Wednesday, November 12, 2014

The Supreme Court To Review 4 Words That Could Kill ObamaCare

Once before, the Supreme Court reviewed the Patient Protection and Affordable Care Act (aka ObamaCare) and found the tax imposed on those not buying healthcare to be constitutional because, under the Constitution, Congress has been explicitly given the right impose taxes.

Now, the Supreme Court has agreed to be the arbiter in whether or not subsidies can be given to low income enrollees who have purchased their insurance through anything but State-run Exchanges. This tune it will all come down to the wording that appears in Title 26 › Subtitle A › Chapter 1 › Subchapter A › Part IV › Subpart C › § 36B of ObamaCare which covers premium assistance (subsidies).  And the words that matter -- those which define who may receive subsidies -- are as follows:
"and which were enrolled in through an Exchange established by the State..."
More importantly, the Court decision will all come down to the last four words of the above line: "established by the State...".  What "established by the State" seems to imply is that any low income enrollee, in any of the 36 States who didn't establish their own Exchanges, aren't eligible for subsidies.  Thus, forcing millions to fully pay their own premiums.

Now, Obama's attorneys are going to argue that it was never the intent of ObamaCare to not give low income insureds a subsidy and, those people shouldn't be punished for a wording error (typo) in the law; arguing that it possibly should have said "for the State" and not "by the State".   This too is a ridiculous argument.  The universality of the subsidies could have been maintained by simply saying "and which were enrolled in through an Exchange" period.  There is no need to add the words "established by the State".

But the wording is very explicit, and those on the other side of this case are going to argue that it was intentional; further arguing that the intent was to punish Republican States for not setting up their own exchanges.  Thus forcing Republican Governors and Legislatures to face the voters over not having provided subsidies for their poorest of people.  Otherwise, the restrictive language of "by the State" would not even be needed.  But, punishment was the intent, and, in 2012, one of the chief architects of the law, MIT Professor Jonathan Gruber made this quite clear when he said this about crafting that part of the law:
"What's important to remember politically about this is if you're a state and you don't set up an exchange, that means your citizens don't get their tax credits-but your citizens still pay the taxes that support this bill. So you're essentially saying [to] your citizens you're going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this."
Clearly, the intent was to use this portion of the law politically. This in much the same way that Democrats tried to defeat those Republican Governors who didn't expand Medicaid under ObamaCare.  However, not one Republican Governor who refused to expand Medicaid lost their governorship in the last election.

My guess is that the high court will side against Obama's Justice Department and rule that the subsidies outside of State exchanges are invalid.  But, in doing so, they may specify that enrollees who are currently receiving those subsidies can continue to receive them -- assuming they are still eligible -- on the basis that they entered into a "good faith" contract with the federal government for their health insurance.  Though, beyond this, ObamaCare will not be able to provide additional subsidies.  Thus, it will be up to the President and the new Republican Congress to fix it.  We'll see how that goes.

Of course, if subsidies are ruled out for non-State Exchanges and the wording of law isn't changed through legislative action, much of the intent of the law -- that to insure most of those who can't afford insurance -- is lost.  As a result, millions won't be able to sign up for ObamaCare because of cost (mostly younger people) and then, those forced to sign up because of need (usually older and/or sicker) will only see their premiums get more expensive.  

Ultimately, ObamaCare will only be seen as a bigger failure than it already is.


Supreme Court to hear Obamacare subsidies case:

26 U.S. Code § 36B - Refundable credit for coverage under a qualified health plan:

Liberal Paul Krugman: Death by Typo The Latest Frivolous Attack on Obamacare:

An ACA Subsidy Smoking Gun? | RealClearPolicy:

Liberal Website: The New Republic: The Supreme Court Is Now a Death Panel:

Americans Vote Against Greater Medicaid Reach:

Good Faith:

Obamacare's Success Depends on Young Buyers:

The Public Disapproval Of ObamaCare Continues:

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