Halbig and the Nonchalance of Six Small Words

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The psychology of legislative draftsmanship involved in the six words at stake in Halbig v. Burwell—“an exchange established by the State”—reflects a short-odds gamble that did not hit. The bettors first wanted the IRS to rescue them from the consequences, and now they want the courts to do it.

The gamble was that states, enticed by subsidies for their citizens or intimidated by the threat of losing Medicaid funds, would establish healthcare exchanges. The Obama administration is surely right that the whole idea of the Affordable Care Act (ACA) was that such subsidies be provided, and that the consequences that have ensued from those six small words were probably unintended.

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Halbig and the Possibility of Supreme Court Cert

Now that the D.C. Circuit has granted rehearing en banc for the Halbig case, there is speculation about whether the case will make it to the Supreme Court.  Halbig, of course, is the case addressing whether federal health care exchanges are allowed to receive federal subsidies.

The defenders of the subsidies for the federal exchanges are hopeful that the case does not reach the Supreme Court.  Before the D.C. Circuit granted rehearing en banc, there was a split between the circuits, with the D.C. Circuit ruling against the legality of the subsidies and the Fourth Circuit ruling in favor of them.  Cert seemed assured.

But the future decision of the en banc court of the D.C. Circuit changes things.  With the three new Democratic appointees to the Court, there is now a Democratic majority and it seems extremely likely that the panel decision will be reversed – in which case, there would no longer be a split.  Of course, there are other cases – a District Court in Oklahoma just held that federal exchanges cannot receive subsidies – but those circuit court decisions may take some time and there is arguably a strong need for this issue to be resolved expeditiously.

I wonder whether the Supreme Court will feel constrained from taking cert if the full D.C. Circuit decides in favor of federal exchange subsidies.  Every circuit court judge who has decided the matter has voted on party lines in these cases.  If the Democratic D.C. Circuit reverses, that trend will continue.  And there is controversy about whether the D.C. Circuit should have taken the case en banc.  In these circumstances, one might wonder whether at least four of the five Republicans on the Supreme Court will decide to hear the case, notwithstanding the lack of a circuit split.

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This Just In: District Court Nixes IRS Obamacare Rule

In a relatively brief, concise Order and Opinion, U.S. District Judge Ronald A. White (Eastern District, Oklahoma) has set aside a notorious IRS rule declaring that subsidies and mandates under the Affordable Care Act apply in states with federal as well as state-run health care “Exchanges.” The Order and Opinion in Pruitt v. Burwell agreed with the D.C. Circuit’s holding in Halbig v. Burwell, currently pending on en banc consideration, that the statutory language—an exchange “established by the State”—could not be read to include exchanges established by the federal government in and on behalf of the state. The District Court disagreed…

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In Sickness and in Health

If Ezekiel Emanuel (age 57)  had just stated his preference for dying at 75 or if he were a citizen uninvolved in public affairs, no attention need be paid. There is no use disagreeing with tastes, and the world is full of eccentrics. But Emanuel was one of the enthusiastic cheerleaders of the President’s health care plan, and he offers a lot of reasons to justify his preference. The considerations he adduces and those he fails to account for provide an unsettling perspective on the world view underlying some progressive support for Obamacare.

Insufficient interest in future innovation. Emanuel is concerned that, even if he lives longer than 75, he is likely to be a shadow of his former self. But Emanuel considers the world as it is today, not one that innovation could create when he is 75.

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Halbig: Another Expert View

The federal judiciary is in great need of expert economic advice, and mercifully some are happy to supply it. “Stop the Anti-Obamacare Shenanigans,” Henry J. Aaron (senior fellow, Brookings), David M. Cutler (professor, Harvard), and Peter R. Orszag (shill, citigroup) plead on the New York Times op-ed page. They urge the Supreme Court to await the D.C. Circuit’s en banc decision in Halbig before granting cert in King v. Burwell. Because if the petitioners’ position and the D.C. Circuit’s ruling—ACA tax credits and mandates apply only under health care exchanges established by states, not to exchanges established by HHS in a state—were to prevail, “it would create total chaos.”

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Peter Huber May Save Your Life

Peter Huber’s The Cure in the Code  is likely the best nonfiction book in years if quality is measured by the potential to improve  important social policy. Huber compellingly shows how twenty-first century medicine can lengthen life and improve its quality, if only we can get rid of the twentieth century mindset of government control at the FDA and in the Obama administration.   Huber does not write as a political polemicist, but as scientist, demonstrating that the model of medical treatment and discovery on which current law rests does not comport with the revolutionary nature of modern molecular and genomic medicine.

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Halbig and Obamacare: What We Have Learned (Part II)

Herewith, as promised in Part I, a few additional thoughts on Halbig’s lessons. My humble observations aren’t intended as nuanced legal analysis; there’ll be time enough for that as the cases progress. Today’s subject is the broader context of how the doctrines and institutions that have sustained administrative law are coming apart at the seams.

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Bill Levin on The Aftermath of Halbig

My friend and former colleague from the Office of Legal Counsel, Bill Levin, has been following the Halbig case closely.  Here are his thoughts on the aftermath of the case. 

The aftermath of the D.C. Circuit decision in Halbig is encouraging.

On the PR front, it has been unexpectedly difficult for Obamacare defenders.  In recorded speeches from 2011 and 2012, Obamacare architect Jonathan Gruber confirms that the central premise of Halbig is correct:  Obamacare provides subsidies for state exchanges only (“[I]f you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.”).  Now in 2014 he says his statement, evidently recorded in varying versions on at least seven different occasions, and counting, was “just a speak-o—you know, like a typo,” which, unintelligible valley speak aside, cannot be accurate unless in the Michael Kinsley sense of accidentally telling the truth.

The multiple Gruber audio and video recordings are truly a smoking gun, readily available for all to evaluate the next time someone claims that Halbig seeks to undermine Obamacare, or in the colorful, but demonstrably unsound words of dissenting Senior Circuit Judge Edwards, “This claim is nonsense, made up out of whole cloth.”

To recap the whole cloth for perspective, Obamacare provides subsidies for an exchange “established by the state.”  Nowhere in its 906 pages does the statute manage to apply these simple words to the federal exchange.  Not once in the legislative history is a federal subsidy mentioned by a single legislator.  And now we have an architect of Obamacare, a distinguished MIT economist, not some random talking head or partisan opponent, plainly stating what the law plainly means.  “[I]f you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.”  It could be a rallying cry, for it truly crystallizes the case, except that the sentence lacks style and cannot fit on a T-shirt.  Yet Obamacare supporters are taking to the barricades and a senior judge feels emboldened to claim the litigation is fanciful.  This could be the stuff of comedy were the stakes not so high. 

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Halbig and Obamacare: What We Have Learned (Part I)

ObamacareTwo-plus weeks have passed since the D.C. Circuit’s panel decision in Halbig v. Burwell and the Fourth Circuit’s opposite decision in King v. Burwell, a substantially identical case.[1] The King plaintiffs have filed their cert petition; and the government has asked for rehearing en banc in the D.C. Circuit; and the initial agitation has subsided. It’s a fine time to highlight a few lessons that, in my estimation, we have already learned. I offer three sets of observations: today, I’ll focus on the interplay between constitutional and administrative law and on the advocacy network that produced Halbig and its companion cases; tomorrow, I’ll analyze the institutional pathologies and ideological derangements that account for the contretemps.

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Time to Rethink the Chevron Doctrine

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These are interesting times, constitutionally speaking. In the past two weeks, federal courts have ruled both ways on Obamacare. In the D.C. Circuit, a panel ruled that the law allows for subsidized health insurance in exchanges created by state governments, but not in the “backstop” exchange created by the federal government. Meanwhile, the Fourth Circuit says that the statute allows subsidies in both.

Who is right?

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