ACA trouble. Appeals court rules subsidies illegal

[2B]

If Porky shuts down one of the single most important topics for many early retirees (pre Medicare) then Porky should just shut down ER.org.

To avoid it, we need to not talk about "fair" and "fix opportunities" and refer to "other groups." There is much I'd like to change, fix and disparage "other groups" but I can't do any more than pontificate. Reality is what we have. The court rulings are just a shift in the reality from yesterday.

 

[donheff]

I'm not so sure it was a total coincidence. The 4th Circuit in Richmond is generally considered "liberal" but then so is the DC court. The DC court has had additional members added to make it also be a reliable "liberal" leaning court. I think both of these rulings were 3 judge panels so the full circuit court can rehear the appeal. That heavily favors the ACA subsidies being upheld. This can still be appealed to SCOTUS; but without a conflicting set of rulings by the Appeals courts, SCOTUS could take a pass. This allows the Appeals courts to remain in force. I do think that SCOTUS will eventually get involved if for no other reason that with a 5-4 "conservative" leaning I suspect they want to go on the record even if they will only uphold the Appeals courts rulings.

Yup, the DC Circuit decision is being pushed for an en banc decision by the whole court and could easily get reversed in which case the Supremes would probably ignore the issue.

 

[2B]

Yup, the DC Circuit decision is being pushed for an en banc decision by the whole court and could easily get reversed in which case the Supremes would probably ignore the issue.

It's only my opinion but I do expect that Richmond and DC will uphold the subsidies. Then, I do expect SCOTUS to hear it. of course, somebody could always take it to New Orleans. That would probably get us back to conflicting rulings.

Not having read the bill I'm finding out what's in it along with what appears to be many of the people that voted for it. I'm concerned that if the language repeatedly referred to subsidies to only state exchanges that the judicial branch would just brush it aside. Even if the subsidies are thrown out somewhere along the line, I believe the fix by establishing state portals would be very minor.

I very much doubt that this would be the death of the ACA.

 

[easysurfer]

As long as health insurance, current or future doesn't have a restriction on pre-existing conditions, I'm a happy camper. Not that I have any major ones, but you never know

It will be interesting to see what happens when the dust settles.

 

[pb4uski]

So the states just "subcontract" the running of their exchange to the feds.........problem solved with a simple contact. I'm not even sure if you need a front end unique to the state in that case since a resident will select the state they reside in at the start of their websurfing.

 

[ziggy29]

So the states just "subcontract" the running of their exchange to the feds.........problem solved with a simple contact. I'm not even sure if you need a front end unique to the state in that case since a resident will select the state they reside in at the start of their websurfing.

This may be all that is needed -- perhaps treating each state as its own "virtual exchange" with some of its own state-specific stuff in the front end.

That said, some states may refuse to do even this, especially the ones most ideologically opposed to the law.

 

[ls99]

Seems to me the language of the law is plain. Refers to states, not the feds.

 

[nash031]

I agree this is going to SCOTUS quickly. This is an interesting legal question. The intent was certainly not reflected in the actual language of the bill. So, what's a law? What we'd like or what it says?

It is interesting.

I expect the SCOTUS decision to be 5-4 declaring subsidies illegal on federal exchanges. I base that on the fact that thus far 4 Democratically-appointed judges say it's legal, and 2 Republican-appointed judges say it's illegal.

How DARE I insinuate that politics factor into the judciary!?!

 

[foxfirev5]

As long as health insurance, current or future doesn't have a restriction on pre-existing conditions, I'm a happy camper. Not that I have any major ones, but you never know

It will be interesting to see what happens when the dust settles.

I'm in the same boat. Looking back just a few years ago the big concern was a lack of options and being thrown into a high risk pool at best. In researching the subject I found that it didn't take much to qualify for a pre existing condition.
No doubt it's going to be expensive but at least it's something. Since my DW and I have no desire to live on less than 60k per year we were out of the running for the subsidy for about half the years to 65 anyway. Now it looks like we may have to figure out a new strategy for this never ending game.

 

[heeyy_joe]

Single payer system here we come!

 

[Corporateburnout]

I'm glad I live in MA. Even if the ACA is repealed MA will revert back to "Romney care".

 

[daylatedollarshort]

This may be all that is needed -- perhaps treating each state as its own "virtual exchange" with some of its own state-specific stuff in the front end.

That said, some states may refuse to do even this, especially the ones most ideologically opposed to the law.

That will make for a lot of unhappy campers in the states where people are getting subsidies now.

 

[DallasGuy]

I'm thinking of people with pre-existing conditions who are now getting their insurance through the federal exchange. If those people get a huge monthly increase because of the removal of the subsidies, they will not be able to get an alternative insurance on the open market (individual policy) that covers their pre-existing condition. My understanding is that if someone applies for insurance on their own (not going through the exchange), the insurance companies can still consider their pre-existing conditions. Is that correct?

So if my statements above are correct, in effect most of those people with pre-existing conditions would be stuck on the federal exchange with much higher premiums with little or no other options other than to move to a state that has it's own exchange. That would be a huge mess, especially if those people previously had a good plan that was discontinued by their insurance company...and forced onto the exchange.

Please correct me if my understanding of this is incorrect.

Edited later: I called my insurance provider, Cigna, and they told me that once a person buys their insurance on the ACA exchange, Cigna will no longer offer a plan to that person that is not on the ACA exchange. So my understanding above was incorrect. So it sounds like a person would have no other alternative other than to pick a cheaper plan on the ACA exchange if/when their premiums rose because of the subsidy removal....or move to a state that has it's their own exchange. Also, pre-existing conditions no longer matter once you switch to the ACA exchange because you can never again apply for coverage that takes pre-existing conditions into consideration.

 

[ziggy29]

That will make for a lot of unhappy campers in the states where people are getting subsidies now.

Yes, it would. And they would have to explain to their constituents why they pay taxes into the federal subsidy program without receiving any of the benefits of said taxes.

 

[DallasGuy]

This may be all that is needed -- perhaps treating each state as its own "virtual exchange" with some of its own state-specific stuff in the front end.

That said, some states may refuse to do even this, especially the ones most ideologically opposed to the law.

I can almost guarantee that Texas will not create their own exchange. I'm screwed!

 

[ziggy29]

I can almost guarantee that Texas will not create their own exchange. I'm screwed!

I live here too, and while I don't think they would create their own exchange in the current climate, would they use this "workaround" to use their own state wrapper around the current federal marketplace and call it their state exchange? It would cost very little and save a lot of subsidies for Texans. Like I said, would they rather explain to the people of Texas why they are paying taxes into a system that gives no money back to Texans?

 

[daylatedollarshort]

Yes, it would. And they would have to explain to their constituents why they pay taxes into the federal subsidy program without receiving any of the benefits of said taxes.

Politicians in states without Medicaid expansion are having to do that now. Federal tax dollars are being used for Medicaid expansion, but only flowing back to states that have it in place. The other states are paying for it through federal taxes and yet not getting the benefits.

 

[Brat]

One way to avoid this issue is for the Feds to offer states the opportunity to buy the software for their own exchange for a nominal fee.

I think the reason why Oregon's site failed is that they didn't have experienced IS project managers and tried to do too much. They bit of more than they could chew and choked on it. Washington State, being close to Microsoft software engineers, doubtless had expertise they leveraged.

 

[Fermion]

One way to avoid this issue is for the Feds to offer states the opportunity to buy the software for their own exchange for a nominal fee.

I think the reason why Oregon's site failed is that they didn't have experienced IS project managers and tried to do too much. They bit of more than they could chew and choked on it. Washington State, being close to Microsoft software engineers, doubtless had expertise they leveraged.

Not only Microsoft engineers but this area has lots of Amazon and Google software engineers as well (plus oodles of startups). Practically all of my friends are software engineers living in and around Seattle.

 

[AllDone]

This may be all that is needed -- perhaps treating each state as its own "virtual exchange" with some of its own state-specific stuff in the front end.

That said, some states may refuse to do even this, especially the ones most ideologically opposed to the law.

Here's a better analysis than I could write:

One provision of the Affordable Care Act, for example, indicates that any “exchange” shall be an “entity that is established by a State” — language which indicates that federally run exchanges will be deemed to be “established by a state.” This may seem counter-intuitive, but Congress has the power to define the words that it uses in any way that it wants, even if those words are defined in ways that are unusual. Another provision of the law provides that, when a state elects not to run an exchange, the Secretary of Health and Human Services “shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” Thus, the law not only authorizes the Secretary to stand in the state’s shoes when it runs an exchange, it also empowers her to implement the law’s “other requirements.”

[mod edit] Source here

It's extremely unlikely that this ruling will stand when the entire court hears the case.

 

[Brat]

The Amazon website structure probably is the one most similar to a state insurance exchange.

Did anyone read the Time article about the talent that rescued the Fed website?

 

[donheff]

I think the speculation that the Feds can wrap a state logo on a Federally run exchange will not work if the DC Circuit's decision ends up being sustained by the Supreme Court. As the decision states, the ACA holds that the tax credit is available only to subsidize the purchase of insurance on an “Exchange established by the State under section 1311 of the [ACA].” Section 1311 already provides that if a state refuses or is unable to set up an Exchange, the federal government, through the Secretary of Health and Human Services (HHS), “shall . . . establish and operate such Exchange within the State.”If "such exchange" is not already a qualifying exchange I doubt the courts will allow some logo legerdemain to get around the problem. This is especially true since the court found that along with authorizing the subsidies the IRS rule imposes ACA mandates and penalties that would not apply if "such exchange" is not viewed as a qualifying exchange.

This one could be a bigger problem than I expected.

 

[samclem]

I think the speculation that the Feds can wrap a state logo on a Federally run exchange will not work if the DC Circuit's decision ends up being sustained by the Supreme Court.

But if a state now wants to have an exchange, and if the feds already have one up and running for that state, why couldn't the code be transferred and the $$ to run the thing transferred as grants form HHS? Or, easier yet, the states "run" their exchanges by paying a very nominal fee to the federal government to have their contractors do it?
If there is a desire in DC to meet the letter of the law, and if the states want to meet the letter of the law (because of constituent pressure), I just don't think the courts will get into the details to assure the exchanges are "statey" enough. Once the Feds and the state declare the thing to be a state exchange, it will be accepted as such.

I just don't think this will be the thing that kills the construct set up by this law.

 

[ziggy29]

But if a state now wants to have an exchange, and if the feds already have one up and running for that state, why couldn't the code be transferred and the $$ to run the thing transferred as grants form HHS? Or, easier yet, the states "run" their exchanges by paying a very nominal fee to the federal government to have their contractors do it?
If there is a desire in DC to meet the letter of the law, and if the states want to meet the letter of the law (because of constituent pressure), I just don't think the courts will get into the details to assure the exchanges are "statey" enough. Once the Feds and the state declare the thing to be a state exchange, it will be accepted as such.

I just don't think this will be the thing that kills the construct set up by this law.

I tend to agree. There seem to be any number of ways to substantially use the existing infrastructure in a way that minimally turns the federal exchange into a number of virtual state exchanges, just enough to pass the "smell test" to consider them state exchanges. And some of them don't require any further Congressional action.

 

[donheff]

But if a state now wants to have an exchange, and if the feds already have one up and running for that state, why couldn't the code be transferred and the $$ to run the thing transferred as grants form HHS? Or, easier yet, the states "run" their exchanges by paying a very nominal fee to the federal government to have their contractors do it?
If there is a desire in DC to meet the letter of the law, and if the states want to meet the letter of the law (because of constituent pressure), I just don't think the courts will get into the details to assure the exchanges are "statey" enough. Once the Feds and the state declare the thing to be a state exchange, it will be accepted as such.

I just don't think this will be the thing that kills the construct set up by this law.

I agree with what you say f the state wants to work with the Fed. I suspect they can fairly easily work around the problem in that case. I think that may apply to about 1/3, maybe even 1/2, of the states not operating their own exchanges. The rest will laugh as the subsidies disappear. They don't want the Feds paying for Medicaid, they won't want them paying for subsidies. And along with the subsidies would go employer mandates and penalties. Those blows to Obamacare will be irresistible to states that strongly object to it. We already have health care have and have not states -- if sustained, the DC Circuit analysis would make that an order of magnitude worse.