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September 08, 2011

Error In ObamaCare Drafting May Permit States To Substantially Block ObamaCare On Their Own Initiative

A drafting error in ObamaCare may permit states to mostly gut the law.

Government-created exchanges are places for individuals to shop and purchase health insurance. ObamaCare will require individuals and families to buy insurance, starting in 2014.

Those with incomes at 100% to 400% of the federal poverty level will be eligible for taxpayer funded subsidies a tax credit to help pay for the premium.

It turns out that the legislation isn't so clear, the latest example of what analysts predicted would be a stream of surprises from the mammoth health law.

Section 1311 of ObamaCare instructs state governments to set up an exchange. If a state refuses, Section 1321 lets the federal government establish an exchange in the state.

Yet ObamaCare states that the tax credit is available to people who are enrolled in an "an exchange established by the state under (Section) 1311." It makes no mention of people enrolled in federal exchanges being eligible for the tax credit.

"There is this technical problem in the law," said James Blumstein, a professor at Vanderbilt Law School. "I don't see how you get around that."

This could be a big problem, as some states probably won't set up and run exchanges.

And if the states don't set them up, the fed is entitled to (by the law according to ObamaCare), but the dictate that the states offer 100-400% premium subsidy support would not apply.

The IRS is attempting to modify the law by rule (that is, by bureaucratic fiat).

Thanks to Y-Not.

In the original post, I floated a tip. Gabe will be discussing this in detail later, but his first impression of the claim is that it's wrong. That being the case, I am relegating the tip to the Extended Entry below, a little more caveated now.

It's not a retraction, because I don't know. I do think there will be official word about this soon.



Exclusive Tip: Did the 4th Circuit Completely Botch Their ObamaCare Ruling?


Two caveats: First, I have a single source for this. However, I trust him.

Second, what I'm about to explain is his interpretation of the decision and the relevant law. I am posting this quickly, without verifying this myself, or running it by Gabe (I will add Gabe's commentary as he provides it).

I am expressly putting "get it out first" over "get it right" here. I have a good-faith belief in my source's honesty (and competency), but still, it's just one source.

So, per my tipster:

This is a big error, and there is legal buzz over this.

The 4th Circuit relied exclusively on the doctrine of nullification in rejecting AG Cuccinelli's lawsuit. The doctrine says a state law cannot nullify a federal law.

Here is the problem: That doctrine applies to state laws which are passed after a federal law, in order to, ostensibly, cancel them.

In this case, the 4th Circuit actually misstated the date of the Virginia law which immunized citizens against a mandate to buy insurance. The court claimed they passed this law after ObamaCare was passed, but in fact they seem to have confused two different laws. In fact, the Virginia law was passed before ObamaCare.

Now, the judges could still have ruled that the supremacy clause means the federal law trumps the state law. But they didn't. They specifically relied on the idea of nullification, which is inapplicable in this case, because the state did not nullify (or seek to nullify) a federal law; rather, due to the timing of the passage of the relevant laws, federal law later purported to overturn already-existing state law.

So the ruling contained in their decision is simply wrong. And not "wrong" in the usual meaning of "we disagree on interpretation of the Constitution and precedent," but "wrong" as it "just completely, demonstrably in error, as written."

Assuming I have the facts and law here right (and, again, I am reporting this based on a single source), what is the upshot?

Personally, I think judges are hard-on personality types, by and large, and are not going to correct even a gross error of simple fact.

However, if this is true, then the 4th Circuit's opinion will count for nothing in front of the Supreme Court.

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posted by Ace at 02:09 PM

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