The question in this case is whether the IRS interpretation of the statute is reasonable, and not whether it is the *only *reasonable interpretation or even whether it is the *correct *interpretation.
The anti-Obamacare challengers argue that the exchange must be “established by the State” and urge the courts to examine that language in a vacuum. But that’s not generally how statutory interpretation proceeds, much less statutory interpretation in which the question is which interpretations are reasonable rather than which is correct.
In short, the question is whether one reasonable reading of the language of the statute as a whole is that it provides subsidies for federal-run exchanges. The only serious argument to the contrary is the undefined verb “established by the State,” but when you put that up against all the other language that talks about the feds essentially replacing the state in every way if the states fails its obligations, and there being no very good reason for not offering the subsidies in 1311 exchanges established by the feds, I think the Administration is not too concerned.
That said, I think if this manages to persuade 5 Justices, the Clinton Administration will probably just let the red states sweat. Maybe they will be forced to set up exchanges, or at least those states might elect Democrats to fix the law. Sure, it could mess up the whole system if the federal exchanges don’t get subsidies, but they might just let it right for a couple of years first.
I am not a USSC scholar, so I will happily retract if one comes along.
I believe in general they look at the intent of the law. I seem to recall several ruling that mere spelling or grammatical errors are not enough to strike down a law, and obvious oversights are taken as just that.
For many matters, congress just passes a quick amendment, and everyone goes for drink afterward. For this one, I have a feeling the Court will rule that the exchanges can have their subsidies whether they are run by the state or not. Especially in light of 1321.
Of course, if they rule the other way, it seems that a bunch of red-leaning states will have some very angry citizens. But I can’t see any way it causes the whole law to be struck down.
This thread reminds me of those “Free Man On The Land” people who assume they can walk into a court somewhere and dismiss large portions of the government by reciting the correct legal incantation with sufficient fervor.
“Aha, but you cannot give me a speeding ticket because the following provisions from the Treaty of Fort Laramie of 1850 clearly state that…”
I think that’s overstating it. This isn’t a crazy legal argument at all. I’m not sure I’d call it likely to succeed for both legal and political reasons, but it isn’t crazy.
Sure. But I guess I don’t understand what the OP is hoping will happen. Suppose the subsidies are found, by the actual language of the law, to be restricted only to state-run exchanges.
What happens next? We scrap Obamacare? We keep Obamacare, but only for states that have established exchanges, and citizens of states without them can fuck off? Or we pass a unanimous amendment to the bill that fixes the wording, it gets signed and becomes law before these challenges get very far?
Given that most of the states without exchanges are red states, how would denying subsidies to red staters help Tea Party/defund Obamacare types? Hey, if the problem is that it will cost to much, then this is a perfect way to cut costs–just don’t let Republicans get the benefits.
I don’t see what incentive Democrats have to scrap all of Obamacare just because it only benefits blue staters.
Here’s the thing. If Republicans want to compile a list of all the problems of the ACA and a list of changes to fix those problems, lots of those things could be implemented.
Except the only list the Republicans can seem to come up with is: Everything. Since root and branch repeal of the ACA isn’t possible unless the Republicans can get a veto-proof majority in the Senate, and that’s not going to happen any time soon, then the ACA continues as written.
No sense in fixing the problems, since fixing the problems will make it work better, which is worse, because without the problems no one will want to repeal it.
Even if the suit succeeds, all it will mean is that health insurance is really expensive for people in red states. I really don’t understand what the endgame is here.
Its quite simple, really, it lifts a page out of Lenin’s handbook: provoking the Czar’s regime to increase the misery of the people hastens the day of Revolution, therefore, it is a good thing.
Only blue states will have the full efficiency of ObamaCare. You live in OK, your brother in law lives in Minnesota. You compare notes on heath coverage, and you discover, to your dismay, that living in Redstate kinda stinks. You, and others like you, become enraged and demand that your Republican governor and legislature bend to your will. They refuse, you vote them out, and America is blue on blue on blue, sea to shining sea.
The Social Democrat regime falls on the shoulders of the people, and they groan under tyranny, until they take up 2nd Amendment solutions and rise, sending all the Democrats to the Wall and inaugurating Ted Cruz as Maximum Leader, and America at last becomes the Shining Citadel on the Hill.
Seems to me that the states with exchanges (and the insurance companies) would do just fine - just like they have been doing in Massachusetts for the last few years.
Residents of the states without subsidies would probably see an ‘insurance death spiral’ and some interesting political fallout.
… and of course, Vermont will continue their push for single-payer, showing all of us the way of the future.
Meh, if the courts are not satisfied with the clarity of the drafting of the statute, they have the power to read in what is necessary to make the statute work.
Yes and no. They can’t read in provisions which are inconsistent with the legislative intent. There may be some evidence that Congress did not intend for the subsidies to apply to obstructionist states.
I don’t understand why you are asking this question. The OP asked a fairly straightforward “what would happen if” question. Many posters denigrated the possibility of the “if” part of that question. A few posters attempted to provide likely scenarios if the doubtful event actually did happen.
Is it because this is in GD instead of GQ, so you get to question the motives of the OP?
It does seem to be more of a GQ sort of OP to me. Asked and now pretty much answered.
Roddy
That is the correct legal standard. It’s called Chevron deference after Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Basically, Chevron deference is the principle that courts should defer to an agency’s reasonable interpretation of a statute when the statute requires the agency to implement it. So the IRS gets deference on interpreting the tax credit provisions, and the DHHS gets deference on interpreting the section requiring it to set up exchanges in nonparticipating states. Deeper analysis is [here](http:// healthaffairs. org/blog/ 2012 /08/01 /the- illegal -irs-rule- to-expand -tax-credits -under -the-ppaca
-a-response-to-timothy-jost) (the limits of Chevron deference have become a bit murky recently.)
In this case, there is some conflicting evidence:
(1) the CBO scored the ACA under the assumption that subsidies would be available in all states; this seems to be a thin proposition at best, because the CBO could not have known which states would ultimately establish exchanges.
(2) Max Baucus specifically indicated that the bill only provided tax credits in states which established their own exchanges, which was intended as an incentive for them to do so (I was quite serious in post #50, Muffin :)). Again, a thin proposition, since the bill was marked up a dozen times after that committee hearing, and as far as I can tell the language in question came from the House version of the bill anyway.
(3) As Richard Parker notes, the statute does not include a separate section laying out the definitions and requirements for federally established exchanges, so all exchanges are §1311 exchanges.
So, the IRS is probably free to pick its own reasonable interpretation because the statute and its legislative history are ambiguous and it is specifically charged with implementing that section.
One of the lawsuits (the Oklahoma one) also suffers from a standing problem - the state itself is the one bringing the challenge. The state almost certainly has no standing to challenge the IRS interpretation because (1) the state itself has not suffered injury, and won’t, and (2) the state could have avoided this issue by creating an exchange anyway.
The lawsuit has a chance of success if and only if it is heard in a courtroom where the flag has gold fringe on the bottom. Or if Ohio was not technically a state when the judge was born. Or if the plaintiff points out that currency is not backed by gold and is plainly not legal tender…
So, if I understand that standard correctly, for the plaintiffs to win, they’d have to demonstrate that a) the IRS interpretation is not reasonable, and b) that the intent of Congress was unambiguously to limit the subsidy to states that established their own exchanges, rather than ones where HHS established an exchange. Is that correct?
[QUOTE=Really Not All That Bright]
One of the lawsuits (the Oklahoma one) also suffers from a standing problem - the state itself is the one bringing the challenge. The state almost certainly has no standing to challenge the IRS interpretation because (1) the state itself has not suffered injury, and won’t, and (2) the state could have avoided this issue by creating an exchange anyway.
[/QUOTE]
Yes, that’s correct. We can go a little further, though: for such a victory to benefit the plaintiffs, they’d then have to show that Congress’ refusal to provide subsidies for nonparticipating state residents is a denial of substantive due process. That might be a slightly easier sell, assuming they can reach it.
