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Saturday, December 28, 2013

Recent Attacks on Obamacare: How Big is Halbig v. Sebelius?

In the world of recent attacks on the Affordable Health Care Act (ACA), one federal case–Halbig v. Sebelius–is a last-ditch effort by opponents of the law to prevent affordable, quality health care for all Americans. 

This desperate anti-Obamacare Hail Mary pass by the Cato Institute hasn’t received major media attention, but believe me, any organization with a substantial investment in the health law is keeping a close eye on the Halbig case. Although the plaintiff’s argument is absurd, the courts are too unpredictable to be ignored, as previously witnessed by ACA supporters in the 2012 SCOTUS case.

The skinny: by taking six words from a complex statute and stripping them completely out of context, the plaintiff challenges the ACA’s congressional and textual intent to provide premium tax credits in Federally-Facilitated Exchanges (FFE). In other words, they’re claiming the law doesn’t allow the IRS to provide tax subsidies for qualified low-income individuals in the 34 states that didn’t want to run their own exchange.  

Their only evidence: the text of the ACA defines an exchange that provides subsidies as “an Exchange established by the state.” Of course, this interpretation by the plaintiff is too narrow, disregarding the vast body of evidence contradicting it.  The text of the law is clear–premium tax credits are made available to all (income-eligible) people who seek coverage through an exchange, regardless of at what level a government operates it. 

The disputed provision is being taken so far out of context that it ignores its own title. Title I of the ACA is named “Quality Affordable Care for All Americans,” not “Quality Affordable Care for some Americans,” or “Quality Affordable Care for Americans in state run exchanges.” This is the title of the section where the disputed provision is located. 

The law’s text clearly considers a Federally-Facilitated and state-run exchange to be identical for purposes of making tax credits available. The law designates the term “Exchange,” with a capital “E,” and defines it as an “Exchange established by the state.” The law specifies that these “Exchanges” will provide tax subsidies to qualified low-income individuals. If a state does not establish an “Exchange,” the text of the law directs the federal government to stand in for the state and operate an “Exchange” (with a capitol “E”). The “E,” designating it as an Exchange providing tax subsidies, makes it clear that the law assumes federal Exchanges are identical to state-run exchanges. The government steps into the shoes of a state and operates the Exchange in that state.

Congressional intent when drafting the law is also clear. Pointing out a simple drafting error would do little to undermine the law, so the plaintiff has fabricated a theory that Congress intended to force states into setting up their own exchange by withholding tax subsidies.  This was clearly not the case.  First, there is no legislative history hinting that anyone in Congress believed premium tax credits might not be available in a FFE.  Second, no state official ever mentioned that letting the federal government operate an exchange could jeopardize the availability of premium tax credits to residents of their state. 

Third, the National Journal stated that the “Congressional Budget Office repeatedly estimated the cost of providing subsidies in all 50 states, and the agency has said that no one from either party ever asked it to assume that consumers in some states would not receive the tax credits.” Lastly, if the plaintiff’s theory is true, then why haven’t we seen any members of congress—those who actually voted on the bill—bring this unconstitional change in the law to the attention of the American people? The congressional intent was to provide premium tax credits to all people who qualified in any state.  Clearly, Congress intended federal exchanges to be treated the same as state exchanges.

Above all, the plaintiff’s argument is simply incoherent. Assuming the plaintiff’s interpretation of the law is true, a FFE could not offer qualified health plans with premium tax credits. This would render a FFE virtually useless. These nonsensical results prove that the opponents’ argument is completely contrary to the text of the law and to Congress’s intent. 

The court will decide on the law’s intent by looking at its coherent and logical entirety. This isn’t an argument about statutory interpretation or Congressional intent…this is about politics. There is no question Judge Paul L. Friedman of the U.S. District Court for the District of Columbia will see right through the plaintiff’s arbitrary argument and political motives to prevent affordable, quality health care to all Americans.  

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