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A new, potentially very serious blow to Obamacare law

From the breaking news department:

The federal Court of Appeals for the District of Columbia has ruled that, in states that have declined to set up their own health care exchanges, Americans who have used federal exchanges to get health insurance under the Affordable Care Act are not eligible for subsidies.

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It’s only one court (although a very influential one) and it was a 2-1 ruling. Obviously this will have to be decided by the U.S. Supreme Court. But, according to the NYTimes coverage, if the ruling holds up it “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.”

The liberal ThinkProgress site concentrates its coverage on the Republican origins of the two judges who formed the majority.

Comments (36)

  1. Submitted by James Hamilton on 07/22/2014 - 11:28 am.

    How will GOP controlled states

    that refused to create state exchanges blame Obama for this one?

  2. Submitted by Paul Brandon on 07/22/2014 - 12:37 pm.

    Keep watching

    Two courts just ruled to the contrary.
    The game has just started. As the Brits say; it’s early times.

  3. Submitted by Peder DeFor on 07/22/2014 - 12:51 pm.

    Writing a Law

    The entire fault here lies with those who couldn’t bother to actually read the law before it was passed. Well, some portion of the blame goes to whoever wrote it wrong too. But seriously, read the text.
    Of course, if the Dems had taken the time to actually write a good law, they could have avoided many of the problems they’ve had over the past five years…

    • Submitted by RB Holbrook on 07/22/2014 - 02:05 pm.

      But, seriously

      The fault lies with the judges who decided not to follow the long-standing rule of decision that administrative agencies’ interpretations of the law are to be given broad deference.

      Of course, if the Repubs had acted like adults and participated in the legislation to begin with, we could all have avoided the many problems we’ve had over the past five years . . .

      • Submitted by Peder DeFor on 07/22/2014 - 02:54 pm.


        The fault lies with those who wrote the wrong thing into law and those who voted that wrong thing. Just because they voted for something that is screwed up doesn’t mean that they can simply stand back now and say ‘well, what we MEANT to vote for’… That’s not how written laws work.

        And double nonsense on the ideas that the Repubs have somehow not been the participating in the legislative process. They aren’t the ones that have tried to rule by executive fiat. They have voted against things that they were *elected* to vote against. Elected by people who believe that, among other things, Obamacare was enormous mistake. That’s part of the process.

        • Submitted by RB Holbrook on 07/22/2014 - 03:17 pm.

          Triple nonsense!

          There is a less-polite term for the idea that the big, bad liberals have shut the Republicans out of the legislative process, but I’m sure that moderation would not let it go by. Remember that the Republicans held a meeting on Inauguration Day to firm up strategy for opposing anything and everything President Obama proposed. Incidentally, were they “elected to vote against” Obamacare before it was even proposed? Quadruple nonsense.

          Quintuple nonsense (or its less-genteel synonym) is reserved for the whole “executive fiat” meme. President Obama has used executive authority less than his predecessor.

          You are spared sextuple nonsense on the idea that the “wrong thing being written into law” was the basis for the court’s decision, and the tacit idea that the IRS is not entitled to any deference in interpreting the laws it is supposed to enforce. I’m guessing you haven’t read the decision yet.

      • Submitted by Steve Titterud on 07/25/2014 - 09:11 am.

        Sorry, but the Republicans were completely iced out of…

        …the process of deciding what was going to be in this law.

        How soon we forget !! They were smacked down upon over and over again in all committee and subcommittee hearings that took part in the construction of the law. They were not allowed to take a meaningful part, nor were any of their attempted suggestions ever given serious consideration by the Democratic machine of the day.

        This is one of the reasons why the Republicans in the House are still foaming at the mouth over the ACA, and have held so many fruitless votes to repeal it. They were wronged, and the Democrats rubbed it in their noses and danced on their heads, as Nancy Pelosi LOVED to intone to her Republican opponents, “Elections have consequences !”

        At the time, the Republicans howled and howled about how it was all being shoved down their throats, but no one was listening then – and even now, people don’t remember. How soon we forget !!

        There is a reasonable question here whether the Democrats helped to create this duel-to-the-death over Obamacare. Perhaps if they had allowed some kind of meaningful participation by the Republicans, maybe thrown them a bone or two, the current enmity might be mitigated. But no, the Democrats were absolutely full of their power at the time and were not going to give an inch.

        I love to demonize the Republicans as much as the next person, but let’s not confuse this with venerating the Democrats, who also have plenty to answer for.

        • Submitted by RB Holbrook on 07/25/2014 - 10:14 am.

          Iced out

          The Republicans iced themselves out. Remember when Jim DeMint said “If we’re able to stop Obama on this it will be his Waterloo. It will break him?” That was in July of 2009–months before the final vote. Republicans wanted nothing to pass. Their plan was to delay and delay, hopefully until after the midterm elections. In any event, Republican opposition to Democratic health care efforts goes back to 1993, when the fear of the strategists was that the American people would like the healthcare too much, and continue to reward Republicans (so said “moderate” Orrin Hatch).

          Anyway, what were the Republican proposals? Sell health insurance across state lines? Big plans already do that, and why do we not want the states to regulate insurance sold within their borders? Cap medical malpractice awards? Stiff the injured, reward business, and accomplish nothing meaningful. Individual savings accounts? Sounds great–all we need is money to put aside.

          “Shoved down tehir throats” mans their plans to block any health care reform were unsuccessful. They can howl and howl all they want, not that they need permission. If the Republicans were frozen out of the debate, they have only themselves to blame.

          • Submitted by Steve Titterud on 07/25/2014 - 12:13 pm.

            OK, so the Republicans had few virtues in the process, but…

            …it remains true that the Democrats controlled every single committee and subcommittee, where the rigid party line voting smacked down every last proposal that wasn’t previously approved in the Speaker’s office.

            Were those suggestions and motions all uniformly bad ? I don’t really know, but surely something could have been offered to the other side so they could take a small, even petty victory back to their supporters to show they got SOMETHING. This is how you salve wounded egos, break an impasse, and perhaps engender a little cooperation in future: offer the other side a way to save a little face.

            But the Democrats at the time would have none of it, and now the Republicans will have none of it either.

            If your contention is that the Democrats are heroes and the Republicans villains, I’ll agree only with the Republican part. And I’m not saying the Republicans didn’t participate in icing themselves out. People like Jim DeMint WANTED to be iced out, as it helped their careers. The Democrats made things worse than they had to be.

            • Submitted by RB Holbrook on 07/25/2014 - 01:07 pm.

              Salving wounded egos

              I have never known that to be a part of the legislative process.

              • Submitted by John Appelen on 07/26/2014 - 09:35 am.


                Of course, letting team members save face is part of the legislative process.

                Just like working with an team or group of people.

  4. Submitted by Peder DeFor on 07/22/2014 - 03:20 pm.

    From the Decsison

    “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.”

    Makes sense to me. You have to treat the law as it is written, not what how you wish it had been written.

    • Submitted by RB Holbrook on 07/22/2014 - 04:22 pm.

      Other points

      Certainly courts have to “treat a law as it is written.” When a law is unclear, the courts must interpret it giving due deference to Congress. Courts are, however, supposed to be mindful of their obligation to uphold laws whenever possible (even those advocated by the Obama administration–sorry to have to be the one to break that to you). Laws are entitled to a presumption of validity, regardless of their sponsorship. The interpretation an administrative agency gives the laws it is charged with enforcing is also given deference.

      The problematic part of the ACA says that he federal government may “establish and operate” health exchanges and “may take such actions as are necessary to implement” the aims of the law. Well and good; however, another part of the law says that subsidies may be provided for insurance purchased through an exchange “established by the state.” The Fourth Circuit Court of Appeals noted the ambiguity, read the law as a whole (did I mention we read the entire statute when we interpret it, not just selected bits of outrage?) and decided that the IRS’s construction of the law as allowing subsidies to be paid to those who purchase insurance through federally-established exchanges was valid.

      In other words, applying the standard principles of statutory construction and judicial review, the subsidies remain valid. Makes sense to me.

  5. Submitted by Dimitri Drekonja on 07/22/2014 - 03:53 pm.

    Republicans began this silly idea of expanding the use of private insurance by use of subsidies and a mandate to buy insurance; somehow when it was their guy in one state it was OK, but once the Romney model was made national, it was tyranny incarnate.

    The democrats made the mistake of assuming that by moving forward a plan with Republican roots, it would naturally receive the support of those who supported it back when it was just in Massachusetts. If they had known that the Republicans would act as if it was a huge government takeover, they might have done what is needed, and pass a single-payer plan. Still would have had no Republican support, but it would eliminate the waste/redundancy associated with the thousands of individual insurers, decoupled employment and health insurance, and allowed docs/hospitals to compete on quality– not who could schmooze the best deals with insurers.

    As it is, we’ll have to wait for this marginal improvement (the ACA) to have it’s chance; when costs are still double the next most-expensive country, outcomes continue to lag, and we still have millions of un- and underinsured, then we’ll hopefully take the needed step of joining the rest of the developed word by providing healthcare for all, and stop wasting our dollars on supporting the current administrative bloat.

  6. Submitted by Ray Schoch on 07/22/2014 - 05:54 pm.

    Obamacare blow

    Amen to Dimitri Drekonja.

    Mr. DeFor’s statement, “…You have to treat the law as it is written, not what how you wish it had been written…” is a valid point, trumped by RB Holbrook, in my estimation. And beyond that, I think Dimitri has succinctly stated the problem.

  7. Submitted by Neal Rovick on 07/23/2014 - 07:25 am.

    The end-game has changed and the Republicans pursuing the closure of the ACA have not realized it.

    How much applause will those who benefit by the act have for those who triumphantly shut it down? How much applause will those who see the effect of the loss of insurance have for the Republicans?

    Shedding crocodile tears over the uninsured does little to answer the very real issues.

    The Republicans are chasing a narrower and narrower segment of voters.

  8. Submitted by Connie Sullivan on 07/23/2014 - 10:46 am.

    Also, before we all go screaming to the exits of this item of right-wing-created political/judicial theater, let’s keep in mind that this unenlightened decision was made by just two members of a federal court that has, I believe, eleven members. An appeal will probably go to the full court and be reversed, just on the basis of legislative intent on the ACA and the common good.

    Plus, it’s so easy to read “the state” as equivalent to “government,” and not something like, say, Indiana or Kansas.

  9. Submitted by Thomas Swift on 07/24/2014 - 06:24 pm.

    Drip, drip, drip. As this

    Drip, drip, drip.

    As this ill conceived, thoughtlessly crafted disaster has time to unfold, more and more people will demand it be repealed.

    The Democrats have shifted many of the most painful consequences to take effect until after the mid-terms, it won’t work, but it does guarantee the GOP another bite at the Obamacare apple in 2016.

    Nicely played Ds.

  10. Submitted by Peder DeFor on 07/25/2014 - 07:45 am.

    Actually Intended

    It turns out that this wasn’t an unintentional mistake.

    In case you don’t click through, one of the prime writers of the law as part of a talk back in 2012, said that states that don’t create their own exchange would face problems as they wouldn’t get subsidies. That seems to speak to the intent of the writing.
    Now, I can easily be convinced that this wasn’t what Congress intended but again, part of the problem is that they didn’t know what they were voting for. Maybe if they’d spent more time understanding it, they would have passed a better law.

    • Submitted by Thomas Swift on 07/25/2014 - 08:30 am.

      I admire your persistence and dedication to the truth Peder, but it’s wasted on the Minnpost peanut gallery.

      Please note that the refutations being submitted right now will be sourced to “Salon” or “Wikipedia”. No, these folks are immune to facts and will go to great length to preserve the soothing calm their pie in the sky ideology provides.

      Even the fact that their leadership is on record as having no clue of what it was they were shoveling through congress with the mind numbing idea they needed to pass it to know what’s in it will call them to reason.

      • Submitted by Jonathan Ecklund on 07/25/2014 - 09:48 am.

        Peder, be careful

        Mr. Swift’s admiration comes with some baggage, like his prolific twitter profile. If you want to see Mr Swift’s dedication to ‘truth,’ go there and check it out… including wonderful comments like this:

        “I love leaving skid marks on empty lefty skulls at the Minnpost; there, I said it.”

    • Submitted by RB Holbrook on 07/25/2014 - 10:43 am.

      Two problems with the “smoking gun”

      And I figured them out without recourse to Wikipedia or Salon.

      The law’s architect–Jonathan Gruber–was not a member of Congress, so his words about what the law was intended to do are just words. Whatever he may have meant by his interpretation of the law (and remember, he made his remarks when he was working as a paid consultant developing state exchanges) is entitled to no more weight than the interpretation of any other citizen.

      The other problem is that, when it is necessary to interpret the intent of Congress, courts look first to the language of the entire law (not merely, as I mentioned before, isolated words or clauses) to discern intent. The interpretation of Mr. Gruber, as well as that of the two judges on the DC Circuit, leads to the law becoming unworkable. It is presumed that Congress did not intend an unworkable result.

      • Submitted by Peder DeFor on 07/25/2014 - 03:44 pm.


        No Gruber wasn’t a member of Congress, but he was one of the people most responsible for creating the law. 1) His judgment is superior in this instance since most congresspeople had about 24 hours with the bill before they had to vote on it and 2) his understanding of the bill was that states would be treated differently if they didn’t set up an exchange. In other words, the different standard was meant as a carrot to push states into building exchanges.
        The DC district court did look at the whole law. No, this interpretation doesn’t make the law ‘unworkable’, it just makes it more expensive for some people. I’ll note that there is no provision in the ACA for the US territories so they’re messed up right now. Should we just *assume* that they were meant to be covered in the same way as the rest?

        • Submitted by Peder DeFor on 07/25/2014 - 04:07 pm.

          Member of Congress

          Here is Sen Max Baucus discussing how tax credits are only available through state exchanges.

        • Submitted by Jonathan Ecklund on 07/25/2014 - 04:16 pm.


          The US territories (Guam, Puerto Rico, the Marianas, and the Virgin Islands (and D.C. itself, I think) have recently been exempted from certain requirements under the ACA. They were subject to some burdens and requirements under the ACA but not others… my understanding is that health insurance in the territories is required to provide coverage for anyone who applies for it, but there is no coverage mandate as there are in the states, which led to an incredible imbalance. Correct me if I am wrong on that, please.

          Now, the way I see it, this opens up another question entirely, which is to grant congressional representation to the territories, or recognize them as states. If we bring them into the political process, they can more effectively advocate on their own behalf and have a hand in crafting policy.

        • Submitted by RB Holbrook on 07/25/2014 - 04:43 pm.

          Mr. Gruber

          Once again, the remarks of a proponent of legislation are not relevant. Since he was not a member of Congress, what he thought doesn’t matter. Legislative intent is the intent of the members of Congress who voted for the law, and no one else. Assuming, however, that it did matter:

          “His judgment is superior in this instance . . .” Maybe so, but since he didn’t get a vote, his judgment counts for nothing.

          As far as the territories go, if you look past the right-wing websites that have begun to shriek about this issue, the literal language of the ACA does indeed refer only to states. The administration has told the territorial governments that a previous interpretation that territories were covered by the law was incorrect, and territories are not required to set up exchanges (I understand that they wanted it that way).

          “The DC district court did look at the whole law.” The DC District Court looked at the whole law, and found that the construction put on it by the IRS was correct. Two judges of the DC Court of Appeals disagreed, and no, they did not look at the entire law.

          • Submitted by Peder DeFor on 07/25/2014 - 06:31 pm.

            Architecht, not Proponent

            RB, he wasn’t merely some guy who supported it, he was one of the chief architects. He was involved with writing it. At times he said that he understood the whole law better than any other single person. Gruber was THE go to guy for the NYT and other publications when it came to the ACA. His understanding of the bill was that there was a different set up for state and federal exchanges. That shouldn’t be dismissed.
            As I noted in a separate post, Sen Max Baucus understood that it would only apply to the states. Having said that, it’s especially silly to rely only on voting members here. It’s not like they had time to go over the legislation line by line to make sure that everything was correct. This was rushed to their desks and they rubber stamped it.
            It was a terrible process and that helped make a bad bill into a terrible one.

            • Submitted by RB Holbrook on 07/28/2014 - 09:23 am.

              Having said that . . .

              Mr. Gruber now believes he misspoke.

              I don’t understand why it is so difficult to comprehend that the subjective intention of supporters/architects/really significant people has nothing to do with it. What matters, and what has always mattered to any court that is attempting to divine the intention behind a law, is the express intent of the legislators who voted on it. Did they have enough time to go over it? Again–it doesn’t matter. There was a vote on written legislation, the legislation passed, and that is what we look at. It is especially silly, to use your words, that we consider anything else, contrary to the settled rules of statutory interpretation (which go beyond “I don’t like this law. There must be a reason to toss it.”).

            • Submitted by RB Holbrook on 07/28/2014 - 12:19 pm.

              What you are talking about

              Everything you are bringing up–what the architects of the bill thought, what some members of Congress may have been thinking in their hearts–are matters to be addressed by Congress. They are not anything for the courts to consider.

              • Submitted by Peder DeFor on 07/28/2014 - 03:33 pm.

                Got it.

                So it doesn’t matter what the guy who had the biggest hand in writing the bill thinks that it says. It doesn’t matter what actual members of Congress thought it said. It doesn’t even matter what the language of the bill says. What matters is that the screw up will hurt Dems politically and therefore the courts should stretch themselves to comply with how the bureaucracy is trying to paper over the bad parts.
                Got it.

                • Submitted by RB Holbrook on 07/28/2014 - 03:52 pm.

                  The courts have a limited role here, but the last time I checked, that role did not include “savage Obama administration initiatives and patch together some half-baked reasons.”

                  The rules for the courts to follow in interpreting statutes and administrative actions are not complicated, but if you don’t want to/can’t understand them, there is nothing more to be said.

      • Submitted by Thomas Swift on 07/25/2014 - 03:54 pm.

        Rather than context, it sounds like you’re hoping the court gets lost in the 11,000 pages of cryptoclastic twaddle the Democratic majority jammed through.

        Best of luck, but I’m betting you’re gonna be disappointed when it gets to SCOTUS

  11. Submitted by Dennis Tester on 07/25/2014 - 11:30 am.

    An interesting interpretation

    “Under previous court decisions, Congress can’t force state governments to administer federal laws. So congressional Democrats, seeking to muscle states into creating their own health insurance exchanges, chose to provide subsidies only for those states. Those opting for the federal exchange would have to explain to voters why they weren’t getting subsidies.

    This attempt to muscle the states failed. In August 2011, when the IRS issued its regulation, only 10 states had created their own exchanges, and 17 states explicitly refused to do so. Health and Human Services Secretary Kathleen Sebelius kept extending deadlines to force states to create their own exchanges.

    Congressional Democrats and the Obama administration bet that they could force the states to do their will. When they lost their bet, the administration ignored the Constitution and ordered the spending of monies that Congress never authorized.”

    – Michael Barone

    • Submitted by RB Holbrook on 07/25/2014 - 12:05 pm.

      Interesting for two reasons

      1. I don’t understand how states were being “muscled” or “forced” into creating exchanges. Overheated prose seems to be the only explanation.

      2. How does anyone who quotes Townhall without apparent irony get away with sniping about a “dumbed-down citizenry?”

      • Submitted by Peder DeFor on 07/25/2014 - 03:51 pm.


        1. If you don’t understand, then maybe you could read about the process. Frankly, there was a lot here that I didn’t remember but there was, in fact, attempts made to force the states. They wanted to pull *all* Medicare funding until they were stopped.
        2. Say what you will about Townhall but Michael Barone is a very smart guy and shouldn’t be simply dismissed.

        • Submitted by RB Holbrook on 07/28/2014 - 09:25 am.

          A smart guy

          Language is still inflammatory, and thus insubstantial, if it comes from a smart guy. Townhall is not trying to present intelligent, substantive discourse, it’s just feeding red meat to the rubes.

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