Sponsored Content
ę Mollie Hemmingway: Hey, How Come Film Critics Savaged "The Passion of the Christ" for Its Brutal Depiction of Violence, But Praise "12 Years a Slave" for the Same Sort of Brutality? | Main | Democrat Senators Rip Golden Globes For Featuring Incidental Shots of Celebrities Puffing on E-Cigs Ľ
January 15, 2014

Federal Court: No, Obamacare Doesn't Forbid Subsidies to Those Who Buy Insurance on the Federal Exchanges

This is Gabe's favorite case, our best-and-last-hope legal challenge to Obamacare -- and a district court judge (of course) found against those seeking to derail Obamacare.

Allah's summary is very good. Here's the theory the lawsuit is predicated upon:

Section 1311 of the law authorizes the states to develop their own ObamaCare exchanges. Section 1321 says that, if a state declines, the feds can step in and develop their own exchange for consumers in that state instead. Thatís how we ended up with the technological marvel that is Healthcare.gov. The rub comes in Section 1401, which authorizes tax credits, i.e. premium subsidies, for anyone whoís in ďan Exchange established by the State under 1311″. Wait a sec ó does that mean that only people enrolled in state-run exchanges get subsidies? If people enrolled in the federal exchange get them too, why doesnít Section 1401 say ďan Exchange established by the State under 1311 or the federal government under section 1321ď?

Thereís a simple explanation, say critics like Jonathan Adler: Congress intentionally limited subsidies to state-run exchanges to give the states an incentive to set up their own exchange. The feds didnít want to build Healthcare.gov; theyíd prefer that each state deal with this themselves. But since they canít force states to do the federal governmentís bidding, the best they can do is tack on monetary inducements to get them to play ball. Thatís where the subsidies come in..... Read Adlerís post about this from December 2012 citing a colloquy that Max Baucus, the so-called architect of ObamaCare, had on this subject with John Ensign while the law was still being drafted. Thatís the proof that Congress intended to distinguish between state-run exchanges and the federal exchange on subsidies. Itís not a drafting error or the result of Congress, to paraphrase Nancy Pelosi, passing the bill only to find out later whatís in it. The subsidies restriction for states was always supposed to be in there.

That's a pretty strong case. The language of the law itself limits the subsidies to state exchanges. If there is any doubt that this was intended, one can look to the legislative history: And on this point, the architect of Obamacare did indeed suggest his intent to so limit the subsidies to the state exchanges.

Jonathan Adler explains this-- and it's requires a bit of background to understand the exchange between Baucus and John Ensign. Ensign questions how the Senate Finance committee has the jurisdiction -- authority -- to demand that states change their insurance laws under Obamacare. Baucus replies the jurisdiction is afforded by the "tax credits" (subsidies) to be supplied to the states under Obamacare.

Baucusís response is hardly a model of clarity. But I can see no possible interpretation other than Baucus is admitting that (A) the statute makes tax credits conditional on states establishing an Exchange, and therefore does not authorize tax credits through federal Exchanges, and (B) that this feature was essential for the Senateís tax-writing committee to have jurisdiction to legislate in the area of health insurance.

Nevertheless, a district court decided that "duly-enacted law" is a pretty flexible thing and that it's all close enough for government work.

I hope this will be reviewed by the Supreme Court, eventually. It requires, IIRC, four votes for the court to grant certiorari (discretionary review, granted at the whim of the court). One might imagine we'll have four votes for that, as four men voted to strike down Obamacare.

However, we could lose some of those votes: Kennedy could, hypothetically, have felt that the first Obamacare challenge was strong enough to merit striking the law, but might feel this latest challenge is too weak for that, and pass on granting cert. And all it takes for this ruling to stand is the appeals court and then the Supreme Court to simply decline to review it.

digg this
posted by Ace at 05:39 PM

| Access Comments

Recent Comments
Archer: "Basquequick is the Spanish version of Bisquick. ..."

[/i][/b]andycanuck (Vwz3I)[/s][/u]: "Looks like a less comical final episode of Mary Ty ..."

Lizzy[/i]: "Yiiiiikes, that's oddly grim. ..."

Red Turban Someguy - The Republic is already dead!: "36 Hmmmm, before looking: Spanish Civil War? Post ..."

bear with asymmetrical balls - an election is simply a festival for the majority: "[i]In 1960 he returned to Spain, where he began to ..."

redridinghood: "Headed to a warmer climate. ..."

kallisto: "the depiction of the children shows a remarkable l ..."

Bulgaroctonus : "Evacuation of the Pyrenees Alternate title: Bi ..."

nurse ratched : "Cold and bleak. I like it though. Needs some ..."

Stuff Michael Brown Never Said: "HANDS UP, DON'T SHOOT! ..."

red speck: "I thought painters had kinda figured out the whole ..."

Flyover: "Although not as sad as an "evacuation," that's kin ..."

Recent Entries

Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64