Another audio of Gruber from 2012 on how the STATE exchanges are critical and the only way to get subsidies.

 

Important video.

 

From 2012. Michael Cannon from CATO. Whole thing is good but go to 2:30 to 3:52 to hear why the Federal government HAD to create an exchange after 30+ states opted out. And why this court case is important.

 

https://www.youtube.com/watch?v=qcaPnygFbgw

A little bit in clear text.

 

Of states and heath insurance exchanges | The Great Debate

 

If a state opts instead for a federal exchange, as more than 30 states have, the IRS has zero authority to penalize employers there. “As even some health law supporters concede,” Kaiser Health News reports, “the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions.”

 

Yet the IRS is attempting to issue those tax credits — and penalize employers — where it has no authority to do so. Oklahoma’s attorney general has filed suit to protect its employers from this illegal tax.

 

The IRS says it is carrying out congressional intent — a curious claim from an agency violating the express language of a duly enacted statute. The only piece of legislative history the IRS has offered to support its action is the CBO’s cost projections of the bill. The CBO predicted there would be tax credits issued in all states.

 

...

 

...CBO analysts “did not perform a separate legislative analysis of that issue.” When projecting the cost of the Senate bill that ultimately became Obamacare, the CBO merely “anticipated … that the tax credits would be available in every state.”

 

 

Emphasis added (obviously).

 

The statute says that the Federal government can set up an exchange inside a specific state if that state refused to do its own. 34 states did just that. The alternative was for the Federal government to create 34 state specific but federally run exchanges or create an 'umbrella exchange' - healthcare.gov. Clearly setting one exchange was overwhelming to the Federal Government - how would 34 have been?

 

The employer mandate apparently only was to work where there are exchanges. And without tax subsidies - only available to states who proactively, themselves set up the exchange most lesser income people would be free of the individual mandate and not be subject to a tax penalty from the government.

 

Halbig is big. If upheld it will destroy ACA. Other cases have been minor compared to this. This will get real nasty in the public forum. It already has with daily smears of the ruling coming out in all the media.

 

The debate is interesting but as the ruling shows and as Kaiser stated in 2012:

 

“the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions.”

 

Aren't laws meant to be read 'literally'? Or can we all interpret them as we see fit for any circumstance.

Did I say nasty?

 

A comment from this WaPo article.

 

Hobby Lobby was the warm up. Now the insurance exchanges have been gutted. - The Washington Post

"Shame on you , Jennifer Rubin

Shame on WaPo for publishing this poor excuse for a human being"

Sorry the overload on a Friday night...

 

NYT from 2012. The issue was apparent then.

 

http://www.nytimes.com/2012/07/08/us/critics-of-health-care-law-prepare-to-battle-over-insurance-exchange-subsidies.html?_r=0

 

The most likely challenger, Mr. Blumstein said, is an employer penalized because one or more of its employees receive subsidies through a federal exchange. Employers may be subject to financial penalties if they offer no coverage or inadequate coverage and at least one of their full-time employees receives subsidies.

 

Michael F. Cannon, director of health policy studies at the libertarian Cato Institute, said the link between subsidies and penalties was a crucial part of the law.

 

“Those tax credits trigger the penalties against employers,” Mr. Cannon said. If workers cannot receive subsidies in states with a federal exchange, their employers cannot be penalized, he said. That, in turn, would hobble federal efforts to get employers to offer coverage in those states, Mr. Cannon said.

I wouldn't get your hopes up just yet. The DC Circuit decided this case in a 3-judge panel decision. It's almost certainly now to be heard by the full 11-judge court, seven of whom are Democratic appointees and some others who are Republican appointees who have tended to lean more left than intended. They'll overturn and there won't be any more circuit split so the Supreme Court won't see the case.

 

Still, there are other challenges in the works. There are some insanely smart and clever conservative lawyers from the Cato Institute and elsewhere working on bringing this thing down. A circuit split may still happen. They're not done circuit-shopping on this one yet.

Here a summary of what Halbig is about and apparently why things were structured as they were in establishment of ACA based on reading much material and review various statements in print and video last night in, hopefully, some readable/understandable points.

 

- A Federally run single payer system, the goal of any big government (BG) health care advocate in 2009 and before, was not politically going to to fly in 2009. So the decision was the ACA would be 'State-based' exchanges

- The Federal government can not legally/constitutionally force a state to take action. Though the ACA bill says 'States shall create an exchange...' it also said 'if they do not...' the Federal government will create one. When used in legal terminology 'shall' is a very strong word. It is a direct compelling instruction. Again, legally/constitutionally the Federal government can NOT force States to do things with the power legal penalty.

- The approach ACA uses to try to ensure States (use of capital S is intentional BTW) established exchanges was a combination of the carrot and the stick. The carrot was grants and assistance to create and establish State created exchanges. The stick was the threat of loss of the subsidies to the citizens of states who elected not to create their own exchange - penalizing the CITIZENS of the state. This is what is being said in the video in post #12 above between the 30 second to 39 second marks. Again, the Federal government could not directly penalize the State for not setting up an exchange legally/constitutionally, so it was going to punish the citizens. The goal was to create a political backlash with this loss of subsidies against state officials (governors, legislatures, etc.) who do not support the State-based ACA driven exchanges. This is why ACA says subsidies are available on exchanges 'established by the State' (vs. established by the Federal government). This is the heart of the Halbig case.

- The law was so complex that almost no normal citizen had a chance to understand that if their state did not set up a State created exchange that THEY (the citizen) would lose a subsidy. A subsidies are required to keep the net plan cost (Premium-subsidy) below levels where the law basically EXEMPTS you from the 'mandate' all together. At that point you are not subject to the 'penalty' and thus the law has no teeth to coerce individuals into buying insurance.

- The carrot and the stick above was not enough for 34 States to create exchanges. Unexpectedly, to the architect (Johnathan Gruber) and those who create the law and maybe to the handful who read key parts of it, 2/3s of the States looked at the long term financials and passed.

- Most States passed for a simple reason - the financial models indicated this is not viable. And when you look at the key dates in ACA the states become the proverbial 'holders of the bag' in....2016. At that point they bear all the cost of the exchanges and expanded Medicare cost on their own. The carrot is gone then and they have to live with the complexity and cost of ACA in their own house, with their own budget. And remember, most states have 'must balance budget' laws on their books. Simply - the risk of the cost of this law was too great for states who must balance budgets every year. All the Federal government is to do after 2016 is provide subsidies, so there was to be little cost to the Federal government after 2016. So all the risk long term is on the States in this model and that is primarily why 34 passed.

- In total reaction, the IRS created a new rule to allow for the subsidies for those who buy off the Federal healthcare.gov. Note that it took a new IRS rule since those who knew the law and its intent knew ACA had no provision for this and as noted in the video in #12 above it was intentional act to encourage States to create exchange or face the political wrath of their own citizens. It is not, as now being claimed, a 'typo'.

 

I hope this puts some context to this case and to the background. I have not really researched the 'employer mandate' impacts noted above.

 

On the constitutional aspects here is a good reference:

 

Iowa9- 10 Ppt Presentation

I wouldn't get your hopes up just yet. The DC Circuit decided this case in a 3-judge panel decision. It's almost certainly now to be heard by the full 11-judge court, seven of whom are Democratic appointees and some others who are Republican appointees who have tended to lean more left than intended. They'll overturn and there won't be any more circuit split so the Supreme Court won't see the case.

 

Still, there are other challenges in the works. There are some insanely smart and clever conservative lawyers from the Cato Institute and elsewhere working on bringing this thing down. A circuit split may still happen. They're not done circuit-shopping on this one yet.

 

Agree.

 

It is amazing to see the creativity of the courts when they know the impact. Clearly Halbig, if decided correctly, guts ACA. The court in the Halbig case did read the text in total context and got it right. The other court had to rule that 'State' was not 'State' as a specific State but 'state' as in any government function whatsoever. In some ways the alternate ruling would allow a city, and county or other 'state' entity to set up an exchange.

 

Though the alternate ruling is highly creative and highly interpretive, I see why you say its not over. Most people would say 'capital S, lower-case s' - its just a typo. And that is the argument of those judges.

 

But with the videos above, especially #12, its clear that INTENT was to punish citizens in States that do not implement their own State exchange (and absorb all the cost starting in 2016 and not leave the Federal government with the cost).

 

This will be a wild ride.