In Blow to Health Law, Appeals Court Limits Subsidies

[Jahungo]

WASHINGTON — In a ruling that could upend President Obama’s health care law, a federal appeals court ruled Tuesday that the government could not subsidize premiums for people in three dozen states that use the federal insurance exchange. The 2-to-1 ruling could cut off financial assistance for more than 4.5 million people who were found eligible for subsidized insurance in the federal exchange, or marketplace.

Under the Affordable Care Act, the court said, subsidies are available only to people who obtained insurance through exchanges established by states.

http://www.nytimes.com/2014/07/23/us...subsidies.html

[Jahungo]

If upheld, this decision would gut the ACA, unless the federal government could get states to set up exchanges.

The article mentions that further court cases are ongoing, but doesn't really detail on what will actually happen next.

Edit: On the other hand, now that people have subsidies from the federal exchanges, taking them away will probably not be popular. Perhaps there would be enough of a response that the law could be amended.

[GenYus234]

I'm not getting the logic behind the quoted reasons for the lawsuit.

The WV carpet store owner can't afford to buy health care insurance for himself, so he sues so he won't get a subsidy to make buying health care insurance cheaper to buy? Is this just a preliminary suit to a follow-up that challenges the mandate on the basis that without the subsidy, it is too burdensome?

[Jahungo]

The article has been replaced (with the same url) by one that also describes an additional conflicting ruling that occurred shortly thereafter.

Courts Issue Conflicting Rulings on Health Care Law

WASHINGTON — Two federal appeals court panels issued conflicting rulings Tuesday on whether the government could subsidize health insurance premiums for people in three dozen states that use the federal insurance exchange. The decisions are the latest in a series of legal challenges to central components of President Obama’s health care law.

The United States Court of Appeals for the Fourth Circuit, in Richmond, upheld the subsidies, saying that a rule issued by the Internal Revenue Service was “a permissible exercise of the agency’s discretion.”

The ruling came within hours of a 2-to-1 ruling by a panel of the United States Court of Appeals for the District of Columbia Circuit, which said that the government could not subsidize insurance for people in states that use the federal exchange.

[erwins]

Originally Posted by GenYus234

I'm not getting the logic behind the quoted reasons for the lawsuit.

The WV carpet store owner can't afford to buy health care insurance for himself, so he sues so he won't get a subsidy to make buying health care insurance cheaper to buy? Is this just a preliminary suit to a follow-up that challenges the mandate on the basis that without the subsidy, it is too burdensome?

Yeah, I don't get how he has standing, or where he has standing, how his claim is ripe. I haven't seen the actual decision, or a more detailed report, so it may be there. But the only thing I can see him arguing is, these subsidies might go away because they are unauthorized. But I don't see how that could be ripe for review--the subsidies might never go away, because the government wants to pay them. He should have to wait until he is actually harmed by a subsidy going away.

[A Turtle Named Mack]

I think he was talking about buying insurance for his entire work staff. I saw another report on this from NBC that said that the employer mandate only applies in those states where the employees have subsidized ACA coverage available. No subsidies would then mean no employer mandate.

[Darth Credence]

AIUI, he is suing because he does not want to get health insurance. He lives in a state without exchanges. If he could not get subsidies, then the cheapest plan he could get would cost more than 8% of his income. If the lowest plan costs more than that, the person would be exempt from the penalty. He is suing because with the subsidies, he has to decide between paying $95 a year to not be insured, or $21 a year to be insured (after subsidies).

[erwins]

Those are very different scenarios between ATNM and Darth Credence. I'm recovering from some minor surgery, so I'm not up for doing a bunch of research. But if Darth's scenario is correct, then I don't think the claim ought to be justifiable. It might be in ATNM's scenario.

[GenYus234]

The employer mandate only applies to companies with more than 50 employees (also Federal contractors?). I wouldn't think that an employer with a single carpet store would employ 50 full-time employees.

[LadyLockeout]

That depends on how well he's doing and if they offer installation packages. Carpet installation teams can be 2-10 guys, depending. Sometimes more, if it's for office buildings, etc.

[Darth Credence]

Originally Posted by erwins

Those are very different scenarios between ATNM and Darth Credence. I'm recovering from some minor surgery, so I'm not up for doing a bunch of research. But if Darth's scenario is correct, then I don't think the claim ought to be justifiable. It might be in ATNM's scenario.

Perhaps we should look at the actual decision(.pdf warning) as it was handed down:

Originally Posted by United States Court of Appeals
for the District of Columbia Circuit

The district court determined
that at least one of the appellants, David Klemencic, has
standing. Klemencic resides in West Virginia, a state that did
not establish its own Exchange, and expects to earn
approximately $20,000 this year.1
He avers that he does not
wish to purchase health insurance and that, but for federal
credits, he would be exempt from the individual mandate
because the unsubsidized cost of coverage would exceed eight
percent of his income. The availability of credits on West
Virginia’s federal Exchange therefore confronts Klemencic
with a choice he’d rather avoid: purchase health insurance at a
subsidized cost of less than $21 per year or pay a somewhat
greater tax penalty.

This is not about the employer mandate, just the individual, and how he would be exempt from the individual if he couldn't get subsidies.

[erwins]

To clarify, I didn't notice until I saw the quote of my post that the word I typed, "justiciable" got autocorrected to justifiable, which is definitely not what I meant.

Seeing that quote from the decision, I guess he's arguing that if he were not eligible for a subsidy, he could not be penalized for not buying insurance, so he is harmed by having to pay anything at all. I'm still not sure that puts him in a position to claim that the government subsidy he is in fact receiving is not authorized by Congress. But again, fuzzy from post surgery--maybe it will all make sense to me tomorrow.

[A Turtle Named Mack]

Jonathan Gruber is the MIT economist who helped congressional Democrats write the Patient Protection and Affordable Care Act in 2009. He has been sharply critical of Halbig v. Burwell, a lawsuit alleging the Obama administration is illegally subsidizing health insurance for 5 million Americans in the 36 states with exchanges established by the federal government. The PPACA offers those subsidies to only those who enroll through an exchange “established by the State.” (Disclosure: I helped lay the groundwork for Halbig and three similar lawsuits.)

...
Gruber then became part of the story on Thursday when a video surfaced in which he espouses the very interpretation of the law he now publicly derides as “screwy,” “nutty” and “stupid.” In 2012, Gruber told an audience: “If you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits.”

http://www.politico.com/magazine/sto...ca-109466.html

The link to Forbes quoting the original position does not seem to work. Here's video:
https://www.youtube.com/watch?v=34rttqLh12U
https://www.youtube.com/watch?v=zbD5iQQS5KA

[Rebochan]

Welp, nothing to do but strip health insurance from 5 million people. That's what you want, right? So clearly this Youtube video of a guy pointing out how godawful all these states that deliberately screwed over their own residents just to stick it to Obama is a great excuse!

[A Turtle Named Mack]

Originally Posted by Rebochan

Welp, nothing to do but strip health insurance from 5 million people.

Well, that is what the ACA did - stripped over 5 million people of plans they liked, could afford, and gave them access to the doctors and hospitals they preferred, narrowing the choices in many cases to the point of having no practical access for needed care.

[Chloe]

The fact that those plans were actually crap, and people only liked them because they had the illusion of cheap coverage, is also relevant here.

Just made the edit window to add this article.

ETA:http://www.motherjones.com/politics/...alth-insurance

[Rebochan]

Originally Posted by A Turtle Named Mack

Well, that is what the ACA did - stripped over 5 million people of plans they liked, could afford, and gave them access to the doctors and hospitals they preferred, narrowing the choices in many cases to the point of having no practical access for needed care.

You realize most of those people didn't have insurance at all, right? Oh, of course not, that's not the talking point. The talking point is to ignore the poors and focus on us bring mildly inconvenienced.

Hi, I just lost my job and I have four prescriptions and need regular doctor's visits. Last time this happened, I was SOL. This time, because of the ACA Medicaid expansion my state actually took instead of deciding to screw me over to stick it to Obama, I can actually get insurance that will let me stay healthy while I hunt for another job. No, I didn't get to keep my doctors. But your solution wouldn't let me do that either. The obvious solution is an expansion of the program so it's competitive enough that more doctors can afford to accept it. But given that our House of Representatives decided to just sue the White House instead of do anything useful, that won't happen.

[erwins]

I'm sure that when mandatory car insurance of certain levels went into effect, lots of people "lost" their existing subpar car insurance too. That doesn't mean requiring adequate insurance is bad. And if the insurers had people clamoring to stay on those plans, they could have continued to offer them under the grandfathering clause. It was insurers who decided to stop offering those plans.

[wanderwoman]

I think it's a lost cause, Chloe. That same article has been posted in previous discussions about the subject, and was completely ignored. Apparently the point is that people should be allowed to keep their crap policies, even if they don't know they are crap policies until they really need them and find that they might as well have flushed their premium payments down the toilet.

[Chloe]

What do we want? The illusion of healthcare!
When do we want it? Until we get sick!