Hospitals, Policy

One step forward, one step back in GOP fight against ACA subsidies

In a world … Where circuits conflict .. RT @cghoseBiz1st: Coming soon to a political […]

When the Halbig v. Sebelius ruling about the Affordable Care Act was announced this morning – that certain people who bought insurance policies on the federal exchange were not eligible for subsidies to help pay for that coverage – I started writing one story. I was going to revise my previous analysis of the “no, thanks, you do it” strategy that many GOP governors went with in choosing not to launch a state insurance exchange. At 10 a.m. this morning, it looked like that decision was going to pay off after all in the GOP war on the ACA. The DC circuit court basically ruled that a particular section of ACA was not worded carefully enough to allow subsidies to go to everyone.

The circuit court said that because of the wording of a certain part of the law, ONLY people who got coverage through a state exchange were eligible for federal subsidies. All those people who bought policies on the federal exchange — because there was no state exchange for them to use — were NOT eligible for subsidies. That covers people in 36 states.

But before I could finish writing, another decision came down this afternoon, that completely contradicted the first one. Federal judges in Richmond., Va., unanimously upheld subsidies for insurance exchanges regardless of where the buyer lives.

The three-judge panel in DC was made up of two Republicans and one Democrat, and apparently this ruling was not unexpected.

Judges Thomas B. Griffith and A. Raymond Randolph concluded that the language of the ACA failed to allow for tax credits in such circumstances. Judge Griffith concluded his opinion with this statement:

We reach this conclusion, frankly, with reluctance. 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. 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.

In a strong dissent, Judge Harry Edwards explained his disagreement with the majority:

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.

In the Fourth Circuit case in Richmond — King v. Burwell — the judges said that while the “statutory language is ambiguous and subject to multiple interpretations,” they would exercise deference and “uphold the rule as a permissible exercise of the [IRS’] discretion.”

The DC circuit court panel has stayed their decision and the Obama administration is expected to ask for an en banc review of the decision, meaning 11 justices would consider the subsidy issue. According to Adrianna McIntyre on Vox, “The court skews to the left (there are seven Democratic appointees and only four Republican appointees) which bodes in the administration’s favor.”

The lawsuit in Washington was filed by several people in states that use the federal exchange: Tennessee, Texas, Virginia and West Virginia. They objected to being required to buy insurance, even with subsidies to reduce the cost.

David Klemencic is one of the plaintiffs in the suit ruled on by the DC court. He has a retail carpet store in West Virginia, and said paying for health insurance would put him out of business.

Veronica Combs

Veronica is an independent journalist and communications strategist. For more than 10 years, she has covered health and healthcare with a focus on innovation and patient engagement. Most recently she managed strategic partnerships and communications for AIR Louisville, a digital health project focused on asthma. The team recruited 7 employer partners, enrolled 1,100 participants and collected more than 250,000 data points about rescue inhaler use. Veronica has worked for startups for almost 20 years doing everything from launching blogs, newsletters and patient communities to recruiting speakers, moderating panel conversations and developing new products. You can reach her on Twitter @vmcombs.

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