As the ACA Turns

So now what?

If the Affordable Care Act was a soap opera – and who’s to say it’s not – I think even Susan Lucci would have lost faith by now in the merits of a plot leading to any type of long-term resolution, clarity or certainty.

The U. S. Court of Appeals for the D.C. Circuit ruled today in the Halbig v. Burwell decision that the IRS had incorrectly allowed the subsidization of insurance premiums to millions of Americans covered under the Act’s health insurance exchanges. Then about an hour later, the U.S. Court of Appeals for the Fourth Circuit, in Richmond, argued that the IRS was within their legal power because the subsidies they provided were, “a permissible exercise of the agency’s discretion.”

Following along?

The Act provides that subsidies be provided to “state-run” exchanges, but whether through political objection or inability, 27 states opted to have the federal government establish and operate their exchanges while another 9 states opted to have their exchanges jointly ran by state and federal agencies. So by an interpretation of the letter of the law subsidies are unavailable to individuals living in those 36 states.

In writing the 2-to-1 majority opinion on the Halbig decision, Judge Thomas Griffith noted that, “we reach this conclusion, frankly, with reluctance.” Why? Because according to the Robert Wood Johnson Foundation an estimated 7.3 million people — about 62 percent of those expected to enroll in federal-run exchanges by 2016 — could lose out on $36.1 billion in insurance subsidies. Over 7 million individuals could be losing an average of $4,400 in annual subsidies (based on Congressional Budget Office estimates for the current year).

What each court had to wrestle with was whether it was Congress’ intent to provide expanded access to healthcare insurance through premium subsidization irrespective of whether the exchanges are ran by state or federal governments. Judge Griffith wrote that, “the fact is that the legislative record provides little indication one way or the other of congressional intent, but the statutory text does. Section 36B plainly makes subsidies available only on Exchanges established by states.”

And there’s the rub. Looking back to the summer of 2010, the legislative process leading to passage of the Affordable Care Act was ridiculously chaotic, incredibly politically charged and fraught with misinformation being spewed in all directions by nearly every stakeholder who could find a media outlet. All (as in both) parties being equally complicit in disinformation

John Earnest, White House press secretary noted, “you don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who were running the marketplace. I think that is a pretty clear intent of the congressional law.”

I think he is wrong. It’s not clear because the legislative process leading up to and through passage was anything but. In fact, it can be effectively argued that lack of clarity was a direct result of favoring political expediency over legislative pragmatism. The Act is very poorly written and is fraught with these types of examples where implementation wasn’t very well thought through. But that lack of clarity – and legislative ambiguity in particular – is not grounds for overturning legislative intent.

Writing today in The New Republic, Brian Beutler argues that applying Supreme Court Justice Antonin Scalia’s concept of “overall statutory scheme,” that, “the words of a statute must be read in their context,” it is unambiguous that it was Congress’ intention through the ACA to provide insurance subsidies a priori of the means and mechanisms of the exchanges. Even if the argument could be made that it was ambiguous, Beutler notes that there is still the need to determine whether the law has been interpreted plausibly. In either case, it seems unlikely this latest attempt to derail the ACA will ultimately succeed.

But let’s assume that it does. I think it could easily be a case of be careful what you wish for because you might just get it for republicans. By the time this issue would make it through the Supreme Court there will be at least over 7 million individuals that are going to be told they will suddenly lose what then could reasonably be a $5,000 a year benefit. All that would be required to maintain the benefit would be an administrative language modification, which republicans could refuse as a plausible effort to cripple the Affordable Care Act. They would be in a politically very difficult spot – but then that seems to be a self-inflicted level of comfort they’ve grown accustomed to.

So stay tuned, as they say . . .


Picture credit: Time Magazine

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