Tuesday, July 22, 2014

Hailbig ruling great news, but far from over

Once again we are relying on men and women in black robes to make decisions for us that we should have made years ago with elected reps. Since we didn't now we have to rely upon judges to make right what we all know to be a farce.
In their haste to cram anything through, Congress wrote the ACA with little regard to how it would actually work. Take section 36B the heart of the Hailbig case:

 makes tax credits available as a form of subsidy to individuals who purchase health insurance through marketplaces—known as “American Health Benefit Exchanges,” or “Exchanges” for short—that are “established by the State under section 1311” of the Act. 26 U.S.C. § 36B(c)(2)(A)(i).

The way this is written makes normal people look at it and decide that only those plans bought through a State run exchange can be eligible for a subsidy. Since 36 states did not form them, then 36 states worth of people are not eligible for tax subsidies, however that also means they are not able to be penalized for lack of having a  "qualifying" insurance plan.

The IRS decided otherwise and made the decision to make regulations expanding it to everyone. The DC Court of Appeals disagreed

We conclude that appellants have the better of the argument: a federal Exchange is not an “Exchange established by the State,” and section 36B does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges. We reach this conclusion by the following path: First, we examine section 36B in light of sections 1311 and 1321, which authorize the establishment of state and federal Exchanges, respectively, and conclude that section 36B plainly distinguishes Exchanges established by states from those established by the federal government. We then consider the government’s arguments that this construction generates absurd results but find that it does not render other provisions of the ACA unworkable, let alone so unreasonable as to justify disregarding section 36B’s plain meaning.

 Basically they are saying that the law must be applied exactly as written, since the statute itself was written very specifically to only apply to state exchanges to act as an incentive to get states to participate. Since only 14 did (including DC). Now the law has a problem

Are we done? Nope, the Gov will appeal and it will end up at the Supreme Court. If Roberts doesn't have another mental break it should go the way of the do-do bird. However stranger things have been known to happen, after all he had the chance to end this all a few years ago and decided the penalty was a tax. Will he rule that way again to not upset his precedence?

All quotes from the ruling at the WSJ.

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