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Federal Exchange - ACA subsidies in jeopardy
Old 10-25-2013, 09:23 AM   #1
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Federal Exchange - ACA subsidies in jeopardy

It may be a case of don't count your chickens before they hatch.

Court could block Obamacare subsidies in 34 states - Diana Furchtgott-Roth - MarketWatch
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Old 10-25-2013, 10:19 AM   #2
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Wow!
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Old 10-25-2013, 11:24 AM   #3
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The legal challenges to specific features of ACA will likely go on for years. Which, if any, succeed will be anyone's guess.
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Old 10-25-2013, 11:34 AM   #4
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The title of the linked article is not quite right. It's not "the courts" that might block the subsidies, it is the law itself. The legislation only makes allowance for subsidies to those who buy their insurance policies through "an exchange established by the State."
I think, as in so many similar cases of late, a way will be found to make a law do something different from what it says. Or maybe the States will be able to "establish" that the feds are running things for them. Kinda like "deeming it passed."
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Old 10-25-2013, 11:53 AM   #5
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Not trying to be political, but I bet that if the courts state the the subsidies are not available on the federal exchanges that the people in those states will pretty much tell their elected officials to fix the law...

Some of course will block this fix, but I would think that they might not be reelected...

Just my opinion....
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Old 10-25-2013, 01:53 PM   #6
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The subsidy would be a nice-to-have for me, but in reality it would only be about $100 a month. I'm more interested in making sure they fix my Indian status in my application so I can get the cheapest Bronze plan with no cost sharing (about $200 a month without subsidy, which we can swing).
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Old 10-25-2013, 02:54 PM   #7
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I wouldn't worry about this very much. The case revolves around a scriviners error, where one clause of the law refers to state exchanges regarding the subsidy plan, and the context makes it clear that the subsidy calculation and payments are intended to apply to all policies purchased through all exchanges. A reasonable person would draw the conclusion that this was a simple oversight in the construction of that clause.

It is entirely possible that the court, appellate court, and even the Supreme Court might arrive at an unreasonable conclusion and direct that Congress must clarify the intent of the law, though. (As lawyers, they are extensively trained in the art of straining at gnats.) They pulled this with the Lanham Act as I recall. It would be a very odd result, though, with only residents of selected states eligible for subsidies. This might result in residents of other states pushing for a change to the law, or failing that, for their state to start it's own exchange.
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Old 10-25-2013, 04:20 PM   #8
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Quote:
Originally Posted by M Paquette View Post
I wouldn't worry about this very much. The case revolves around a scriviners error, where one clause of the law refers to state exchanges regarding the subsidy plan, and the context makes it clear that the subsidy calculation and payments are intended to apply to all policies purchased through all exchanges. A reasonable person would draw the conclusion that this was a simple oversight in the construction of that clause.

It is entirely possible that the court, appellate court, and even the Supreme Court might arrive at an unreasonable conclusion and direct that Congress must clarify the intent of the law, though. (As lawyers, they are extensively trained in the art of straining at gnats.) They pulled this with the Lanham Act as I recall. It would be a very odd result, though, with only residents of selected states eligible for subsidies. This might result in residents of other states pushing for a change to the law, or failing that, for their state to start it's own exchange.
I live in one of the states that refuses to have an exchange, so I almost fainted this morning when I read that the subsidies may not be offered in those 34 states. DH and I have too much income too qualify for a subsidy, but this is not the case with most people. Without subsidies, most people will have to pay a lot for their insurance and most simply will refuse to buy it---and the system will really collapse.

What you said, MP, makes sense----but I went into a state of panic this morning since DH has pre-existing conditions that make him ineligible for health insurance and the Cobra conversion policy that allowed us to early retire is ending January 1st. So---we bought a Humana policy outside of the exchange since we weren't going to get a subsidy---so that we could lock it in and be good to go on January 1st. Even without the subsidy, we will still be saving $500 between the two of us.

So keeping fingers crossed...
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Old 10-25-2013, 07:31 PM   #9
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A bunch of people in Oklahoma filed a similar suit last year but it is still stuck in the court process. What is different here is the judge decided to accelerate the process to get to a decision in early 2014.
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Old 10-25-2013, 07:59 PM   #10
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Quote:
Originally Posted by M Paquette View Post
I wouldn't worry about this very much. The case revolves around a scriviners error, where one clause of the law refers to state exchanges regarding the subsidy plan, and the context makes it clear that the subsidy calculation and payments are intended to apply to all policies purchased through all exchanges. A reasonable person would draw the conclusion that this was a simple oversight in the construction of that clause.
I don't think they have valid arguments and are taking bits out of context.

Section 1311 says IN GENERAL.— Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘‘Exchange’’) for the State that, so by not establishing an exchange those states are already in violation of a Federal law which should have its own consequences.

Section 1321 gives the feds ( HHS ) authority to do what is necessary in those states that do not meet the requirements the Secretary shall (directly or through agreement with a notforprofit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.

In section 1401 there is an "or" in the section being referenced as being only for state exchanges

(2) PREMIUM ASSISTANCE AMOUNT.—The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—
‘‘(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or
‘‘(B) the excess (if any) of—
‘‘(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over
‘‘(ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year.
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Old 10-25-2013, 09:30 PM   #11
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I don't believe this falls under the scriveners error. There was no clerical error, this was read verbatim on several levels and passed as is by legislators. Ohio had legislation passed in such a manner - the word 'motor' was left out of DUI laws, so the term 'vehicle' was used instead of 'motor vehicle'. Since the same wording was used as it passed through all it's stages, it became illegal to ride a bicycle while intoxicated. The convictions on such cases were appealed, but always upheld.

Interesting to see the result. Should it be necessary to go back to Congress to alter the wording, I think the required change would not occur.
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Old 10-25-2013, 09:41 PM   #12
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I believe the intent was to "encourage" the states to establish their own exchanges. Once the IRS ruled that the subsidies could go to those who bought through the Federally-established exchanges, the pressure for them to establish exchanges decreased.
I think the case has merit, but I doubt the courts will rule in this way after what they've done to this point regarding this law.
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Old 10-25-2013, 10:28 PM   #13
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I am not a legal person, but can you say that the federal program are state exchanges run by the feds

IOW, there is a Texas exchange.... you have to live in Texas to get the insurance policies offered.... just because the Feds are running the exchange does not mean it is not a Texas exchange.....

Might not hold up in a court.... but it is what I would argue...
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Old 10-25-2013, 10:30 PM   #14
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I wouldn't worry too much about this. No need to worry about precedents, intent, or any legal nuances here.

1) Law is pretty much what the judges say it is and anyone who thinks a word written down can unambiguously mean only one thing needs to explain why we need nine supreme court justices. More importantly why we have anything other than 9-0 decisions except for typos.

2) This case has to go all the way to the Supreme court.


If this is decided for the plaintiffs, this would be as big as reinstating segregation after it has been lifted.

With the President being there for another 3 years, the composition of the court can only improve towards keeping the ACA.

Given all the above, it has to be a 5-4 decision at the worst case with the same cast that decided the legality of the individual mandate. Cannot imagine the chief justice would undo himself in such a short time span.
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