<p>The Supreme Court reconciles inconsistent decisions between the circuits. But first the DC Court of Appeals will be hear the case en banc, that is, the entire bench, not only the three who decided Halbig. That will take months. That’s why I gave a June, 2016 date as a decision time frame if the Supreme Court takes up the case. I’m betting they will since it’s a significant separation of powers decision. The case turns on how far the executive branch, the IRS in this case, can go in ‘interpreting’ what Congress has written into the law.</p>
<p>In this particular case, the issue is not how far the IRS can go in interpreting the law, but how the law ought to be interpreted, given that it is internally inconsistent. </p>
<p>In this case, I assume that nothing will be changed until the Supreme Court either rules or declines the case. But in the usual case, how is the IRS supposed to act when two different courts tell it to do opposite things-- does it always just wait until the Supreme Court rules? </p>
<p>If the DC Circuit takes the case en banc (and it probably will), it may issue a stay, in which case IRS will proceed as normal.</p>
<p>
Not really, because the law is ambiguous (internally inconsistent). I don’t have time to look it up right now, but there are other sections that would make no sense if the law is interpreted the way the plaintiff’s argue. Probably the best place to get a good overview would be to go back and read the IRS’s rationale in the first place (in the federal register) – they generally do a good job of stating the issue and the reasons for their their determination. </p>
<p>Okay I think I have OCD. I know I don’t have time for this, but I can’t let it go:</p>
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</p>
<p>Federal Register V, 77, N.100, @ 30378
<a href=“http://www.gpo.gov/fdsys/pkg/FR-2012-05-23/pdf/2012-12421.pdf#page=9”>http://www.gpo.gov/fdsys/pkg/FR-2012-05-23/pdf/2012-12421.pdf#page=9</a></p>
<p>The ends don’t justify the means.</p>
<p>It is such a mistake to permit court to re-write legislation the way it believes the legislature intended it to be written. The solution is for the legislature to amend its laws which it can do at any time. </p>
<p>Razorsharp, the Fourth Circuit did not “rewrite” the law. Rather, they took a piece of legislation that was internally inconsistent, and they interpreted it. That is the job of the courts: to tell us what the law means and how it applies to a particular fact pattern.</p>
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</p>
<p>No, that’s wrong. Courts are not entitled to “interpret” laws unless they are ambiguous. If the law is clear and unambiguous, it must be enforced unless unconstitutional. This law is clear that the subsidy exists only if a state exchange is involved. The fact that you may like the outcome of expanding it to federal exchanges does not justify the court’s actions. </p>
<p>This type of “interpretation” is judicial activism and it is wrong. It is what lead the Supreme Court to re-write the 2nd amendment to allow every tom dick and harry to carry a weapon as if he is somehow part of a militia. </p>
<p>Do we know how many millions of people got subsidies through the federal exchange because – through no fault of their own – it was the only place they could buy insurance? In other words, how many millions of people will lose their insurance if this ruling ultimately stands? </p>
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</p>
<p>And this law is ambiguous. In one place it talks about how to get subsidy money to people who bought insurance on the federal exchange… which implies that people who bought on the federal exchange are entitled to subsidies. Courts are supposed to interpret the ENTIRE law as it is written, and they are supposed to assume that no section of the law is vacuous.</p>
<p>Six judges have ruled on this issue so far. Four said one thing and two said the opposite. It’s not slam-dunk in the way you suggest. </p>
<p>Regardless of how this particular issue eventually plays out, there is a much larger and louder ticking time bomb in the system. Federal subsidies are schedule to expire in 4 years. How are the States going to make up the difference? How will CA, who has signed up a lot of subsidized individuals, come up with the needed funds to make up for all the lost federal $$ ? It could be that the those States who did not implement an exchange were actually looking into the future and realized they would be implementing an unsustainable new system?</p>
<p>Maybe this is the education Pelosi meant when she made her infamous statement about needing to pass it to find out what’s in it…</p>
<p>Actually, the law is that where a federal law is ambiguous, then it is the job of the regulatory agency to intepret and enforce it - and the courts will adhere the agencies interpretation unless clearly erroneous. The entire tax code is riddled with ambiguities and the IRS has been doing just fine at its job of figuring all the stuff out. </p>
<p>Citation:</p>
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</p>
<p>CHEVRON U.S.A., INC. V. NATURAL RESOURCES DEFENSE COUNCIL
<a href=“CHEVRON, U.S.A., INC., Petitioner, v. NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. AMERICAN IRON AND STEEL INSTITUTE, et al., Petitioners, v. NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. William D. RUCKELSHAUS, Administrator, Environmental Protection Agency, Petitioner, v. NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. | Supreme Court | US Law | LII / Legal Information Institute”>http://www.law.cornell.edu/supremecourt/text/467/837</a></p>
<p>Which subsidies are those, dietz? </p>
<p>The feds are sending the States $$ to help cover the cost of ACA subsidies. This funding source is set to expire in 4 years. So, States that have their own exchanges and are clearly entitled to federal subsidies will stop receiving them (there maybe a phaseout schedule) in 3 years. Not sure what CA can do? They can raise taxes (did you hear the one about Tesla not wanting to build their plant in CA and the call center leaving Attwater due to the business environment?? ) and they raise premiums on the unsubsidized. We already the highest taxed state in the nation.</p>
<p>If it’s ruled that fed $$ will not be issued to States using the Federal exchange, the interesting question is which States will be better off when the federal $$ stop; those who have have a large subsidized population (CA) and thus a large increase in costs, or those who never implemented their State exchanges? 36 States rely on the Federal exchange…they may just wind up being the fiscally responsible set. In the end…at the end of 4 years no States will get federal $$ to assist them in underwriting the costs of ACA. So, assuming it takes the courts 3 years decide not to give fed $$ to Fed Exchange State, all 50 will be in the same boat. </p>
<p>It’s simply an unsustainable system.</p>
<p>Calmom:
While you have been a voice of reason and non-partisanship…I have to say…this is one of the funniest things I’ve read on this thread.</p>
<p>Just asking: do we know the govt will not extend the subsidies?</p>
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<p>My google machine must be broken. Could you post a link?</p>
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</p>
<p>Dietz, you’re mixing up Medicaid and the insurance subsidies. The insurance subsidies are through the (federal) IRS. They cost the states nothing, because the federal government is paying for the entire subsidies and will continue to do so.</p>
<p>Medicaid is run by the states, and paid for partly by the states and partly by the feds. For the newly qualified Medicaid enrollees, the Feds are currently picking up all of the tab. That drops to 95% in 2017, and down to 90% in 2020. </p>
<p>Ok that one I knew about, Fang, thanks. So the eventual phaseout is only 10%, and only for the new Medicaid people. Not 100% of all subsidies to everyone. </p>
<p>@dietz199
No, CF is right, you’ve mixed up the ACA advance tax credit premiums with the Medicaid funding (which doesn’t “expire” in 4 years but does get reduced).</p>
<p>There are no premium “subsidies” – there is a tax credit that mid-to-low earners can claim in advance, with a reckoning up in April when tax returns are filed. It’s pretty much hard-coded into the IRS code – it’s there unless Congress repeals it- which is unlikely, given the hullabaloo that gets raised any time anyone suggests tightening up the tax code. </p>
<p>The issue is who is eligible for that tax credit. There are 3 possible interpretation of the law:</p>
<ol>
<li><p>Everybody who buys an exchange-qualifying policy is eligible for the tax credit in April, whether or not they bought through the exchange or opted to receive advance payment of the credit. </p></li>
<li><p>Only people buying from an exchange are eligible for the tax credit. </p></li>
<li><p>Only people buying from an exchange run exclusively by the state are eligible for the tax credit. </p></li>
</ol>
<p>(Which would create an open question about what would happen in to residents of the 7 states with partnership exchanges - <a href=“https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/partnership-guidance-01-03-2013.pdf”>https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/partnership-guidance-01-03-2013.pdf</a> – it’s pretty tortured logic to say that they wouldn’t be “State” exchanges … and if they are… well then in the event of an adverse ruling from the Supreme Court in the Halbig vs. Burwel case … what’s to stop the federal government from simply offering a streamlined way to allow all the other states to sign up for “partner” status?)</p>
<p>Anyway, the premium tax credit is here to stay. </p>
<p>And I see some potentially bigger, constitutional-level objection to a legal interpretation that would say that residents of some states are entitled to federal tax credits that aren’t eligible to residents of similarly situated taxpayers in other states. That would be a rather tricky can of worms to open . (In other words, if the statute is interpreted to mean #3, that would render the statute unconstitutional-- so just one more reason that such a ruling is unlikely).</p>
<p>More legal stuff-- getting to the heart of the Halbig v. Burwell issue:</p>
<p>
[quote]
Section 1311 of the Act provides that “[e]ach State shall,
not later than January 1, 2014, establish an American Health
Benefit Exchange.” ACA § 1311(b)(1). However, § 1321 of the
Act clarifies that a state may “elect” to establish an Exchange.
Section 1321© further provides that if a state does not
“elect” to establish an Exchange by January 1, 2014, or fails to
meet certain federal requirements for the Exchanges, “the
Secretary [of HHS] shall . . . establish and operate such
exchange within the State . . . .” ACA § 1321©(1). Only
sixteen states plus the District of Columbia have elected to set
up their own Exchanges; the remaining thirty-four states rely on
federally-facilitated Exchanges. <a href=“King%20v.%20Burwell,%20p.%206%20-%20http://www.ca4.uscourts.gov/Opinions/Published/141158.P.pdf”>/quote</a></p>