Appeals Courts and Obamacare, What Does It Mean

Pick your poisoned apple from any preferred or not preferred media tree. The courts have struck a blow to Obamacare in some. They have not in others. Ah, the popular media is what it is.

I just read an article from Yahoo Finance which practically says nothing, although the video from FOX featuring Dr. Ben Carson is interesting in more ways than one which I hope to find time to address because it practically says nothing beyond the rhetoric.

I only have a few minutes this morning, but a friend who is a Professor of Economics and former colleague asked for my initial impressions regarding the “dueling” decisions from two U.S. Courts of Appeals.

The decision in the case of Halbig v. Sebelius, 14-5018, U.S. Court of Appeals for the District of Columbia (Washington) is linked here.

Basically, it is this case where a 3 judge panel ruled 2 to 1 that access to Federal subsidies were intended solely for individuals who enroll for coverage on an exchange “established by the state.” According to this ruling, only individuals from 14 states plus the District of Columbia would be eligible for subsidies to help defray the cost of their health insurance. Individuals in the other 36 states would not be eligible for subsidies since those states did not create their own exchanges but instead had the Federal government create an exchange for that state.

Not too far down the road from DC in Richmond, VA, in the case of , King v. Sebelius, 14-1158, U.S. Court of Appeals for the Fourth Circuit, ruled unanimously in favor of individuals being eligible for these cost defraying subsidies regardless of if they enrolled in an exchange operated by the Federal government or one created by their home state.

That decision is linked here:

Many media outlets and pundits are inaccurately declaring that this conflict over presumed intent versus a literal interpretation of these four words “established by the state,” the phrase of which appears 10 times in the Affordable Health Care Act or Obamacare, is headed for the Supreme Court. The appeals process, however, does not work in that fashion. Panels issued these rulings and appeals would first be heard by the entire membership of the respective Appeals Court. You may view information about the U.S. Court of Appeals for the District of Columbia here.

The cases may indeed reach the Supreme Court and there are several pending cases on the dockets in other states. I may be incorrect from my mere perusing of the decisions, but wording and history suggest to me that these two cases at least will be settled by membership at this level.

I base my impression less upon the “Congressional intent” argument suggested in the White House press brief than I do with the practical and actual political implication of the Halbig ruling in particular.

First let me assert that the Federal government will continue to issue these subsidies regardless of whether it involves a Federal or state exchange. That is not ignoring the law as some suggest. Obviously there is an appeals process and more importantly the decision in Halbig denied the plaintiffs’ request to suspend these subsidies in the form of tax credits.

The practical and political implication to which I refer is considering what would actually occur beyond the partisan rhetoric if this ruling were upheld. Let’s cite Senator Ted Cruz’s statement:

“The D.C. Circuit’s decision today in Halbig v. Burwell is a repudiation of Obamacare and all the lawlessness that has come with it,” said Sen. Cruz. “The Obama Administration, through the Internal Revenue Service, has attempted to dispense revenues to the states without proper congressional authorization, robbing Congress of its constitutionally-provided power of the purse. This decision restores power to Congress and to the people and if properly enforced, should shield citizens from Obamacare’s insidious penalties, mandates, and subsidies. This is a significant victory for the American people and the rule of law, but we must not rest. Americans will continue to lose jobs, pay higher premiums, and receive fewer healthcare choices because of this disastrous law. Every last word of Obamacare must be repealed to restore jobs, growth, and opportunity in our country.”

According to the Senator, he opposes the dispensing of Federal revenue to the states. Those who disagree with me will argue just as Senator Cruz writes that this opposition to the funds is only those funds “without proper congressional authorization.”

It gets tricky here, however, when placed into context. The ruling does not impact exchanges created by the states. It only impacts individuals in those states that chose not to create their own exchanges and thus gave that power to the Federal government.

If I lived in a state where subsidies in the form of tax credits were not available, I would contend that any blame should be levied at that particular state for choosing not to comply with the law. A 10th Amendment argument is inapplicable because the state willingly gave up its power to the Federal government to create an exchange for them.

In a similar manner, Congress decided to pass its “power of the purse” to the IRS in this matter. For whatever reason, I argue that it is political partisanship, Congress neglected its responsibility. Even with the scandals, regardless of what you believe about them personally, just from a typical opinion of the IRS would you or me or really anyone with any degree of common sense grant that entity more power and responsibility?

In the law Congress did that, it was not the President. If you want to play the Democrat/Republican game here on the votes passing the law, it’s unnecessary for me to even utilize the citing of riders which originated on the other side of the aisle procedure. The reason is that instead of the repetitious for show votes in the House to repeal Obamacare, they had countless opportunities to restore the allocation of any Federal monies back to their watch. Neither the House nor the Senate proposed any moves in that direction.

I’m not linking them here, but anyone can read my previous pieces on Obamacare. My opinion has not changed in that I believe that the law has many positive and many negative components. Regardless of determinations on what is positive or negative, the implementation of the rollout was flawed to a substantial degree. Opposition or not, unprecedented scale or not, we expect better execution from either government, private, or even individuals conducting any type of business.

That aside even with the benefit of hindsight or through the wearing of rose colored glasses and jaded memories can most of us profess that the system prior to ACA worked without a hitch? I think most of us agree that we pay too much for any insurance when we have no need for that insurance. Our opinion changes, however, when we need to make a claim. Likewise healthcare at any level often turned into a seemingly never ending maze of detours, blind corridors, and freaking sinkholes to navigate through.

My generation and those on either side take employer supplemented health insurance for granted. That and other benefits packages as we know them, however, date back only about 75 years in US history. Somehow that is typically neglected from the discussions.

It really doesn’t matter if one believes access to health care is right or not, most will probably agree that a healthier individual and society as a whole for that matter, is more productive than if that individual or society were burdened by disease and injury.

Sure we can argue about funding and personal responsibility, but partisanship aside look at the prior healthcare propositions on a Federal level in the US. I have a chart on this site, and if you do not pay attention to the group who proposed the plan there isn’t much difference amongst GOP, Democrat, liberal, or conservative.

I cannot tell anyone a short and simple plan to get the best healthcare to the most people in the most efficient manner. I doubt if a simple solution exists.

What I can say is that status quo was not efficient. Obamacare as a whole is a convoluted mess, but it is also the only thing written out despite all the talk. Instead of “repeal, repeal, repeal,” I want to see it used as a frame to start crafting something that will function better. When I hear “repeal,” my initial question is always “what aspect or provision.” Rarely do I receive an answer because too many do not look at all the individual aspects.

It’s not as simple as all or nothing. Proof of that are the arguments against the administration for delaying or failing to implement specific provisions. Some in Congress, the media, and all walks of life argued vehemently against these items, yet they find it appalling that those formerly evil aspects are not being implemented.

Do I think either ruling will have a great impact? No

I do wonder if those cheering the decision to disallow those tax credits realize that if that is the letter of the law, any benefit available to individuals within another state which you are ineligible to receive in your state results from decisions made by the leadership of your state. Sure you can blame Obama, but with the Halbig decision the states that did not willingly grant their authority under the law and contained in the Constitution will not be subjecting its residents to the same potential personal costs as those states who failed to take responsibility. Think what you will about Obamacare, but any specific additional costs you might incur with this ruling is because of the state and not the President.