What Happens Next For Halbig?

Margot Sanger-Katz reviews the possibilities. The one that is getting the most attention:

All the judges on the D.C. Circuit could decide the Halbig v. Burwell case. There is a process called “en banc” review in which the case would be reargued before all of the 11 judges on the D.C. Circuit Court, and the Obama administration has said it will ask the court for such a review. A majority of the judges would have to agree to rehear the case for it to be reconsidered in this way. Appellate courts rarely accept cases for en banc review, but this is a big one. Many legal experts think that the full court would view the government’s position more favorably than the two judges who ruled against them in the original decision on Tuesday; legal questions don’t necessarily break down along political lines, but Democratic appointees outnumber Republican appointees on the court and include four new judges recently appointed by President Obama.

Danny Vinik thanks Reid for having deployed the nuclear option:

Here’s where the Democrats’ use of the nuclear option is important. The D.C. Circuit has 11 judges on it, seven Democratic appointees and four Republican ones. The only reason Democrats have a majority is due to the nuclear option.

As University of Michigan law professor Nicholas Bagley explains at The Incidental Economist, the D.C. Circuit will likely review the decision and vacate Tuesday’s rulingall because of those extra three judges.

“There’s no doubt that having a court with more members appointed from the left will end up having real consequences for the en banc decision, in terms of whether they take the case and the eventual outcome,” Bagley told me. If the full D.C. Circuit does overturn the ruling today, the appellants could appeal to the Supreme Court. Given the prominence of the case, that might just happenin which case, the nuclear option doesn’t matter. But it is not guaranteed.

Tom Goldstein looks at when SCOTUS might hear the case:

For the case to be heard in the Court’s upcoming term, a petition for review would have to be filed by early November.  The challengers could easily meet that schedule by appealing the case they lost in the Fourth Circuit.  But the Justices may wait to step in until the D.C. Circuit is completely done with its case, which could take an extra six months.  If so, then a decision would have to wait another year.  Time is probably on the administration’s side, because as a practical matter the courts will be less and less likely to strike down the subsidies as more and more Americans get the benefit of them to buy health insurance.

Cassidy seriously doubts SCOTUS will kill the ACA:

In June, 2012, you will recall, the high court, in a five-to-four decision, ruled constitutional the A.C.A. provision mandating that individuals purchase insurance, on the grounds that the mandate was a tax, which Congress has the right to impose. As many commentators, myself included, remarked at the time, this innovative and largely unexpected maneuver looked like a political one. In the power to tax, Roberts, who wrote the majority opinion, found a way to avoid unleashing the enormous political storm that would doubtless have followed the Court’s decision to overturn President Obama’s signature reform, one he had campaigned on in 2008, and which took more than two years of haggling and debate to become law. Two years on—considerably more by the time this case would reach the Supremes—I very much doubt that the Chief Justice will have discovered the urge to strike down the Affordable Care Act.

But Trende warns against underestimating Halbig:

I think commentators are hanging far too much on the fact that the Supreme Court wouldn’t strike down the subsidies because of its ruling in the 2012 case.  Let’s remember first that the court, before Chief Justice Roberts changed his vote, was apparently poised to strike down the ACA in its entirety — something that even observers on the right doubted it would do.  Justice Kennedy, whom many expected to be the swing vote, was on board for full repeal to the end.

How Big Of An Impact Could Halbig Have?

Waldman focuses on the people affected by the court decision:

Now pause for a moment and consider what it is Republicans are asking the courts to do here. They want millions of Americans to lose the subsidies they got this year, in many if not most cases making health insurance completely unaffordable for them, and their justification is this: We found a mistake in the law, so you people are screwed. As far as the Republicans are concerned, it’s like spotting that a batter’s toe missed second base as he was trotting around for his home run, and therefore claiming that they won the game after all.

But it’s not a game, it’s people’s lives. If they succeed at the Supreme Court, people will die. That’s not hyperbole. Millions of Americans will lose their health coverage — 6.5 million by one estimate — and many of them won’t be able to afford to go to the doctor, and many of them will have ailments that go untreated. People will die.

Pierce is also furious:

Simply put, there is almost an entire half of our political system that believes that a great number of Americans simply do not matter enough to make it economically feasible to help them stay healthy. They do not count. It does not matter how many of them die preventable deaths. It is better for the country, this half of the political system believes, that they grow sick and bankrupt themselves.

Michael Cannon, who Weigel calls Halbig’s “chief advocate,” shifts blame:

The D.C. Circuit applied the law that Congress enacted. Any downstream effects of Halbig are the result of the PPACA itself, not today’s ruling. If those effects are intolerable, then it is up to Congress to change the law, not the IRS. If Halbig results in people losing health-insurance subsidies, the blame lies with a president who recklessly offered millions of Americans tens of billions of dollars in subsidies he had no authority to offer, that could vanish with a single court ruling.

Waldman thinks this isn’t going to cut it:

If [prominent conservatives] really cared about those millions of Americans and their fate, they’d want to do something about it, now that the lawsuit they filed threatens to take away that health coverage. So what are they going to do? The answer is, nothing. There will be precisely zero conservatives who propose to actually help those people. And if you ask the lawsuit’s supporters what should happen to them, none will have anything resembling a practical suggestion.

Philip Klein sees how a Halbig victory could put Republican governors in a tough spot:

When it comes to Obamacare’s exchanges, Republican governors have been able to have it both ways. By refusing to set up state-based exchanges, they’ve been able to boast to conservatives that they rejected Obamacare. But because the Obama administration has been giving out subsidies in their states anyway, benefits are flowing to their residents. If Halbig were ultimately upheld, however, governors would be in a tight spot. Conservative activists would be pressuring them to hold the line and refuse to set up their own exchanges. But there would be an uproar from liberal groups, newspaper editorial boards, hospitals and insurance lobbyists, and protests from individuals who had been receiving subsidies and would be facing the loss of their insurance.

Is Obamacare In Jeopardy?

Obamacare Ruling

Noah Feldman asserts that “the ACA is not yet quite dead. But there’s blood in the water, and the great whites in robes are circling.” McArdle assesses the damage to Obamacare:

Much will depend on the courts: Does the case get en banc review, does that review rule for the government, and if so, will the plaintiffs be able to push an appeal all the way to the U.S. Supreme Court? Will the Supreme Court expose itself to more outrage from whichever side they rule against? All that is unknown. We do know this much: this was a big blow for the government, and a potentially fatal one for the administration’s signature legislative achievement.

But Emily Bazelon expects the government to prevail:

[I]t is the D.C. Circuit’s ruling that is probably going nowhere beyond a victory lap by the strategic conservative lawyers who brought this case, and a round of postmortem hand-wringing among law professors, who are already deriding the decision. That is because the legal reasoning of the majority in D.C. is seriously unconvincing, and as Slate contributor and UC–Irvine law professor Richard Hasen quickly pointed out, the next stop on the legal train is the D.C. Circuit as a whole, where today’s result will likely be reversed.

Bloomberg View’s editors weigh in:

Obamacare isn’t dead. And given the flimsy logic of the latest legal argument against it, there’s a good chance it never will be. … The legal battle now moves to the full D.C. Court of Appeals and perhaps from there to the Supreme Court. The worst-case scenario is that the strict-constructionist view of the dispute will prevail. Even then, however, Obamacare can survive — if state policy makers take the opportunity to set up their own exchanges.

Ingraham provides the above chart, which shows how many current enrollees would be impacted if federal exchange subsidies are banned. Kevin Drum also imagines what would happen if SCOTUS sides with Halbig’s plaintiffs and “in a stroke, everyone enrolled in Obamacare through a federal exchange is no longer eligible for subsidies”:

What happens is that people in blue states like California and New York, which operate their own exchanges, continue getting their federal subsidies. People in red states, which punted the job to the feds, will suddenly have their subsidies yanked away. Half the country will have access to a generous entitlement and the other half won’t. … You’d have roughly 6 million people who would suddenly lose a benefit that they’ve come to value highly. This would cause a huge backlash. It’s hard to say if this would be enough to move Congress to action, but I think this is nonetheless the basic lay of the land. Obamacare wouldn’t be destroyed, it would merely be taken away from a lot of people who are currently benefiting from it. They’d fight to get it back, and that changes the political calculus.

Ponnuru’s similar thoughts:

Neither party should be confident about how those consequences would play out. Democrats in states without their own exchanges could put pressure on Republicans to establish exchanges or see many people pay higher premiums. Republicans nationally have never made clear how they would replace Obamacare without stripping coverage from millions of people. That failure could become a bigger political problem for them if the courts ultimately conclude that a lot of exchange participants aren’t eligible for subsidies.

Nicholas Bagley also considers the consequences of Obamacare’s opponents prevailing:

If that happens, the states with federally established exchanges will come under enormous pressure to establish their own exchanges. In turn, the federal government would want to make it as easy as possible for those states to convert to state-established exchanges.

Ideally, HHS would also want to relieve states of the need to develop new exchange infrastructure. Rollout challenges in Oregon and Massachusetts, not to mention Healthcare.gov, suggest that getting a website up and running isn’t such a simple task. What if the refusal states could just enact laws (or sign executive orders) saying they’ve “established” their exchanges, but let Healthcare.gov continue to run them?

He admits that “not every state would accept the invitation to establish its own exchange, even if doing so were more or less a formality,” but he suspects “lots of states would, especially as voters started to howl about losing their tax credits.”

 

 

A Split Decision On Obamacare

Jason Millman summarizes yesterday’s news:

The federal appeals court in the District of Columbia ruled 2-1 this morning that the Affordable Care Act doesn’t authorize the federal government to provide subsidies to low- and middle-income Americans to buy insurance in the 36 states where the federal government set up exchanges to sell health-care coverage. Just two hours later, a three-judge panel of the Fourth Circuit Court of Appeals in a similar case unanimously found just the opposite — that the IRS correctly interpreted the text of the ACA when it issued a rule allowing all public exchanges, regardless of who set them up, to provide insurance subsides.

Emily Badger explains what the lawsuits hinge on:

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. Circuit Court of Appeals has ruled that these consumers are not eligible for subsidies because, well, they bought their insurance on exchanges not “established by the States.”

This is a tremendously literal interpretation of a small but crucial part of the law, and it’s one that was arguably never intended by its creators.

Greg Sargent joins the debate over the meaning of “established by the States”:

[T]he phrase does not literally say that subsidies should not go to people who get subsidies from the federal exchange, which under the law must be established in states that decline to set up their own exchanges. In fairness, opponents are right — the phrase also does not literally say that subsidies should go to those on the federal exchange. But all of that is precisely what makes the statutory language in question ambiguous. Once you accept this point — that the meaning of the phrase is not clear — then there is ample precedent for the courts evaluating the intent of Congress as expressed in the whole statute.

Philip Klein quotes from the DC federal appeals court ruling, the one which went against the administration:

“We reach this conclusion, frankly, with reluctance,” they wrote. “At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges.”

Adrianna McIntyre disagrees with this logic:

You can’t examine the part of the statute that sets up federally-facilitated exchanges in isolation; you have to look at it in the broader context of the reform law. Since affordable coverage is a core tenet of the law, to say that people in state and federal exchanges aren’t equally entitled to tax credits would set the law at war with itself. That could be enough to call it ambiguous on its face.

When a law is ambiguous, the courts defer to the interpretation of the agency responsible for implementation. Obviously implementation has moved forward under the assumption that residents of every state are entitled to subsidies, regardless of what kind of exchange the state uses.

But Harsanyi calls the text in question “a fictional drafting error”:

As the plaintiff’s lawyers point out, entitlements and subsidies are regularly tied to state participation — this includes Medicaid, SCHIP, and other health care tax credits … Read Jonathan Adler and Michael Cannon here.

Sean Davis seconds that logic:

[I]f the law’s authors originally intended to constrain subsidies to state plans, what was the rationale for the IRS about-face in 2011? That’s actually an easy one to answer: the administration never imagined that so many states would refuse to establish Obamacare exchanges. The subsidies for state exchange plans were meant to be pot sweeteners—incentives for states to set up their own exchanges. If fines for mandate non-compliance were Obamacare’s stick, the subsidies for state exchange health plans were the carrot. To the law’s backers, that plan made sense: the White House didn’t really want to have to manage 51 separate exchanges. They wanted the states to do all the heavy lifting. Unfortunately, several dozen legislatures and governors had different plans.

Beutler counters such arguments:

What the challengers have asked judges to do is to ignore the “fundamental canon” and buy into the idea that the Democrats who passed the law unambiguously structured it to withhold premium subsidies from states that refused to set up their own exchanges, as some sort of high-stakes inducement. This is plainly false. It’s the giant whopper underlying the entire theory of Halbig. A completely fabricated history of the Affordable Care Act, which treats the scores of reporters who covered the drafting of the law as idiots, and the aides and members who actually drafted it as bigger idiots and liars as well.

Tomasky sighs:

What Randolph and Thomas Griffith, the other conservative judge who ruled with him, essentially did was to take one sentence of a law that runs to thousands of pages and play gotcha. What judges are supposed to do is look at statutory language in context and think about the drafters’ actual intent. But hey, don’t take it from me. Take it from a certain Supreme Court justice, who wrote in a decision just last month of the “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” That was Antonin Scalia.

But these were strange words, coming from Scalia. The context was his majority opinion in last month’s case about the EPA’s regulation of greenhouse gas emissions, which was a complicated and split verdict, albeit one that ultimately gave the EPA most of what it was asking for under the Clean Air Act. More typically, Scalia is a textualist. You can tell what that means, I’d wager, without me even explaining it, and in this case, it ain’t good: “I can’t read legislators’ minds. I can go only by the words in the bill. If they left out a word, they left out a word. Tough.”

Abbe Gluck calls the opinion “terribly disappointing from a statutory interpretation perspective”:

[A]pplying the exclusio unius presumption  (that when Congress specifies X we can assume that it meant not to specify X elsewhere) to a statute as long and complicated as the ACA — and one that did not go through the usual linguistic “clean up” process in Conference (as I wrote here) does a disservice to textualism and all those who have defended it over the years–turning it into a wooden unreasonable formalism  rather than the sophisticated statutory analysis that textualists have been claiming they are all about.

Suderman has a very different view:

The challenge is legitimate. As with the challenge to Obamacare’s individual mandate, which ultimately lost at the Supreme Court, the health law’s backers and the liberal legal community had long argued that the argument made by the challengers was more or less meritless. The win in the D.C. Circuit makes clear that it is not, and even the Fourth Circuit ruling concedes that it is a tough call, saying that “the applicable statutory language is ambiguous and subject to multiple interpretations” and only coming to its conclusion by “applying deference to the IRS’s determination.” Basically, the government won not because it was obviously in the right, but because it got the benefit of the doubt.

Finally, Cohn compares the current Obamacare lawsuits to previous ones:

The previous lawsuits were about some big, weighty issuesnamely, the boundaries of federal power and the extent of personal freedom. The plaintiffs, whatever their true motives, at least claimed to be fighting on behalf of liberty.

These new lawsuits, about which two courts issued conflicting rulings on Tuesday, make no similarly lofty claims of principle. They focus, instead, on some ambiguous text in the language of the law and allegation that Congress intended the law to work differently than the Obama Administration says.

Oh, the legal briefs make some real arguments about constitutional principles and it’s entirely possible that the plaintiffs who wrote those briefs believe them. But it’s hard to escape the conclusion that these arguments are altogether secondary to the real goal herethat these lawsuits are simply one more attempt to cripple Obamacare and yank insurance away from millions of people, no matter what it takes.