Tuesday, July 22, 2014


Well, this was completely predictable:
A federal appeals court dealt a huge blow to Obamacare on Tuesday, banning the federal exchange from providing subsidies to residents of the 36 states it serves.

A divided three-judge panel on the D.C. Circuit Court of Appeals ruled that the text of the Affordable Care Act restricts the provision of premium tax credits to state-run exchanges. The two Republican appointees on the panel ruled against Obamacare while the one Democratic appointee ruled for the law....
It's likely that this will be reversed on appeal, but don't be too relieved when that happens:
White House spokesman Josh Earnest said the Obama administration will "ask for a ruling from the full DC Circuit" which could potentially reverse the result. He stressed that while the case is pending on appeal, the federal exchange will continue to provide subsidies.

The appeal to the full bench, an en banc vote, would be cast by the three judges who heard the case as well as 10 other judges on the active bench, according to the DC Circuit's rules. Such a vote may be friendlier to Obamacare as it would feature 8 Democratic appointees and 5 Republican appointees. Four of the judges on the court were appointed by President Barack Obama, three of them after Senate Democrats eliminated the 60-vote threshold for most nominations in November to overcome Republican obstruction.
But the case is going to the Supreme Court, and it's only a question of when the Court will overturn it, not whether. The case today turned on the IRS's interpretation that contradictory wording in different parts of the law should be resolved in favor of providing insurance subsidies in states that use the federal exchange as well as in states with their own exchanges. Kevin Drum heard from a lawyer friend who explains what the High Court is likely to make of that:
It's long been a fundamental principle in administrative law that an agency's interpretation of a federal statute that they are charged with enforcing is entitled to judicial deference, unless such deference is unreasonable. Conservatives would prefer that courts not defer to the government because #biggovernment. Thus, they want to weaken the deference standard and Halbig gives them basically a two-fer. Or a three-fer since the agency interpreting the statute is the IRS: Take out Obamacare, knock back the deference standard, and punch the IRS.
So insurance subsidies in states that don't have their own exchanges are doomed; the only question is when the Supremes will say that.

My first thought was that they'll wait until 2017 to do it, so their decision won't arouse liberal and moderate anger at Republicans just before the 2016 presidential election.

But I bet they won't wait that long, because voters don't like Obamacare enough to cast a presidential vote against its enemies. I bet the Supremes will rule sometime in 2016, in order to create chaos for Obamacare just as the election approaches, because they'll assume that Democrats will be blamed for that chaos. At that point, citizens in the majority of states will have their subsidies taken away (the current ruling doesn't do that, pending appeal). When the subsidies are gone, premiums will skyrocket -- and I expect the Court to say that the rest of the law must remain in effect as is unless Congress and the president agree to repeal it. That means that if the president tries to relieve citizens of the mandate to buy health care because he knows they now can't afford unsubsidized policies -- via, say, an executive order -- he'll be told that that's a tyrannical abuse of power and be slapped down by the courts.

Democrats, of course, will want to try to suspend the mandate in states without subsidies -- but Republicans in Congress won't go for that. They'll say that if Democrats want to relieve the burden on these citizens, they'll have to go along with a repeal of the entire health care law.

And that's what will happen. The only question is whether the repeal law will be signed by President Obama, President Hillary Clinton, or President Rick Perry.

The humiliation of that repeal process really will the Schoolyard Bully Party grinding the 98-Pound Weakling Party's face in the dirt and ordering it to beg for mercy. But that's the nature of our politics now, isn't it?


Victor said...

"I bet the Supremes will rule sometime in 2016, in order to create chaos for Obamacare just as the election approaches, because they'll assume that Democrats will be blamed for that chaos."

Sadly, I think that's so true!

If "The Fascist Five" are still on the SC in the next few years, I can see the smirk's on Alito's, Thomas's, Kennedy's, and Robert's faces, while "Fat" Tony Scalia makes jokes and holds 'court!'


Yastreblyansky said...

So now there's already another ruling upholding the law, and several more cases in the pipeline. I think it's a rerun of the 2012 tax penalty case and the law will not be overturned; if Kennedy is too baffled, Roberts will step in again and write some mystifying argument allowing him to side with the liberals.

And you know why? For better or worse, there's too much money lined up on the side of the ACA, from the insurance companies and the health industry. And that, in turn, explains why we can't have single-payer, because they would indeed have been able to take that away from us. This they can't, because the corporations have "skin in the game".

Steve M. said...

If the law is saved, you're right -- it'll be because Big Medicine wants it. I see that as a possibility, but I still lean toward overturn, because so many other plutocrats want overturn.

And this court is so good at cherry-picking that I didn't even think today's other ruling was worth mentioning. Justices who were even half-trying to be impartial would take all the lower court rulings into account, but these guys won't. They (or at least four of them) already know what they want to do -- though it's possible that I'm wrong about what that is.

aimai said...

You bet your sweet ass Big Medicine wants it. But in any event there is a workaround in the works. Josh MM is arguing that the Obama people are already working on a couple of different versions of this:
1) Giving the websites to the individual states to manage and then it becomes the "state exchange."
2) Having the states declare that the federal exchange is their state exchange.
3) some other format which then satisfies the new nonsense ruling until we can get a new Democratic house in to rewrite the legislation.

I actually don't think this will stand because it once again throws the Republican "kill them all" agenda into such stark relief. Its one thing to kill the entire exchange system at one go but this only hurts some states and only if the states let it by not accepting the workaround. And to the extent that they already have let citizens sign up on the federal exchange and receive subsidies they will be facing furious voters who have accessed a benefit that they will be eager to keep.

Its one thing to screw over the poor in individual red states. Its another to actively snatch something back from people who have already aquired it.

Unknown said...

Heck, at this point I am okay with this. Let's stop giving the red states more blue state money

I am sick of the red states bitching about the social contract, and talking about how they are real America while the blue states, who pay their bills are branded as non-Americans.

All te while they use these federal subsidies to steal jobs from blue states while giving the corporations massive subsidies (again funded by blue state federal dollars). Once those red states steal all the jobs by becoming a Bangladeshi sweatshop it wot be very long before they decide to end te social compact either.

Prime example was seeing Louisiana congress critters complaining about giving Sandy affected states money when those mofos have been living off those states money pretty much all this while.

biz5th said...

In 2012 Republicans tried to make the election about Obamacare, and Democrats held the White House and Senate while winning the popular vote in the House. Last year in Virginia the Gubernatorial election was largely a referendum on Obamacare, and a very mediocre Democrat won. Mitch McConnell is doing everything he can to obscure his opposition to Obamacare/Kynect.

At this point, most businesses have implemented any changes required under the law - and their employees like them.

In addition, huge portions of the law that don't directly affect insurance have already been implemented - undoing those changes would be almost impossible.

Repeal of the law is not going to happen.