On the other hand: Fourth Circuit upholds ObamaCare subsidies for federal exchange consumers

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Allah:

Well, this is awkward.

Unlike the D.C. Circuit, which split 2-1, the majority here was 3-0. Even so, the most noteworthy thing about the opinion is how tormented the court seems in trying to determine what Congress intended when it said that subsidies should be available only on “an exchange established by the State.” From page 20:

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Page 24:

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Page 28:

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If they can’t decide what the key phrase was designed to do, why don’t they follow the D.C. Circuit’s lead and stick with the plain text? In the first excerpt above, the court frankly admits that the language of the law seems to support the plaintiffs’ argument more strongly than it does the government’s. But that’s not good enough, they go on to say; in a case like this, where they’re analyzing a rule promulgated by a federal agency (the, er, IRS) and the meaning of the underlying statute is unclear, it’s supposed to defer to the agency’s interpretation of the law if that interpretation serves the larger purposes of the statute. Which, says the court, it does. The purpose of ObamaCare is to encourage people to buy health insurance, whether through incentives like subsidies or penalties for noncompliance like the mandate. The IRS decided that it’d be silly to read “an exchange established by the State” as excluding the federal exchange, since that would remove a huge financial incentive to buy insurance for many millions of Healthcare.gov users. Plus, the only way to make O-Care work economically is to have lots of people, especially healthy people, jumping into the risk pool. Denying subsidies to federal exchange consumers would defeat that purpose. Held: The subsidies are still valid.

That means we have a circuit split — for now.

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But, not so fast: Obama’s Law Professor: ‘I Wouldn’t Bet’ on Obamacare Surviving Next Legal Challenge

“I don’t have a crystal ball,” Tribe told the Fiscal Times. “But I wouldn’t bet the family farm on this coming out in a way that preserves Obamacare.”

The law’s latest legal problem is that, as written, people who enroll in Obamacare through the federal exchange aren’t eligible for subsidies. The text of the law only provides subsidies for people enrolled through “an Exchange established by the State,” according to the text of the Affordable Care Act. Only 16 states decided to establish the exchanges.

The IRS issued a regulation expanding the pool of enrollees who qualify for the subsidies. Opponents of the law, such as the Cato Institute’s Michael Cannon and Jonathan Adler, argue that the IRS does not have the authority to make that change. ..

(Snip)

…The IRS can deviate from “absurd” laws, in theory, but the subsidies language is not absurd. “It might be stupid, but that’s not the test for absurdity,” Cannon says. Similarly, the IRS can deviate in the case of scrivener’s errors — typos, basically — but this is not a typo, Cannon says, because the language was written into repeated drafts of the law.

“They not only keep that language in there, but they even inserted it, this same phrase again, right before passage while the bill was in [Senate Majority Leader] Harry Reid’s office,” Cannon says. “So, it’s not a scrivener’s error, either.”

Finally, the IRS could fill in ambiguous gaps in a law. The problem for the IRS, though, is that the subsidies language is not ambiguous. Even Tribe acknowledged that the language is clear, according to the Fiscal Times.

(Snip)

“The power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice,” Justice Antonin Scalia wrote in an opinion that Roberts joined in full.

Cannon believes Roberts is unlikely to go through the legal gymnastics used when he upheld the individual mandate as an exercise of Congress’s taxing power, even though it was written into law as an unconstitutional penalty.

“That was a question of congressional power under the Constitution, and this is a question of IRS power under the ACA and Supreme Court precedents,” Cannon says. “The IRS has absolutely zero independent power to tax and borrow and spend. It can only do that which is delegated to it by Congress.”