US Supreme Court agrees to hear new challenge to Obama health care law
NOVEMBER 7, 2014, 12:58 PM LAST UPDATED: FRIDAY, NOVEMBER 7, 2014, 11:30 PM BY ROBERT BARNES THE WASHINGTON POST | WIRE SERVICE
WASHINGTON — The Supreme Court announced Friday that it will hear the most serious challenge to the Affordable Care Act since the justices found it constitutional more than two years ago: a lawsuit targeting the federal subsidies that help millions of Americans buy health insurance.
More than 4 million people now receive the subsidies, and the Obama administration contends they are essential to the act by making insurance more affordable for low- and middle-income families.
But challengers say the administration is violating the plain language of the law. They are represented by the same conservative legal strategists who fell one vote short of convincing the court the law was unconstitutional the last time around.
The question in this challenge is whether the subsidies should be available to all Americans who qualify, or only to those who purchase insurance through exchanges “established by the state.”
About a third of the states have created exchanges, and the challengers say the subsidies should be available only in those places. As the law authorizes, federal authorities have stepped in to establish exchanges where the states have refused.
Some doctors wary of taking insurance exchange patients
Now that many people finally have health insurance through the Affordable Care Act exchanges, some are running into a new problem: They can’t find a doctor who will take them as patients.
Because these exchange plans often have lower reimbursement rates, some doctors are limiting how many new patients they take with these policies, physician groups and other experts say.
“The exchanges have become very much like Medicaid,” says Andrew Kleinman, a plastic surgeon and president of the Medical Society of the State of New York. “Physicians who are in solo practices have to be careful to not take too many patients reimbursed at lower rates or they’re not going to be in business very long.”
Kleinman says his members complain rates can be 50% lower than commercial plans. Cigna and Aetna, however, say they pay doctors the same whether the plan is sold on an ACA network or not. United Healthcare spokeswoman Tracey Lempner says it’s up to their physicians whether they want to be in the exchange plan networks, which have “rates that are above Medicaid.” Medicaid rates are typically below those for Medicare, which in turn are generally lower than commercial insurance plans.To prevent discrimination against ACA policyholders, some insurance contracts require doctors to accept their exchange-plan patients along with those on commercial plans unless the doctors’ practices are so full they simply can’t treat any more people. But lower reimbursement rates make some physicians reluctant to sign on to some of these plans or accept too many of the patients once they are in the plans.
Unable to Meet the Deductible or the Doctor (Gee Wiz)
By ABBY GOODNOUGH and ROBERT PEAROCT. 17, 2014
Patricia Wanderlich got insurance through the Affordable Care Act this year, and with good reason: She suffered a brain hemorrhage in 2011, spending weeks in a hospital intensive care unit, and has a second, smaller aneurysm that needs monitoring.
But her new plan has a $6,000 annual deductible, meaning that Ms. Wanderlich, who works part time at a landscaping company outside Chicago, has to pay for most of her medical services up to that amount. She is skipping this year’s brain scan and hoping for the best.
How Much Will Obamacare Cost? Bet on ‘More Than Expected’
Jason Keisling & Nick Gillespie | October 17, 2014
As the nation prepares for the second enrollment period under The Affordable Care Act in November, there is officially no way of figuring out what Obamacare is going to do to federal deficits compared to the estimates used to push the program through Congress.
Back in 2009, it was really important to President Obama that people understand he would not “sign a plan that adds one dime to our deficits—either now or in the future. Period.” He sold the plan as costing about $938 billion in its first decade of operation (2010 through 2019) but saving about $143 billion overall because of the various taxes and other revenue it raised. A 2012 Congressional Budget Office (CBO) report figured that Obamacare would shave $109 billion off the deficit between 2013 and 2022.
This past June, however, the CBO said it will no longer try to estimate the law’s effects on the deficit. There have been too many delays, postponements, modifications, you name it, to the original bill. “Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the Affordable Care Act is not possible,” the CBO concluded.
So what’s going on? The deficit for fiscal year 2014, which ended on September 30, came in at “just” $483 billion and 2.8 percent of GDP, the lowest figures in years. President Obama was quick to say it was because of his signature health-care reform plan. “Healthcare has long been the single biggest driver of America’s future deficits,” reports The Hill. “Healthcare is now the single biggest factor driving those deficits down.”
At the same time, the CBO (and everyone else) expects deficits to start growing again in fiscal 2016, so it’s a bit premature to break out the bubbly just yet. Senate Republicans have just released a report based on CBO data claiming that Obamacare will end up adding $300 billion to federal deficits between 2015 and 2024.
The Republican report is ultimately a political document, so its methods and conclusions deserve to be taken with more than a few grains of salt. But if past experience with massive government-run health care programs is any indicator, the odds are high that Obamacare will end up costing way more than it was supposed to.
Thanks to Obamacare, Health Costs Soared This Year
Robert Moffit / October 13, 2014
On November 15, open enrollment in the Obamacare exchanges begins again. Before the second act of our national healthcare drama commences, let’s review what we’ve learned in Act I.
For starters, everyone now knows that federal officials are challenged when it comes to setting up a website. But they’ve demonstrated the ability to dole out a huge amount of taxpayers’ money for millions of people signing up for Medicaid, a welfare program. And they’ve proved they can send hundreds of millions of federal taxpayers’ dollars to their bureaucratic counterparts in states, like Maryland and Oregon, that can’t manage their own exchanges. But there are many other lessons to be gleaned from Year One of Obamacare. Here are three of the most important ones.
1. Health costs jumped—big time. Huge increases in deductibles in policies sold through the exchanges were a big story in Florida, Illinois and elsewhere. While the average annual deductible for employer-based coverage was a little over $1,000, the exchange deductibles nationwide normally topped $2,000.
Notwithstanding President Obama’s specific promise to lower the typical family premium cost by $2,500 annually, premium costs actually increased. D2014 data for the “individual market” shows that the average annual premiums for single and family coverage rose in the overwhelming majority of state and federal health-insurance exchanges all around the country. In eleven states, premiums for twenty-seven-year-olds have more than doubled since 2013; in thirteen states, premiums for fifty-year-olds have increased more than 50 percent. For the “group market,” the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) estimated on February 21, 2014, that 65 percent of small firms would experience premium-rate increases, while only 35 percent were expected to have reductions. In terms of people affected, CMS estimated 11 million Americans employed by these firms would experience premium-rate increases, while about 6 million would see reductions. So much for “bending the cost curve down.”
2. The law reduced competition in most health-insurance markets. A limited analysis by the Kaiser Family Foundation found that in 2014, large states like California and New York were more competitive, but Connecticut and Washington were less competitive. The Heritage Foundation conducted a national analysis and found that between 2013 and 2014, the number of insurers offering coverage on the individual markets in all fifty states declined nationwide by 29 percent. On a county level, 52 percent of U.S. counties had just one or two health-insurance carriers. In 2014, at least, the law did not deliver on its promise of more personal choice and broader competition.
3. We still don’t know for sure how many people are actually insured. Following the disastrous October 2013 Obamacare “roll-out,” the Congressional Budget Office (CBO) estimated that about 6 million (rather than 7 million) would enroll in the exchanges. Last April, administration officials reported that they reached and surpassed their goal, enrolling over 8 million people in the health-insurance exchanges. They then declared the health-care debate, like the Iraq War, “over.”
That declaration appears to be premature. The administration now concedes that there are 700,000 fewer persons in the exchanges. Of course, we can expect some attrition. But exchange enrollment is not the same as insurance coverage. CBO said it best: “The number of people who will have coverage through the exchanges in 2014 will not be known precisely until after the year has ended.” Exactly.
Beyond the seemingly endless surveys, estimates and guesstimates, we do have some raw data. Between October 1, 2013, and March 31, 2014, there was a net increase in individual coverage of 2,236,942, but there was a net decrease in group (employment-based) enrollment: it fell by 1,716,540. Enrollment in Medicaid and the Childrens’ Health Insurance Program (CHIP) increased by about 5 million over that same period. We’ll know more later, as CBO said, especially how many Americans are losing their employment-based coverage.
Who enrolls is also crucial. In 2013, Obama administration officials said that their goal was for young adults between the ages of eighteen and thirty-four to account for 40 percent of exchange enrollments. On April 17, 2014, the White House announced that only 28 percent of those enrolled through the federally administered exchanges were between eighteen and thirty-four years of age—the crucial age bracket for a robust and stable insurance pool—but that 35 percent of the total enrollees were under the age of thirty-five. That made it sound as though the program was fairly close to reaching its target. But thanks to excellent reporting by Politico, we learned that the bigger number included children enrolled in the exchanges. Nice try.
Maybe 2015 will bring better news for Obamacare. But don’t bet on it.
On its one-year anniversary, ObamaCare gets an ‘F’ By Michael D. Tanner September 28, 2014 | 12:00am
This Wednesday will mark one year since enrollment in ObamaCare began. What began with the disastrous rollout of healthcare.gov has ended with the health law’s supporters claiming victory.
It is true that some of the worst predictions have not yet come true. Yet. But in the last year we’ve also seen plenty of bad news for consumers, providers, employers and taxpayers.
A report card:
The Uninsured:Earlier this month, Centers for Medicare & Medicaid Services director Marilyn Tavenner testified that roughly 7.3 million people signed up for insurance through the exchanges. That’s down from early estimates of 8.1 million, because nearly 800,000 of those who initially enrolled have stopped or never paid their premiums. A bigger question is how many enrollees were previously insured and were just changing plans. Overall, the best estimates suggest that roughly 8 million people gained insurance under ObamaCare, but roughly half of those were enrolled in Medicaid (outside of the exchanges), which isn’t really health-care reform so much as adding people to government welfare. And it still leaves 41 million American adults uninsured. We spent billions to move the needle a tick. Grade: C
Your Plan : Despite the president’s assurances to the contrary, roughly 6 million Americans were kicked off their insurance because their plans failed to offer a lengthy-enough maternity stay, didn’t provide sufficient drug and alcohol rehabilitation benefits or otherwise fell short of the insurance that federal bureaucrats thought that they should have. This includes more than 100,000 New Yorkers. Nearly all eventually found other insurance, but a new study from the National Center for Public Policy Research found that, on average, ObamaCare plans were worse than the plans they replaced, in terms of both providers covered and cost-sharing. A new wave of cancellations is about to begin as well. Those New Yorkers who managed to renew their noncompliant plans prior to the effective start date for ObamaCare last year should start receiving cancellation notices any day now. Some people may not even be able to keep the plans that replaced the plans they couldn’t keep the first time. In several states, insurers have dropped plans that they offered on the exchanges or even withdrawn from the market altogether. And if that was not bad enough, Americans with employer-based insurance may find out their insurance has to be changed starting next year. Grade: F
Premiums: If judged against President Obama’s promise that health-care reform would save us all at least $2,500 through lower premiums, ObamaCare deserves an F. But premium increases have been less bad than expected, especially in states like New York that already had highly regulated insurance markets. Last year, New Yorkers in the individual market saw a reduction in their premiums, but only because the individual market was already in such terrible shape. In states where the individual market was not already dysfunctional, there were significant premium increases. This year, New Yorkers can expect premium increases averaging roughly 6 percent for individual plans and almost 7 percent for small business. Grade: C+
A recent editorial declared a victory for Obamacare as evidenced by a Robert Wood Johnson Foundation survey showing a substantial reduction in the number of uninsured New Jersey residents over the past year.
The result, while positive, is not all that surprising given that under the law individuals must purchase coverage or face a financial penalty. In addition, the government doled out taxpayer-funded subsidies and expanded eligibility under Medicaid. I suppose there aren’t too many problems that can’t be solved by throwing money at them — except perhaps deficits.
The result, while positive, is not all that surprising given that under the law individuals must purchase coverage or face a financial penalty. In addition, the government doled out taxpayer-funded subsidies and expanded eligibility under Medicaid. I suppose there aren’t too many problems that can’t be solved by throwing money at them — except perhaps deficits.
The editorial does not report on other effects of Obamacare: cancellation of policies for individuals who had to then purchase new policies at vastly higher premiums, elimination of choice among coverage (Uncle Sam knows what you need), and an overall reduction in the availability and quality of health care.
Recent downward corrections to the enrollment figures due to non-payment of premiums portend even higher premium costs next year unless the administration bails out insurers for their losses with even more taxpayer money. No one disputed the goal of reducing the ranks of the uninsured. The quarrel was always with the approach.
Until this ill-conceived law is repealed, we have to live with its consequences, both intended and unintended. To paraphrase the Greek King Pyrrhus, any more victories like this, and we will be ruined.
American health care is in upheaval. On one side, overhead and malpractice insurance costs keep increasing, while salaries stagnate. On the other, patients believe that expensive drugs are better, more people are on government-run insurance that pays less, while private insurance fights every claim.
Now doctors spend most of their time trying to game the system, requiring endless paperwork, protracted bureaucratic battles and “treadmill medicine,” seeing as many patients as possible in as little time. This problem will only intensify as millions join the ranks of the insured under the Affordable Care Act.
Modal Trigger
Dr. Sandeep JauharPhoto: Maryanne Russell
In this self-perpetuating cycle, doctors spend most of their time as businessmen — and care suffers.
It’s no wonder then that doctors no longer enjoy their jobs, explains Jauhar, director of the Heart Failure Program at Long Island Jewish Medical Center and author of “Doctored: The Disillusionment of an American Physician” (Farrar, Straus and Giroux), out now.
“This book is meant to be like the scene in ‘Network’ when [Howard Beale] opens the window and yells, ‘We’re not going to take it anymore,’ ” Jauhar says in an interview with The Post.
As investors buy struggling hospitals, big change comes to New Jersey health care
AUGUST 23, 2014, 8:38 PM LAST UPDATED: SUNDAY, AUGUST 24, 2014, 7:05 AM BY LINDY WASHBURN STAFF WRITER THE RECORD
Bayonne Medical Center wasn’t just bragging about efficiency when it posted a big digital clock on a highway billboard a few years ago to show the real-time waits in its emergency room. It wanted patients to come to its ER. Lots of patients.
Big change comes to New Jersey health care
It didn’t matter if the hospital was in the patient’s insurance network. On the contrary, to the businessmen who had recently purchased the medical center, those “out-of-network” patients held the key to reversing Bayonne’s fortunes.
These owners, who bought the hospital in bankruptcy, had found an unintended — and very profitable — consequence to a state regulation that was designed to protect patients with urgent medical needs. While the regulation required insurance companies to pay for emergency treatment at hospitals where their coverage wasn’t normally accepted, it did nothing to control the size of the bills the hospitals could submit to those insurers.
And that loophole enabled Bayonne, which had ended its contracts with some of the state’s largest insurers, to charge those higher out-of-network rates. The result was striking: The strategy contributed to a $17 million operational profit within two years of its 2008 takeover.
WASHINGTON (AP) — The Obama administration says the clock is ticking for hundreds of thousands of people who have unresolved issues affecting their coverage under the new health law.
Obamacare Continues to Under Perform Edmund Haislmaier / August 02, 2014
Edmund F. Haislmaier is an expert in health care policy and markets at The Heritage Foundation — and is frequently asked to assist federal and state lawmakers in designing and drafting health reform proposals and legislation.
Obamacare’s initial open-enrollment period ended in mid April. The big question since then has been, “What were the results?”
Hard data have been lacking — until now. My colleague Drew Gonshorowski and I have just finished reviewing insurance-market data from the first quarter of 2014, and we can report that Obamacare’s results are not very impressive.
Certainly they’re not as impressive as the Obama administration would like you to believe. On May 1, outgoing health and human services secretary Kathleen Sebelius triumphantly reported that 8 million people had picked a plan through the exchanges during open enrollment. Yet, since then, HHS has assiduously refused to provide figures for how many of those 8 million actually completed the transaction. Nor has HHS provided any breakout of exchange sign-ups by those who were previously uninsured versus those who were already insured but obtained replacement coverage through the exchanges.
Several prominent organizations — specifically, the Rand Corporation, the Kaiser Family Foundation, the Urban Institute, McKinsey & Company, and Gallup — have attempted to fill the information gap with their own coverage surveys. Yet even well-constructed surveys have limitations and, at best, can offer only approximate answers. Analysts and commentators (on both the left and the right) have also weighed in with varying guesstimates and interpretations.
Now, newly available health-insurance enrollment data provide a clearer and more comprehensive picture of the changes in coverage during the initial implementation of Obamacare. Unlike estimates based on survey results, the newly available data consist of actual enrollment counts for the private market, Medicaid, and the Children’s Health Insurance Program (CHIP).
The data on private coverage come from quarterly reports that insurers file with state regulators. At this point, only the first installment (data from the first quarter of 2014) of what we need for a full assessment is available. Because of delays in processing enrollments and a surge in exchange applications in March, we must wait for second-quarter data to see the complete picture.
Nonetheless, this first tranche of data is highly revealing. Drew and I present the numbers and analyze them in more detail in our new report, but here are three key takeaways from the data for the six-month period of October 1, 2013, through March 31, 2014:
– Net enrollment in the individual-coverage market grew by 2,236,942 individuals, while net enrollment in employer group coverage declined by 1,716,540 individuals.
– The decline in employer-sponsored coverage offset 77 percent of the gain in individual-market coverage, for a net increase in private-market coverage of only 520,000 individuals during the period.
– Medicaid and CHIP enrollment reports from the Centers for Medicare and Medicaid Services (CMS) show that enrollment in those programs increased by about 5 million individuals during the same six-month period, with 87 percent of those gains occurring in the 26 states (plus the District of Columbia) that elected to adopt Obamacare’s expansion of Medicaid to able-bodied adults.
The biggest piece of the puzzle still missing is the coverage status of the 3,777,438 individuals whom HHS reported as picking an exchange plan between March 1 and the close of open enrollment in April. Few, if any, of them would have had their coverage activated before the end of March, so those who actually gained coverage will show up in the second-quarter data, along with anyone who selected an exchange plan earlier but had his enrollment delayed beyond March due to the exchanges’ software problems.
Even so, this first installment of enrollment data marks a shift from speculation to reality in the ongoing public debate over Obamacare. It also offers guidance on what to expect next.
Assuming no further erosion in employer group coverage, and further assuming that all the individuals who picked an exchange plan during the last two months of open enrollment actually obtained coverage, it now appears that the upper bound for any net increase in private coverage during the first year of Obamacare will be in the neighborhood of 5 million individuals. Of course, those two assumptions are big ifs, so the final figure might well be lower.
We also know that Medicaid enrollment continues year-round. CMS reported that a further 1.1 million individuals were added to the Medicaid rolls in April. Thus, it’s pretty safe to project that when the final figures for Obamacare’s first year are in, the Medicaid expansion will be responsible for over half of any net increase in health-insurance coverage. In that regard, it should be noted that the Medicaid expansion population consists of able-bodied working-age adults, 82 percent of whom don’t have dependent children and 52 percent of whom are ages 19 to 34.
So far, this is not a particularly impressive performance — unless, of course, you believe that giving several million able-bodied, working-age adults substandard government health coverage as a consolation prize for remaining unemployed or underemployed — and doing so at considerable disruption and expense for everyone else — constitutes a significant achievement or an acceptable substitute for pro-growth economic policies.
Obamacare Architect Jonathan Gruber Admited in 2012 That Subsidies Were Limited to State-Run Exchanges
Earlier this week, a three-judge panel in the D.C. Circuit Court ruled that, contrary to the Obama administration’s implementation and an Internal Revenue Service rule, Obamacare’s subsidies for private health insurance were limited to state-run health exchanges.
The reasoning for this ruling was simple: That’s what the law says. The section dealing with the creation of state exchanges and the provision of subsidies states, quite clearly, that subsidies are only available in exchanges “established by a State,” which the law expressly defines as the 50 states plus the District of Columbia.
Obamacare’s defenders have responded by saying that this is obviously ridiculous. It doesn’t make any sense in the larger context of the law, and what’s more, no one who supported the law or voted for it ever talked about this. It’s a theory concocted entirely by the law’s opponents, the health law’s backers argue, and never once mentioned by people who crafted or backed the law.
It’s not. One of the law’s architects—at the same time that he was a paid consultant to states deciding whether or not to build their own exchanges—was espousing exactly this interpretation as far back in early 2012, and long before the Halbig suit—the one that was decided this week against the administration—was filed. (A related suit, Pruitt v. Sebelius, had been filed earlier, but did not challenge tax credits within the federal exchanges until an amended version which was filed in late 2012.) It was also several months before the first publication of the paper by Case Western Law Professor Jonathan Adler and Cato Institute Health Policy Director Michael Cannon which detailed the case against the IRS rule.
Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the Massachusetts health law that was the model for Obamacare, was a key influence on the creation of the federal health law. He was widely quoted in the media. During the crafting of the law, the Obama administration brought him on for consultation because of his expertise. He was paid almost $400,000 to consult with the administration on the law. And he has claimed to have written part of the legislation, the section dealing with small business tax credits.
This Circuit Court’s Obamacare Decision Could Have Huge Consequences
Elizabeth Slattery / @EHSlattery / July 22, 2014
Elizabeth H. Slattery focuses her research on issues such as the scope of the Constitution’s commerce clause, equal protection, federal preemption and election laws as senior legal policy analyst in The Heritage Foundation’s Edwin Meese III Center for Legal and Judicial Studies.
Today the D.C. Circuit Court of Appeals dealt a blow to the Obama administration, ruling that the language of the Obamacare law only established federal subsidies for individuals enrolling in state-run health care exchanges, not for individuals enrolling in federal-run state-level health care exchanges.
Since 36 states (the administration might deem it 27 states based on nine states’ cooperation with federal exchanges) have opted not to run their own exchanges, this ruling has significant implications for the practical implementation of Obamacare.
Section 36B of the Internal Revenue Code (enacted as part of Obamacare) allows the IRS to make subsidies available to residents who buy health insurance through a state-run exchange. While lawmakers assumed every state would open an exchange, 36 states chose not to do so. In those states, the federal government established exchanges, and the IRS claimed it could extend the subsidies to individuals purchasing insurance through the federally-run exchanges.
In a 2-1 decision, the D.C. Circuit determined that the IRS’s “interpretation” violated the plain language of Section 36B: the law “unambiguously restricts the Section 36B subsidy to insurance purchased on Exchanges established by the State.” The government argued that it was “standing in the state’s shoes” when it opened exchanges in 36 states, but as the court noted “section 36B plainly distinguishes Exchanges established by states from those established by the federal government.”
The IRS’s revision of Section 36B “significantly increases the number of people who must purchase health insurance or face a penalty.” Further, since the employer mandate’s penalties depend on the availability of credits, this expansion “exposes employers [in states without state-run exchanges] to penalties and thereby gives the employer mandate broader reach.”
The government urged the court to look to the broader goal of Obamacare—near-universal coverage for all Americans—that would be impossible without these subsidies (in addition to the nondiscrimination requirements applying to insurers and the individual mandate to purchase insurance). Yet the court was unpersuaded. In the face of unambiguous statutory text, “there must be evidence that Congress meant something other than what it literally said” in order for the court to depart from the statute’s plain meaning. The government failed to meet this burden, and the court was unwilling to overstep its bounds.
A dissenting judge argued that the court bought the challengers’ “myopic construction” of Section 36B without “regard for the overall statutory scheme,” and defied the will of Congress.
The Fourth Circuit Court of Appeals also ruled on this same issuetoday. That court found the language of Section 36B is ambiguous and allowed the IRS “interpretation” to stand. A concurring judge helpfully pointed out that when Section 36B says ““[E]stablished by the State” this “indeed means established by the state – except when it does not…”
The judicial branch must respect the separation of powers, and it is for Congress—not the courts or the executive branch—to create the laws. The D.C. Circuit recognized that the IRS’s attempt to rewrite the law (which is the Obama administration’s signature move) was improper:
“Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process.”
The D.C. Circuit stayed its decision pending rehearing by the full D.C. Circuit. These cases address only one of many problems with theunaffordable, unworkable, and unfair Obamacare. The consequences of this decision will mean higher costs for individuals who purchase insurance through federally-run exchanges. The Obama administration announced it will appeal to the full D.C. Circuit. Given the split between two federal appellate courts, Obamacare may be heading back to the Supreme Court next term.
Court Rules That Subsidies in Obamacare’s Federal Exchange are Illegal, Dealing Huge Legal Blow to Health Law Peter Suderman|Jul. 22, 2014 10:33 am
Whitehouse.govThe U.S. Court of Appeals for the D.C. Circuit delivered a huge blow to Obamacare this morning, ruling that the insurance subsidies granted through the federally run health exchange, which covered 36 states for the first open enrollment period, are not allowed by the law.
The highly anticipated opinion in the case of Jacqueline Halbig v. Sylvia Mathews Burwellreversed a lower court ruling finding that the federally run exchange did have the authority to disburse subsidies.
Today’s ruling vacates the Internal Revenue Service (IRS) regulation allowing the federal exchange to give subsidies. The large majority of individuals, about 86 percent, in the federal exchange received subsidies, and in those cases the subsidies covered about 76 percent of the premium on average. The essence of the court’s ruling is that, according to the law, those subsidies are illegal. (According to an administration official, however, the subsidies will continue through the appeals process.)
The court’s ruling agreed with challengers who argued that the plain language of the law, which in multiple instances limits subsidies and credits to any “Exchange established by the State,” does not allow subsidies to be disbursed in exchanges where a state declined to establish its own exchange and is instead run by the federal government. Basically, the federal government cannot step in and create and run an exchange that is somehow still an exchange established by a state.
“We conclude that appellants have the better of the argument: a federal Exchange is not an ‘Exchange established by the State,’ and [the relevant section of the law] does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges,” the decision says.
The Sad Story of Obamacare: Reason’s In-Depth Treatment of the Health Care Fiasco That Won’t Go Away
J.D. Tuccille|Jul. 1, 2014 12:03 pm
It fills the headlines, it chills the public, it elevates your premiums, and it dogs hopes for decent health care coverage. That’s right, we’re talking about Obamacare—the government scheme that refuses to die, despite every sign that it’s doing itself in (and maybe taking us with it). Reason writers look at the history of this policy monstrosity, the laughable efforts by its promoters to make it palatable, and the deep flaws in the way it has been crafted and implemented.
Even better, we look at alternative approaches and innovations that promise better health care for the future. And we look at ways of presenting those alternatives to a public that wants care, but has certainly grown jaded about pie-in-the-sky promises.
