So what does the Halbig decision in the DC Circuit mean for the Exchanges? On a practical matter, not much at the moment. And longer term, probably not much unless there are five assholes on the Supreme Court who decide that fucking with Obamacare is worth fucking with one hundred years of administrative law precedent.
The Halbig decision says that the IRS can not offer premium assistance tax subsidies to people who signed up for insurance on federally run exchanges as it was the clear intent of Congress to use tax subsidies as a hammer to get states to establish their own exchanges (bullshit) but that is their argument. People who live in states that have their own exchanges (like Kentucky and California) would still qualify for subsidies.
Under the original Senate logic of the bill, the state exchanges would be the default option as it would devolve power to the states instead of having a one size fits all federal solution. A federal exchange would be the back-up for states too small or too poor to establish their own exchange. The expectation was the federal exchange would carry states like Delaware, Wyoming and Vermont across the finish line. So even under the bullshit reading advanced by the majority of the DC panel, the federal exchanges would screw small state residents. Again, bullshit. The 4th circuit demolishes this idea.
And why am I not particularly worried? The government can ask for the entire active DC Court of Appeals to hear the case as a body. En Banc review is used for high profile cases or where the vast majority of the circuit thinks their colleagues fucked up big time.
The DC Court of Appeals currently has a 7-4 Democratic appointee majority and they’ll apply normal administrative law procedures to this case and tell their colleagues that they are fucking hacks in appropriately judgy language. Assuming the en banc review goes the way I think it does, all circuits will then agree that the IRS has the right to interpret ambiguous law as it sees fit as long as the interpretation passes a rationale basis/giggle test . If there is an all circuit agreement, the Supreme will have a real hard time taking the case to gut Red State subsidies.
And now let’s talk about the asshole of the day.
The two “intellectual fathers” of the anti-Obamacare lawsuits are Michael Cannon and Jonathan Adler. Their major brief on the Halbig case contains a massive factual error that invalidates their argument. Balkinization explains:
In a recent blog post, Cato scholar Michael Cannon admitted that he and his colleague, Case Western University professor Jonathan Adler, had made a mistake in an amicus brief they submitted to the courts in the Halbig and King cases. We all make mistakes—indeed Michael has claimed that I have made many mistakes in my analysis of these cases, some of which were indeed mistakes. This mistake is important, however, because it goes to the central argument that he and Jonathan have relied on in their brief….
When Michael Cannon first noticed this provision in the fall of 2011, he described it as a glitch. He must have realized, however, that the federal courts would be reluctant to invalidate a major federal program based on a “glitch.” He and Jonathan Adler, therefore, have constructed an increasingly elaborate legislative history for the provision.
First, they wrote a papersuggesting that the Senate HELP Committee, which developed its own draft of the legislation, wanted deliberately to threaten states with withholding subsidies from states that did not set up Exchanges. Since then, in amicusbriefs, Michael and Jonathan have argued that earlier health reform laws enacted or considered by Congress similarly threatened withholding of subsidies from individuals or businesses unless states agreed to comply with federal requirements.
Of course, Congress did not adopt the HELP bill or earlier proposals, but rather adopted the ACA, which contains federal fallback exchanges which step into the shoes of states that fail to establish their own exchanges, a different approach to encouraging the states to take action. In his “erratum,” Cannon admits that he was wrong as to at least one of those earlier proposed programs, further weakening his argument.
Cannon’s error is one of a flood of misstatements that the opponents of the ACA have propagated, from “death panels” at the outset to “no federal exchange tax credits” now.
Michael Cannon and Jonathan Adler did not withdraw their brief or otherwise attempt to get Halbig et al to drop the case based on significant error. It is almost like Cannon and Adler are neo-feudalists who want to fuck the poor, the middle class and anyone else in this strand of the multiverse who is slightly less privileged than themselves. So they get the asshole of the day award.
NB Remember legal “history” is not concerned with verifiable truth, rather it is concerned with creating a patina of “truthiness” to win an argument.