Nov 7, 2014

Does Legislative Negligence Trump Legislative Intent?

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The Supreme Court today agreed to hear the King v. Burwell case, which – similar to Halbig v. Burwell, wherein the DC Circuit Court ruled against Burwell (i.e., the Affordable Care Act) in July – challenges the legality of tax subsidies used to offset the cost to individuals buying health insurance through federally administered exchanges. As the ACA was written subsidies were to be available through state run exchanges, but since most states opted out of creating and running their own exchanges more than two-thirds of everyone who signed up for health insurance did so through federal exchanges. Of those, approximately 85% – or 5 million people – received subsidies at an average value of approximately $3,200 per year.

Those folks stand to lose that benefit – and in many cases likely health insurance –if SCOTUS determines that the letter of the law should supersede legislative intent. Beyond that, given the actuarial models supporting expansion of individual health insurance under the ACA the prospective financial viability of that expansion would likely becomes untenable.

Congressional staffers had already been discussing ideas of how to work around the loss of tax subsidies – but that was before this Tuesday. The new sheriff in town won’t be very anxious to support legislative efforts that seek to save Obamacare in any fashion. What can be done through regulations? My guess is not much, so a ruling in favor of King would likely be the devastating blow detractors have been chasing since March of 2010.

From a retrospective standpoint this is just another serious distraction in a long line of legal and administrative obstacles that have become part and parcel of legislative implementation. It reflects the urgent and manipulative manner in which the Affordable Care Act was rammed through passage in March 2010 following a string of made-for-TV political events that played out beginning with the death of Senator Ted Kennedy in August 2009.

Ever since then Republicans have argued that a policy initiative of the breadth and scope of the Affordable Care Act necessarily should have been subject to broader bipartisan support, such as what would have been required through a normal reconciliation process of the two House and Senate bills. While at the same time Democrats have argued Republicans’ expressed concern has largely been a case of “protesting too much” and only really being concerned with stopping any legislative initiative of the President, regardless of its policy merits.

In any event, what SCOTUS will have to wrestle with is attempting to understand the contextual purpose of the health insurance subsidies and whether legislative intent is a sufficient enough consideration to disregard the stated restriction of those subsidies to only state run exchanges. As someone who has supported the ACA I don’t share this from the perspective of looking for any opportunity to blow it up. But I think it has to be taken into consideration by the Court that the law’s contorted framework and structure is a theoretical obstacle for accepting the legislative intent argument.

How can you accept legislative intent as a theoretically understood precept for a provision of an act that in several significant instances (i.e., CLASS, the employer mandate, renewal of noncompliant plans, special enrollment and hardship exemptions), has not been implemented as intended? Are the justices required to not consider legislative enactment and just look at the Act independently of the apparent disconnect? I’m not a lawyer, so maybe I am just thinking of this like a four year old – but then someone is going to have to explain to me what’s wrong with my logic.

Cheers and enjoy the weekend,
  ~ Sparky

Filed Under: In the News · Tagged: , , , ,
Jul 22, 2014

As the ACA Turns

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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 . . .

Cheers,
  Sparky

Picture credit: Time Magazine

Filed Under: Affordable Care Act, Editorials & Opinions · Tagged: , , , ,
Jun 25, 2013

Health Insurance Exchanges: 4th & 10

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OFIf you haven’t already heard, the Department of Health and Human Services is in active negotiations with the National Football League to leverage its broad reaching media platform to promote and grow awareness about the impending online health insurance exchanges. The exchanges (or marketplaces, as HHS arbitrarily decided to begin calling them back in January of this year) are really the pinnacle upon which much of the long-term economic success or failure of the Affordable Care Act rests.

The exchanges are to consist of regulated and standardized healthcare plans from which individuals will be able to purchase health insurance that is eligible for federal subsidies. Only 17 states have so far opted to develop their own exchanges (including DC), while an additional 7 are developing partnership exchanges with participation of the federal government. That leaves another 27 states that have chosen to have the federal government develop and administrate exchanges on their behalves. Thus, we could have Terry Bradshaw and Dan Marino now benefitting from both sides of the healthcare paradigm: Nutrisystem on one side and insuring against the consequences of obesity and diabetes on the other.

And in what is no doubt another unintended irony of federal healthcare policy HHS will be choosing to utilize a marketing platform in which the primary communicators are specifically restricted from discussing the health of the individuals playing the game being featured (i.e., due to HIPAA requirements). Just imagine Joe Buck describing the action this fall.

“Ow! That was a tough hit Troy.  I’m not wanting to speculate on whether his knee normally bends all the way forward like that or not, but given where his foot is now resting I’m thinking that hypothetically such a condition could constitute an injury. And hey, while they are carrying away the player whose condition is confidential on a stretcher, this gives us a chance to pause here and remind everyone that you probably shouldn’t wait until your ligaments are shredded before you take advantage of the wonderful discounts now being offered in your state insurance market, er, or I mean exchange . . . did I get that right, Troy?”

Let’s face it: the federal government just doesn’t do marketing very well. As opposed to all of the things it does do very well, right? Wrote it before you thought it. But there have been some notable exceptions too, the source for many of those being the National Ad Council (remember the Crying Indian from the Keep America Beautiful Campaign of 1971?) I still can’t watch that ad without tearing up. Where did that type of talent go and why isn’t such creativity being employed to promote the benefits of the ACA?

Beyond just marketing, the lack of effective communication for the Affordable Care Act has been a complaint of mine dating back four summers ago when the ACA was still a bill being debated in town halls and at dinner tables across the country.  The number one search string for this blog continues to be queries regarding whether or not the ACA will ration knee replacements for seniors. Think there’s a need for more education and awareness?

We have had two presidential administrations now with weak communication skills. In George Bush we had a president whose every public appearance offered new and imaginative ways to use the English language. Now with President Obama we have someone who, to me, frankly just doesn’t seem to like being around people. Now that’s a general disposition I can certainly appreciate – but how one reconciles that disposition with a desire to be effective in public office is a little more difficult to understand.

Invariably, the ultimate effectiveness of a public policy will be more indebted to its implementation than its design. We have seen this administration step on rake after rake in developing marketing and communication strategies that reflect its own arrogance and disconnect with understanding simple yet common realities – like concern over whether or not someone is going to be able to get a knee replacement.

I have read that a primary strategy of leveraging sporting venues such as the NFL to promote the insurance exchanges is to target young, healthy men – who actuarially are less likely to need healthcare. In order for any insurance pool to be financially viable you have to have enough folks paying in that will never get paid out. That makes sense in theory, but think of this: how do the guys you see in all of the beer commercials ran during NFL games compare to the guys sitting around watching the game with you?

Just sayin’

Cheers,
  Sparky

Filed Under: ACA Implementation, Health Insurance Exchanges · Tagged: , , , ,