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BREAKING: Two Republican Judges Order Obamacare Defunded

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« on: July 22, 2014, 12:16:24 pm »

BREAKING: Two Republican Judges Order Obamacare Defunded

By Ian Millhiser July 22, 2014 at 10:25 am Updated: July 22, 2014 at 12:19 pm
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"BREAKING: Two Republican Judges Order Obamacare Defunded"

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Ted Cruz

CREDIT: AP Photo/Alex Brandon

Near the end of 2013, Sen. Ted Cruz (R-TX) led a final crusade to defund the Affordable Care Act, eventually announcing on the Senate floor that “I intend to speak in opposition to Obamacare, I intend to speak in support of defunding Obamacare, until I am no longer able to stand.” Cruz did succeed in goading his fellow Republicans into shutting down the federal government, but his effort was ultimately doomed. The American people’s elected representatives voted not to defund Obamacare, and the shutdown ended.

On Tuesday, two Republican judges voted to rewrite this history. Under Halbig v. Burwell, a decision handed down by Judge Raymond Randolph, a Bush I appointee, and Judge Thomas Griffith, a Bush II appointee, millions of Americans will lose the federal health insurance subsidies provided to them under the Affordable Care Act — or, at least, they will lose these subsidies if Randolph and Griffith’s decision is ultimately upheld on appeal.

Ted Cruz is undoubtedly smiling today. Two unelected Republicans just voted to erase his most embarrassing and most public defeat, and they voted to take away millions of Americans health care in the process.
Meet The Republicans

It’s important to understand just who these two Republicans are. Judge Randolph is a staunchly conservative judge who spent much of the oral argument in this case acting as an advocate for the anti-Obamacare side. Randolph complained, just a few weeks before President Obama would announce that the Affordable Care Act had overshot its enrollment goal, that the launch of the Affordable Care Act was “an unmitigated disaster” and that its costs “have gone sky-high.” At one point, Randolph also cut off Judge Harry Edwards, the sole Democratic appointee on the panel, to cite an editorial published by the conservative Investor’s Business Daily to prove the argument that Obamacare should be defunded.

The Investor’s Business Daily is not known as a particularly reliable source on health policy. In 2009, for example, it published an editorial arguing that Stephen Hawking, the British physicist who is an Englishman from the United Kingdom, “wouldn’t have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless.”

Judge Griffith has a reputation as a more moderate judge, but it is not clear that this reputation is deserved. In 2012, Griffith’s colleague, Judge Janice Rogers Brown, published a concurring opinion suggesting that all labor, business or Wall Street regulation is constitutionally suspect. “America’s cowboy capitalism,” Brown claimed, “was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s.” Later in her opinion, Brown suggested that the Court went off the rails when it “decided economic liberty was not a fundamental constitutional right.” In the early Twentieth Century, conservative justices relied on ideas of “economic liberty” that were discarded in the 1930s in order to strike down laws protecting workers’ right to organize, laws ensuring a minimum wage and laws prohibiting employers from overworking their employees.

Griffith did not join Brown’s opinion, but his explanation for why he did not do so is instructive — “[a]lthough by no means unsympathetic to [Brown's] criticism nor critical of [her] choice to express [her] perspective, I am reluctant to set forth my own views on the wisdom of such a broad area of the Supreme Court’s settled jurisprudence that was not challenged by the petitioner.” So Griffith is “sympathetic” to Brown’s argument that much of the Twentieth Century is unconstitutional, but he did not want to join her opinion because the arguments she made were not raised by the parties in that case. Halbig, by contrast, presented Griffith with a much more direct attack on supposedly “burdensome regulation” brought by the forces of “cowboy capitalism.”
Punishing Millions For A Proofreading Error

The two Republicans’ decision rests on a glorified typo in the Affordable Care Act itself. Obamacare gives states a choice. They can either run their own health insurance exchange where their residents may buy health insurance, and receive subsidies to help them pay for that insurance if they qualify, or they can allow the federal government to run that exchange for them. Yet the plaintiffs’ in this case uncovered a drafting error in the statute where it appears to limit the subsidies to individuals who obtain insurance through “an Exchange established by the State.” Randolph and Griffith’s opinion concludes that this drafting error is the only thing that matters. In their words, “a federal Exchange is not an ‘Exchange established by the State,’” and that’s it. The upshot of this opinion is that 6.5 million Americans will lose their ability to afford health insurance, according to one estimate.

The Supreme Court of the United States, however, has long recognized that a law’s clear purpose should not be defeated due to an error in proofreading. As the Court explained in 2007, “a reviewing court should not confine itself to examining a particular statutory provision in isolation” as the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” It is indeed true that a single phrase of the Affordable Care Act, if read in isolation, suggests that Congress intended only state-run exchanges — as opposed to federal exchanges — to offer subsidies, but this provision is contradicted by numerous other provisions of the law.

One provision of the Affordable Care Act, for example, indicates that any “exchange” shall be an “entity that is established by a State” — language which indicates that federally run exchanges will be deemed to be “established by a state.” This may seem counter-intuitive, but Congress has the power to define the words that it uses in any way that it wants, even if those words are defined in ways that are unusual. Another provision of the law provides that, when a state elects not to run an exchange, the Secretary of Health and Human Services “shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” Thus, the law not only authorizes the Secretary to stand in the state’s shoes when it runs an exchange, it also empowers her to implement the law’s “other requirements.”

Nor is this is the full extent of the problems with Randolph and Griffith’s conclusion. Indeed, in order to accept their decision, a person reading the Affordable Care Act must ignore the following facts:

    The subtitle of the Affordable Care Act which contains the provisions at issue in this case is titled “Affordable Coverage Choices for All Americans.” If Randolph and Griffith are correct, Congress would have named that subtitle “Affordable Coverage Choices for All Americans Except For Those Americans Who Live In States With Federally-Run Exchanges.”
    The Affordable Care Act says that it will “achieve[] near-universal coverage.” If Randolph and Griffith are correct, Congress would have said that Obamacare “achieves near-universal coverage except in states with federally-run exchanges.”
    An amendment to the Affordable Care Act requires the federally-run exchanges to report various information that they would only be able to report if they were providing subsidies, such as whether taxpayers received an “advance payment of such credit”; information needed to determine individuals’ “eligibility for, and the amount of, such credit”; and “nformation necessary to determine whether a taxpayer has received excess advance payments.” Congress would not have imposed this reporting requirements if they thought that the federal exchanges would not offer subsidies.
    The Affordable Care Act also provides that the only people who are qualified to purchase insurance at all on a federally-run exchange are people who “reside[] in the State that established the Exchange.” Thus, if federally-run exchanges are not deemed to be “established by the State,” that means that no one at all is allowed to purchase health insurance on the federally-run exchanges, and there would be no purpose whatsoever to their existence. As the trial court explained in this very case, this interpretation makes no sense, because “courts presume that Congress has used its scarce legislative time to enact statutes that have some legal consequence.”

Shifting Positions

Virtually no one, apparently including at least one of the plaintiffs who brought this lawsuit, actually believes that these propositions are true. Indeed, as the government points out in its brief, one of the plaintiffs who brought this lawsuit also was a plaintiff in the last lawsuit seeking to gut Obamacare, the challenge to the individual mandate that was rejected by the Supreme Court. In that lawsuit, this plaintiff argued that the subsidies were an integral part of every exchange’s’ very design — “[w]ithout the subsidies driving demand within the exchanges, insurance companies would have absolutely no reason to offer their products through exchanges, where they are subject to far greater restrictions.” Now, however, he expects the courts to believe that these subsidies were entirely optional, and that Congress intended federally-run exchanges to get along without them. Notably, the exact same lawyer represented this plaintiff when he made both of these mutually exclusive claims.

The unsuccessful legal argument claiming that the individual mandate was unconstitutional was a major prong of the Republican attack on the law as early as 2009. Yet, even after the GOP decided that defeating Obamacare in court was their number one policy priority, after Republican officials in numerous states brought a high-profile lawsuit seeking to kill this law, and after they hired one of the best lawyers in the country to drive this litigation, no one noticed the alleged flaw in the statute that Randolph and Griffith rely upon today. The reason why is obvious. Not even the many Republican officials who filed briefs seeking to kill this law the first time around actually believed that the law was intended to deny subsidies to people who buy insurance in federal exchanges.

To get around this fact, Randolph and Griffith spin an alternative history of the Affordable Care Act’s passage. A major prong of this alternative history claims that Congress wanted to deny subsidies to people in states with federally-run exchanges because that that would provide states with an incentive to start their own exchange — in Randolph and Griffith’s words, Congress “us[ed] subsidies as an incentive to gain states’ cooperation.” Thus, in this narrative, Congress viewed getting states to run exchanges as an all-encompassing goal, trumping even the law’s stated goals of providing “Affordable Coverage Choices for All Americans” and achieving “near-universal coverage.” Needless to say, there is absolutely no evidence whatsoever that Congress actually viewed the administrative question of which set of government bureaucrats would run a particular state’s exchange as a question of such superseding importance that they were willing to deny health coverage to millions of people in order to ensure that the right set of bureaucrats run the exchanges in each state.
An Opinion That Kills

Should Randolph and Griffith’s decision be upheld on appeal, which, for reasons explained below, is unlikely, it would send destructive shockwaves through much of the American health care system. As ThinkProgress previously explained, suddenly removing federal subsidies from insurance markets that expect them to continue being paid would force health insurers to jack up their premiums in order to cover their costs. Higher premiums, however, would cause many healthy individuals to drop their coverage. Which will force insurers to raise their premiums even more, which will cause even more individuals to lose their coverage. Indeed, according to a brief filed by several economists, the resulting death spiral would render insurance “unaffordable for more than 99 percent of the families and individuals eligible for subsidies” within the federal exchanges.

This economic problem exposes yet another flaw in Randolph and Griffith’s opinion. In order to accept their reasoning, one has to believe that Congress buried a hidden time bomb within the arcane provisions of the Affordable Care Act that, when it detonated, would render much of the act a nullity. As the economists explain in their brief, Randolph and Griffith’s decision presumes that “Congress sought to legislate into existence a massive new social program that it understood would immediately fail.”

So Randolph and Griffith’s opinion would be comic if its result were not so tragic. And make no mistake, if this opinion is upheld on appeal, it will be a tragedy. According to one Harvard study, nearly 45,000 Americans between the ages of 18 and 64 died in a single year because they lacked health insurance. Randolph and Griffith’s decision would ensure that many of these deaths resume. That’s tens of thousands of wives who will never hold their husbands again, and tens of thousands of fathers who will never kiss their daughters again, all because two unelected Republicans hunted through an ocean of language indicating that Congress intended to end these needless deaths in order to find a single piece of flotsam suggesting that the law should be defunded.

This is not how judges typically behave in a democracy. And it is not a decision that is rooted either in Congress’ intentions or in Supreme Court precedent.
An Opinion That Is Unlikely To Survive

We live in interesting times. And we live in times where judges and justices can no longer be expected to rely on established law, especially when they are presented to an opportunity to undermine Obamacare. Nevertheless, there are several reasons to be optimistic that Randolph and Griffith attempt to defund Obamacare will not survive contact with a higher authority.

For starters, under the Supreme Court’s Chevron Doctrine, courts typically defer to a federal agency’s reading of a law so long as “the agency’s answer is based on a permissible construction of the statute.” Randolph and Griffith get around this doctrine by claiming that the law “the ACA unambiguously restricts the section 36B subsidy to insurance” purchased on state-run exchanges.

If you truly believe that the only possible interpretation of the Affordable Care Act’s language is the one adopted by Randolph and Griffith on Tuesday, then you may want to go back to the top of this article and start reading it all over again. In any event, two federal judges previously concluded that Obamacare is unambiguous in the other direction — that is, it unambiguously offers subsidies to people who purchase insurance through federal exchanges. That alone demonstrates that, even if the law isn’t completely clear, its meaning is at least uncertain enough that the courts should defer to the agency’s reading under Chevron.

More importantly, Randolph and Griffith’s own colleagues are unlikely to allow this opinion to stand for long. The federal government may now appeal this decision to the full United States Court of Appeals for the District of Columbia Circuit, where Democrats enjoy a 7-4 majority among the court’s active judges. It is unlikely, to say the least, that a Democratic bench will strike down President Obama’s primary legislative accomplishment based on the highly doubtful reasoning contained in Randolph and Griffith’s opinion.

Should the full DC Circuit intervene, of course, their decision can ultimately be appealed to the GOP-controlled Supreme Court. But we’ve already seen this story play out once before. The last time conservative lawyers brought a case to the Supreme Court seeking to gut Obamacare, Chief Justice John Roberts voted to uphold the bulk of the law.

Roberts cast this vote a year-and-a-half before much of the law would actually be implemented, meaning that, if he had chosen to struck down the law then, he would have been able to do so at a time when the constituency for upholding the law was relatively small. Now, however, millions of Americans stand to lose their health insurance if Roberts signs on to Randolph and Griffith’s reasoning — and Roberts would be personally responsible for the subsequent loss of health coverage and needless deaths that would result. If Roberts was unwilling to trash the law at a time when the impact would have been relatively small, it is unlikely that he will do so under circumstances that are likely to inspire the masses to storm his castle while wielding pitchforks.

The 4th Circuit just handed down it’s decision in a similar case challenging Obamacare subsidies in the federal exchanges. It reached the opposite conclusion and upheld the subsidies.
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« Reply #1 on: July 22, 2014, 04:15:46 pm »

One thing you can always count on Republicans to be are mean-spirited, selfish scumbags.
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« Reply #2 on: July 22, 2014, 06:20:48 pm »

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Two Republican Judges Gut Obamacare, Threatening Health Care For Millions
Posted: 07/22/2014 12:08 pm EDT Updated: 3 hours ago

WASHINGTON -- Two Republican judges on the D.C. Circuit Court have ruled that the equivalent of a typo is enough to strip health care subsidies from up to 5 million people, dealing what would be a death blow to the Affordable Care Act if the decision is allowed to stand. The one Democrat on the panel dissented.

The three-judge panel ruled in Halbig v. Burwell that people in the 36 states that use the federal health insurance exchange are ineligible for subsidized insurance. The decision would also affect those who purchased insurance through the exchange but don't receive subsidies, as reneging on the payments would lead to a rapid increase in insurance rates for everyone.

The White House said Tuesday the decision will be appealed to the entire D.C. circuit court -- what's known as an en banc review -- where Democrats hold a majority that is nearly certain to overturn the GOP judges' aggressive move. The next step could be the Supreme Court, which already upheld the Affordable Care Act in a separate case two years ago.

The U.S. courts have never been entirely above the political system, but under Supreme Court Chief Justice John Roberts, whose court routinely strikes down longstanding precedent along 5-4, strictly party-line votes, they are becoming little more than another legislative branch -- one that holds itself above the branch that was vested with lawmaking powers by the Constitution.

The majority opinion was not without a comedic interlude. "We reach this conclusion, frankly, with reluctance," Judge Thomas Griffith said of the opportunity to achieve a longtime GOP goal.

The two judges seized on text within the law that said subsidies would be provided to people who purchased insurance on exchanges established by the states. But 36 states declined to set up their own exchanges, and chose to rely on the federal government's exchange instead. Because the law doesn't specifically say that people who bought insurance on the federal exchange also get subsidies, the law's opponents argued that therefore such subsidies are illegal.

"The problem confronting the [ACA] is that subsidies also turn on a third attribute of Exchanges: who established them. Under section 36B, subsidies are available only for plans 'enrolled in through an Exchange established by the State under section 1311 of the [ACA],'" the majority opinion ruled, rejecting the counter-argument that other portions of the law specifically say that a federal exchange set up for a state is by definition a state exchange.

The one dissenting judge said that the GOP argument is silly. "This case is about Appellants’ not-so-veiled attempt to gut the Patient Protection and Affordable Care Act," Senior Circuit Judge Harry T. Edwards wrote in his dissent. "At the time of the ACA’s enactment, it was well understood that without the subsidies, the individual mandate was not viable as a mechanism for creating a stable insurance market."

"You don't need a fancy legal degree to understand Congress intended for the Affordable Care Act to provide tax credits regardless who was running the marketplace," White House press secretary Josh Earnest said Tuesday in response to the ruling.

A key aspect of the plaintiffs' argument is that Congress wanted to incentivize states to create their own exchanges and withhold financial assistance for residents of those states that didn't, a contention Edwards mocked.

"The simple truth is that Appellants’ incentive story is a fiction, a post hoc narrative concocted to provide a colorable explanation for the otherwise risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges," Edwards wrote.

The Republican judges twisted themselves in knots to find a way to invalidate the law, while ignoring its intent, Edwards said. "The majority opinion ignores the obvious ambiguity in the statute and claims to rest on plain meaning where there is none to be found. In so doing, the majority misapplies the applicable standard of review, refuses to give deference to the IRS’s and HHS’s permissible constructions of the ACA, and issues a judgment that portends disastrous consequences," he writes. "Appellants’ argument cannot be squared with the clear legislative scheme established by the statute as a whole."

Arguing the case on the merits, of course, is beside the point. The GOP opposes the Affordable Care Act. Where it has a majority, it proved again Tuesday, it will move to repeal it.

If the decision survives further court review, it would affect more than half of the 8 million people who received subsidies for coverage for this year, according to the consulting firm Avalere Health. Eighty-five percent of those who purchased health insurance on an exchange received subsidies, but those in the District of Columbia and the 14 states that operate their own exchanges would not be affected by the ruling.

The decision effectively would hike premiums for almost 5 million people by 58 percent to 95 percent on average, depending on where they live. The highest price increases would be felt by individuals in Florida, Georgia, Mississippi and Missouri, where people would pay at least 80 percent more, according to Avalere Health's estimates based on data from the Department of Health and Human Services. Residents of Texas and 11 other states would pay at at least 75 percent more.
obamacare exchanges

The ruling against Obamacare subsidies would affect anyone using a federally facilitated marketplace or partnership marketplace. Source: Henry J. Kaiser Family Foundation

The unelected judges, after ruling to overturn the law passed by both chambers of Congress, said that they did so in order to defend the "principle of legislative supremacy."

"At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly," they wrote. "But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. 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. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges."

UPDATE: 12:30 p.m. -- Later Tuesday, three judges appointed by Democrats to a federal appeals court panel in Virginia unanimously ruled the opposite way in King v. Burwell, a lawsuit challenging the legality of Obamacare subsidies on similar grounds. The Virginia court upheld a lower court's ruling in the government's favor. Other Obamacare lawsuits are pending in other federal courts.
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« Reply #3 on: July 22, 2014, 06:21:01 pm »

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« Reply #4 on: July 22, 2014, 06:22:29 pm »

Judge Harry Edwards Issues Blistering Dissent Slamming 'Nonsense' Obamacare Decision
The Huffington Post  | By Shadee Ashtari

Posted: 07/22/2014 1:04 pm EDT Updated: 2 hours ago
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In a crippling blow to President Barack Obama's signature health care law on Tuesday, a federal appeals court ruled that the federal government may not subsidize health insurance plans purchased by consumers in 36 states operating federal insurance marketplaces.

The 2-1 ruling by the three-judge panel of the U.S. Court of Appeals for the D.C. Circuit would affect almost 5 million Americans without employer-provided health plans who are receiving tax credits to pay their premiums for health coverage under a federal exchange.

Writing the court's majority opinion, Judge Thomas Griffith, an appointee of former President George W. Bush (R), argued that the law’s insurance subsidies apply only to states that have created their own exchanges, thereby invalidating an IRS regulation permitting nationwide subsidies.

But Senior Judge Harry T. Edwards, appointed by former President Jimmy Carter (D), sharply disagreed with the conservatives on the court.

"This case is about Appellants’ not-so-veiled attempt to gut the Patient Protection and Affordable Care Act," Edwards wrote in his dissent Tuesday. "This claim is nonsense, made up out of whole cloth. There is no credible evidence in the record that Congress intended to condition subsidies on whether a State, as opposed to HHS, established the Exchange."

Edwards' full opinion:

    This case is about Appellants’ not-so-veiled attempt to gut the Patient Protection and Affordable Care Act (“ACA”). The ACA requires every State to establish a health insurance “Exchange,” which “shall be a governmental agency or nonprofit entity that is established by a State.” 42 U.S.C. § 18031(b)(1), (d)(1). The Department of Health and Human Services (“HHS”) is required to establish “such Exchange” when the State elects not to create one. Id. § 18041(c)(1).

    Taxpayers who purchase insurance from an Exchange and whose income is between 100% and 400% of the poverty line are eligible for premium subsidies. 26 U.S.C. § 36B(a),(c)(1)(A). Appellants challenge regulations issued by the Internal Revenue Service (“IRS”) and HHS making these subsidies available in all States, including States in which HHS has established an Exchange on behalf of the State. In support of their challenge, Appellants rely on a specious argument that there is no “Exchange established by the State” in States with HHS-created Exchanges and, therefore, that taxpayers who purchase insurance in these States cannot receive subsidies.

    As explained below, there are three critical components to the ACA: nondiscrimination requirements applying to insurers; the “individual mandate” requiring individuals who are not covered by an employer to purchase minimum insurance coverage or to pay a tax penalty; and premium subsidies which ensure that the individual mandate will have a broad enough sweep to attract enough healthy individuals into the individual insurance markets to create stability.
    These components work in tandem. At the time of the ACA’s enactment, it was well understood that without the subsidies, the individual mandate was not viable as a mechanism for creating a stable insurance market.

    Appellants’ proffered construction of the statute would permit States to exempt many people from the individual 2 mandate and thereby thwart a central element of the ACA. As Appellants’ amici candidly acknowledge, if subsidies are unavailable to taxpayers in States with HHS-created Exchanges, “the structure of the ACA will crumble.” Scott Pruitt, ObamaCare’s Next Legal Challenge, WALL ST. J., Dec. 1, 2013. It is inconceivable that Congress intended to give States the power to cause the ACA to “crumble.”

    Appellants contend that the phrase “Exchange established by the State” in § 36B unambiguously bars subsidies to individuals who purchase insurance in States in which HHS created the Exchange on the State’s behalf. This argument
    fails because “the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 666 (2007) (internal quotation marks
    omitted). When the language of § 36B is viewed in context – i.e., in conjunction with other provisions of the ACA – it is quite clear that the statute does not reveal the plain meaning that Appellants would like to find.

    Because IRS and HHS have been delegated authority to jointly administer the ACA, this case is governed by the familiar framework of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Under Chevron, if “the statute is silent or ambiguous with respect to the specific issue,” we defer to the agency’s construction of the statute, so long as it is “permissible.” Id. at 843. The Government’s permissible interpretation of the statute easily survives review under Chevron. The Act contemplates that an Exchange created by the federal government on a State’s behalf will have equivalent legal standing with State-created Exchanges. 42 U.S.C. § 18041. And the ACA would be self-defeating if taxpayers who purchase insurance from an HHS-created Exchange are deemed ineligible to receive subsidies.

    Appellants’ argument cannot be squared with the clear legislative scheme established by the statute as a whole.

    Apparently recognizing the weakness of a claim that rests solely on § 36B, divorced from the rest of the ACA, Appellants attempt to fortify their position with the extraordinary argument that Congress tied the availability of subsidies to the existence of State-established Exchanges to encourage States to establish their own Exchanges. This claim is nonsense, made up out of whole cloth. There is no credible evidence in the record that Congress intended to condition subsidies on whether a State, as opposed to HHS, established the Exchange. Nor is there credible evidence that any State even considered the possibility that its taxpayers would be denied subsidies if the State opted to allow HHS to establish an Exchange on its behalf.

    The majority opinion ignores the obvious ambiguity in the statute and claims to rest on plain meaning where there is none to be found. In so doing, the majority misapplies the applicable standard of review, refuses to give deference to the IRS’s and HHS’s permissible constructions of the ACA, and issues a judgment that portends disastrous consequences. I therefore dissent.

Read the full decision here.$file/14-5018-1503850.pdf

Shortly after the D.C. Circuit Court's ruling was released, the 4th U.S. Circuit Court of Appeals in Richmond upheld Obamacare tax subsidies in both state and federal exchanges in a unanimous ruling.
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« Reply #5 on: July 22, 2014, 06:29:22 pm »

Split decision! Fed appeals courts disagree on Obamacare subsidies
Dan Mangan   | @_DanMangan
6 Hours

In a dramatic split decision, two federal appeals panels disagreed Tuesday on the legality of Obamacare subsidies that gave billions of dollars to help 4.7 million people buy insurance on

A panel of the appeals court that covers Washington, D.C., ruled 2-1 that the subsidies were and are illegal if issued through that federal exchange, as opposed to one set up by a state.

But about two hours later, a Fourth U.S. Circuit Court of Appeals panel ruled 3-0 in another case that the subsidies are legal for people who buy plans on, which the federal government operates in 36 states.

The two decisions can be read here.

The circuit split could mean the cases will soon land before the U.S. Supreme Court. For now, the subsidies remain in effect.

The stakes are immense, not least because of the value of the taxpayer-funded subsidies to Obamacare enrollees in two-thirds of the US.

The subsidies are also the linchpin to Obamacare's two mandates.

One mandate now requires people obtain affordable health insurance or pay a fine.The other, beginning in 2015, will require mid- to large-sized employers to offer such insurance to workers or pay a tax penalty.

If the subsidies aren't legal in states, the employer mandate would be eliminated in those states and the individual mandate would be effectively crippled.

The subsidies to enrollees were authorized by an IRS rule that was issued after the Affordable Care Act was passed.

But plaintiffs in several federal lawsuits claim that rule is not legal because the ACA only explicitly authorizes subsidies to enrollees on state-run exchanges. The ACA does not explicitly authorize subsidies being issued to enrollees on a federal exchange, although it does discuss the creation of such an exchange as if a state doesn't set up its own marketplace.

In the D.C. circuit case, the panel agreed with the plaintiff's controversial claim that only state-exchange enrollees can legally be granted such subsidies.

Read MoreThe BIG threat to Obamacare you've never heard of

"Section 36B plainly makes subsidies available in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph, who was joined by Judge Thomas Griffith in the majority decision on the case known as Halbig v. Burwell.

"We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly."

In his dissent, Judge Harry Edwards, called the case a "not-so-veiled attempt to gut" Obamacare, and said the ruling "portends disastrous consequences."

Indeed, the 72-page decision threatens to unleash a cascade of effects that could seriously compromise Obamacare's goals of compelling people to get health insurance, and helping them afford it.

"Obviously, were the DC ruling ultimately to stand, it would be a serious blow to trying to extend insurance to all Americans," said Timothy Jost, a Washington and Lee University School of Law professor who has been influential in the debate over Obamacare and the subsidies.

However, the ruling does not and will not ultimately affect the same kinds of taxpayer-fund subsidies the federal government issued to about 2 million people who bought health plans on the 15 exchanges run by individual states and the District of Columbia.

The Obama administration said it will ask the full U.S. Court of Appeals for the District of Columbia Circuit to reverse the panel's decision, which for now does not have the rule of law.

In its own ruling upholding the legality of the subsidies, a three-judge panel in the Fourth Circuit said that the language detailing how those tax credits are awarded is "ambiguous and subject to multiple interpretations."

But the panel found that it is "clear that widely available tax credits are essential to fulfilling the Act's primary goals and that Congress was aware of their importance when drafting the bill."

"The IRS Rule advances this understanding by ensuring that this essential component exists on a sufficiently large scale," the Fourth Circuit panel wrote. serves residents of the 36 states that did not create their own health insurance marketplace. By the close of open enrollment in mid-April, the federal exchange had enrolled 5.4 million of the 8 million people who signed up for Obamacare plans.

About 4.7 million people, or 86 percent of all enrollees, qualified for a subsidy to offset the cost of their coverage this year because they had low or moderate incomes. Many of those people pay less than $100 per month in premiums after their subsidies are factored in.

If upheld, the ruling could lead many, if not most of those subsidized customers to abandon their health plans sold on because they no longer would find them affordable without the often-lucrative tax credits. And if that coverage then is not affordable for them as defined by the Obamacare law, those people will no longer be bound by the law's mandate to have health insurance by this year or pay a fine next year.

If there were to be a large exodus of subsidized customers from the plans, it would in turn likely lead to much higher premium rates for non-subsidized people who would remain in those plans.

Read MoreCourts could cause big Obamacare $$$ hike

The ruling also threatens, in the 36 states, to destroy the Obamacare rule starting next year that all employers with 50 or more full-time workers offer affordable insurance or face fines. That's because the rule kicks in if one of their workers buy subsidized coverage on

The DC panel's decision is the most serious threat to the underpinnings of the Affordable Care Act since a challenge to that law's constitutionality was heard by the Supreme Court. The high court in 2012 upheld most of the ACA, including the mandate that most people must get insurance or pay a fine.

If the Obama administration fails to prevail in its planned challenge to Tuesday's bombshell ruling by asking the full DC circuit to reverse the decision, it can ask the Supreme Court to reverse it. Likewise, the plaintiffs who were challenging the subsidies in the Fourth Circuit appeals court could ask that full court to reverse the decision that upheld the legality of the subsidies.

If, after a review by each of the entire circuits' judicial lineup, there is still a split in their decisions, a Supreme Court review is effectively guaranteed. It is not clear that the high court would consider an appeal if there ends up being no split between the circuits.

Two other federal district courts are dealing with similar challenges to the subsidies, but those cases have not reached the appellate level.

"It's in everyone's interest for this issue to be resolved sooner than later," said Jonathan Adler, a Case Western Reserve University law professor who, has been a primary architect of the challenges to the subsidies.
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The White House, already badly stung by the recent Supreme Court's "Hobby Lobby" ruling that allows some businesses to avoid an Obamacare contraception-related rule for religious reasons, quickly responded to the latest blow to the Affordable Care Act.

White House spokesman Josh Earnest said the ruling "does not have any practical impact" on premium subsidies issued to enrollees now."

"We are confident" that the ruling will be overturned, Earnest said. "We are confident in the legal position we have . . . the Department of Justice will litigate these claims through the federal court system."

Earnest said "it was obvious" that Congress intended subsidies, or tax credits, to be issued to Obamacare enrollees regardless of what kind of exchange they used to buy insurance.

Justice Department spokeswoman Emily Pierce, said "We believe that this decision is incorrect, inconsistent with congressional intent, different from previous rulings, and at odds with the goal of the law: to make health care affordable no matter where people live."

"The government will therefore immediately seek further review of the court's decision," Pierce said. "In the meantime, to be clear, people getting premium tax credits should know that nothing has changed, tax credits remain available."

House Speaker John Boehner praised the DC ruling, saying it's "further proof that President Obama's health care law is completely unworkable. It cannot be fixed."

Michael Cannon, one of the intellectual godfathers of the court challenge and a director at the libertarian Cato Institute, said the ruling "was validating" to him.

"This is the first opinion that looked at all of the evidence," said Cannon, noting that the decision found the Obama administration does not have and never had the power to issue subsidies to enrollees on a federal exchange

"The Obama administration has been violating its own health care law," Cannon said.

Read MoreWhat's really surprising about Hobby Lobby ruling

Cannon's claim has been met with derision by Obamacare supporters, who argue that it relies on a narrow reading, or even misreading of the law.

"The clear intent of the Affordable Care Act was to give American families access to affordable coverage no matter where they live," said Anne Filipic, president of the Obamacare advocacy group Enroll America President.

Supporters argue that the legality of the subsidies to enrollee derives from the fact that the law explicitly anticipated the potential need to create such a federal exchange in the event that a state chose not to.

Jost, the law professor, said of Tuesday's decision by the DC panel, "I think this is a speed bump in the way to getting uninsured Americans coverage."

"It's unfortunate that it happened, but it's not going to ultimately undermine or destroy the Affordable Care Act," Jost said.

When the ACA was passed, most supporters believed that the vast majority of states would create their own exchange. But the opposition to Obamacare of many Republican governors and state legislators lead to most states refusing to build their own marketplaces, setting the stage for the challenges to the subsidies issued for plans.

Two separate federal district court judges—in D.C. and Virginia—had rejected plaintiffs' challenge to the subsidies. Those denials lead to the appeals in the D.C. federal circuit and in the Fourth Circuit.

Out of the more than 8 million Obamacare enrollees this year, fewer than 2.6 million people signed up in plans sold via an exchange run by a state or the District of Columbia. Of those people, 82 percent, or about 2.1 million, qualified for subsidies.

The subsidies are available to people whose incomes are between 100 percent and 400 percent of the federal poverty level. For a family of four, that's between about $24,000 and $95,400 annually.

In a report issued Thursday, the consultancy Avalere Health said that if those subsidies were removed this year from the 4.7 million people who received them in states, their premiums would have been an average of 76 percent higher in price than what they are paying now.

Another report by the Robert Wood Johnson Foundation and the Urban Institute estimated that by 2016, about 7.3 million enrollees who would have qualified for financial assistance will be lose access to about $36.1 billion in subsidies if those court challenges succeed.
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Sort through the media disinformation:
Jade Hellene
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« Reply #6 on: July 22, 2014, 06:29:44 pm »

On Monday, the Cato Institute's Cannon said that tens of millions of people would be eliminated from Obamacare mandates in the affected states if the challenges prevailed.

Cannon said more than 250,000 firms in those states—which have about 57 million workers—would not be subject to the employer mandate being phased in starting next year. That rule, which hinges on the availability of subsidies on Obamacare exchanges, will compel employers with 50 or more full-time workers to offer affordable health insurance or pay a fine.

Read MoreCourts could cause big Obamacare $$$ hike

And if the challenge prevailed, a total of about 8.3 million individuals will be removed from Obamacare's rule that they have health insurance or pay a fine equal to as much as 1 percent of their taxable income, said Cannon.

--By CNBC's Dan Mangan
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4th Horseman of the Apocalypse
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« Reply #7 on: July 26, 2014, 12:33:44 am »

This will sure **** people off.  Angry
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The Lamb of God, or Lion of Judah, opens the first four of the seven seals, which summons forth four beings that ride out on white, red, black, and pale horses:  Conquest, War, Famine, and Death.
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