA). People buying coverage on their own in insurance exchanges run by the federal government would be ineligible for income-based subsidies. Depending on how you count, that would take premium subsidies away from 4.6 million people in 34 states, or 4.7 million people in 36 states if you count New Mexico and Idaho (which have signaled their intention to operate their own exchanges but are still using the federal marketplace). Many more people are eligible for subsidies but haven’t yet signed up.

It Wasn’t a Tax Before It Was a Tax: Court Upholds Obamacare Individual Mandate

Elizabeth Slattery, The Heritage Foundation
Thu, 2014-07-31
"A three-judge panel of the D.C. Circuit Court of Appeals on Tuesday ruled against a challenge to Obamacare’s individual mandate based on the origination clause of the Constitution. The Supreme Court held in NFIB v. Sebelius (2012) that Obamacare’s individual mandate was constitutional because it was a tax. The Constitution also says tax legislation must originate in the House. But the Obamacare individual mandate tax did not originate in the House. Senate Democrats took a House bill that provided tax credits to veterans purchasing new homes, gutted its language and “amended” it with the language that would become Obamacare. Todd Gaziano, one of the lawyers for Matt Sissel, likened this amendment to “the complete destruction of a house and the erection of a massive skyscraper on the same street address.” In a unanimous ruling in Tuesday’s case, Sissel v. U.S. Department of Health and Human Services, the D.C.

Barone: Dems lose health exchanges bet

Michael Barone
Mon, 2014-07-28
Words mean what they say. That’s the basis for the decision of the U.S. Court of Appeals for the D.C. Circuit in Halbig v. Burwell invalidating the Internal Revenue Service regulation approving subsidies for Obamacare consumers in states with federal health insurance exchanges. The law passed by Congress, Judge Thomas Griffith explained, provided for subsidies in states with state-created exchanges, but not in states with federal exchanges. That’s factually correct, and under the Constitution, the government can’t spend money not authorized by Congress. This has not prevented Democrats from calling the decision “judicial activism,” which makes as much sense as the claims that the Supreme Court decision overturning the Obamacare contraception mandate cuts off all access to contraception. “We reach this conclusion,” wrote Judge Griffith, “with reluctance.” Judge Roger Ferguson, writing for the Fourth Circuit whose King v.

IRS prepping for Obamacare employer mandate in 2015

Jennifer Haberkorn, Politico
Sat, 2014-07-26
"The Obama administration signaled Thursday it’s not backing down from the controversial health law employer mandate that has been delayed twice and is the centerpiece of the House’s lawsuit against the president. The IRS posted drafts of the forms that employers will have to fill out to comply with the Obamacare requirement that employers provide health insurance to workers. Some business groups said the information was still too tentative and too incomplete to let them prepare for new obligations under the health law. “Our immense frustrations with the IRS continue,” Christine Pollack, vice president of Government Affairs at the Retail Industry Leaders Association, said in a statement. An administration official said the White House is sticking to the timeline announced earlier this year. Companies with 50 to 99 employees will have another year — until 2016 — to start the coverage.

The Stakes Beyond the Halbig Lawsuit

Drew Altman for Wall Street Journal
Fri, 2014-07-25
"A lot of attention is being paid to the dueling decisions in two U.S. appeals courts about whether the U.S. government can provide tax credits to people in federal- as well as state-run insurance exchanges. In human terms, the stakes are high: Millions of moderate-income people will not be able to afford health coverage without a subsidy, and a court ruling could gut coverage expansion in the 36 states with federally run insurance exchanges, unless states decide to set up their own exchanges. One of the cases, Halbig v. Burwell, also adds uncertainty to the enrollment process set to begin this fall, when millions more people are expecting to get tax credits–and wondering if they may be taken away. Amid the reaction, little attention has been paid to whether Americans will perceive Halbig as a legitimate legal question or as more inside-Washington politics. The plaintiffs paint this as a case about statutory language and intent.

Obamacare Architect Admitted in 2012 States without Exchanges Lose Subsidies

Ryan Radia, Competitive Enterprise Institute
Thu, 2014-07-24
"This week, an unprecedented circuit split emerged in Halbig v. Burwell and King v. Burwell over whether health insurance premium assistance is available in states that didn’t set up health insurance exchanges. Many commentators have since claimed that there’s no way Congress intended to deny premium assistance to residents of the 36 so-called “refusenik” states that have not set up their own health insurance exchanges. But in January 2012, Jonathan Gruber—an MIT economics professor whom the The New York Times has called “Mr. Mandate” for his pivotal role in helping the Obama administration and Congress draft the Affordable Care Act—told an audience at Noblis that: 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.

Bolstered by Ruling, Republicans Attack Health Law

Robert Pear, NY Times
Thu, 2014-07-24
"WASHINGTON — Republicans in Congress resumed their campaign against the Affordable Care Act on Wednesday with new zeal, fired up by a ruling of a federal appeals court panel that said premium subsidies paid to millions of Americans in 36 states were illegal. Republicans pointed to the ruling as evidence of problems in the law that could not easily be solved. “Time and time again,” said Representative Charles Boustany Jr., Republican of Louisiana, “the administration has chosen to ignore the law, and when it does implement the law, it does so incompetently.” Mr. Boustany presided over a hearing of a House Ways and Means subcommittee on Wednesday. An official from the Government Accountability Office, an investigative arm of Congress, testified at the hearing that undercover agents had obtained insurance coverage and subsidies using fake documents and fictitious identities."

Halbig Decision Puts Obamacare Back on the Front Burner and Will Give Republicans a Huge Political Headache

Bob Laszewski, Health Care Policy and Marketplace Review
Thu, 2014-07-24
"Today's 2-1 decision by the DC Court of Appeals striking down federal premium subsidies, in at least the 27 states that opted for the feds to run their Obamacare insurance exchanges, has the potential to strike a devastating blow to the new health law. The law says that individuals can get subsidies to buy health insurance in the states that set up insurance exchanges. That appears to exclude the states that do not set up exchanges––at least the 27 states that completely opted out of Obamacare.

Confused about the health care rulings?

Tony Pugh, McClatchey News Service
Wed, 2014-07-23
"WASHINGTON -- Contrary rulings Tuesday on a key element of the Affordable Care Act by two separate federal appeals courts raise a variety of questions. Q: What happened? A: The U.S. Court of Appeals for the District of Columbia Circuit decided 2-1 that tax subsidies available to help people pay for health coverage through the Affordable Care Act can only be used in the 14 states and in D.C., which run their own insurance exchanges without any help from the federal government. But in a unanimous decision on a similar case a short time later, the 4th U.S. Circuit Court of Appeals in Richmond, Va., ruled just the opposite. Q: Who’s eligible for the tax subsidies? A: Individuals and families who earn between 100 percent and 400 percent of the federal poverty level. For those who enrolled this year, it includes individuals earning $11,490 to $45,960, and a family of four earning from $23,550 to $94,200. Q: Does the D.C.

Here’s What Obamacare’s Authors said They Actually Meant

Emily Badger, Washington Post
Tue, 2014-07-22
"The two contradictory appeals court decisions that cast the future of Obamacare into uncertainty Tuesday morning largely center on a question of intent: When the Affordable Care Act was conceived and drafted, did its creators mean to withhold health care subsidies from people living in states that refused to set up their own exchanges?. This latest legal challenge focuses on four words in the mammoth law authorizing tax credits for individuals who buy insurance through exchanges "established by the States." Thiry-six states declined to set up their own exchanges — far more than the law's backers anticipated — and in those states, consumers have been shopping for health care on exchanges run instead by the federal government. Now the D.C.

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