Oba­macare sup­port­ers ner­vous about le­gal test of sub­si­dies

Modern Healthcare - - NEWS - By Joe Carl­son

If the Obama ad­min­is­tra­tion loses a high-pro­file ap­pel­late court bat­tle over the in­sur­ance pre­mium sub­si­dies in the Pa­tient Pro­tec­tion and Af­ford­able Care Act, it still will have two more chances to make its case for of­fer­ing the sub­si­dies through Health­Care.gov. But both sup­port­ers and crit­ics of the law agree that if the ad­min­is­tra­tion loses the case, it will be a dev­as­tat­ing blow to ef­forts to ex­pand cov­er­age un­der the law.

An ad­verse court de­ci­sion would mean the can­cel­la­tion of sub­si­dies for mil­lions of Amer­i­cans in the 36 states be­ing served by the federal ex­change. That al­most cer­tainly would cre­ate mas­sive con­fu­sion and cov­er­age dis­rup­tion. The only two lower federal courts that have handed down de­ci­sions so far sided with the ad­min­is­tra­tion.

But dur­ing oral ar­gu­ments last week be­fore the U.S. Court of Ap­peals for the District of Columbia Cir­cuit, two judges on a three-mem­ber panel ex­pressed strong skep­ti­cism about the ad­min­is­tra­tion’s ar­gu­ments.

In Hal­big v. Se­be­lius, the ap­pel­late court heard from lawyers for seven pri­vate cit­i­zens and businesses who said the In­ter­nal Rev­enue Ser­vice last year il­le­gally in­ter­preted the law’s lan­guage to al­low federal sub­si­dies for any Amer­i­can in any state who meets in­come cri­te­ria.

The le­gal ques­tion cen­ters on the pre­cise word­ing in the sec­tion of the law that de­scribes el­i­gi­bil­ity for the sub­si­dies. It says sub­si­dies to pur­chase in­sur­ance through an ex­change will be pro­vided to in­di­vid­u­als and fam­i­lies who got in­sur­ance “through an ex­change es­tab­lished by the state.” The IRS is­sued a rule in­ter­pret­ing that to in­clude the federal in­sur­ance ex­change, not just the state-run ex­changes. The ad­min­is­tra­tion ar­gues that the law’s lan­guage was sim­ply a draft­ing er­ror and that con­gres­sional Democrats who wrote and passed the law fully in­tended for el­i­gi­ble people in ev­ery state to re­ceive the sub­si­dies to ex­pand cov­er­age.

How­ever, on March 25, two ap­pel­late judges, A. Ray­mond Ran­dolph and Thomas B. Grif­fith, “ap­peared to agree” with the lawyer ar­gu­ing to end the sub­si­dies, ac­cord­ing to an Amer­i­can Hospi­tal As­so­ci­a­tion bul­letin on the case. Ran­dolph and Grif­fith were ap­pointed by Repub­li­can pres­i­dents.

“There doesn’t seem to be any clear leg­isla­tive his­tory here,” Grif­fith said dur­ing the ar­gu­ments. “If (Congress) didn’t leg­is­late clearly enough, is it our job to fix the prob­lem?”

Their tone dur­ing the ar­gu­ments stood in con­trast to that of Judge Harry

An the ad­verse courts de­ci­sion would mean by the can­cel­la­tion of sub­si­dies for mil­lions of Amer­i­cans in the 36 states be­ing served by the federal ex­change.

T. Ed­wards, a Demo­cratic ap­pointee. Ed­wards scoffed at the plain­tiffs’ ar­gu­ment that Congress in­tended to make sub­si­dies avail­able only through staterun ex­changes to prod states to set up their own ex­changes, rather than re­ly­ing on the federal govern­ment to op­er­ate the ex­change.

“When I read that ar­gu­ment, to be very hon­est with you so you know what my con­cerns are, it seems pre­pos­ter­ous,” Ed­wards told plain­tiffs’ at­tor­ney Michael Carvin. “No one as­sumed that if you choose not to cre­ate the ex­change, you’ll ef­fec­tively gut the statute.”

If the ad­min­is­tra­tion loses the case, it may re­quest a hear­ing be­fore the full ap­pel­late court or ap­peal di­rectly to the Supreme Court. But whether the Supreme Court would take the case could de­pend on how other courts rule. In to­tal, four cases are pend­ing on this is­sue. The 4th U.S. Cir­cuit Court of Ap­peals is sched­uled to hear oral ar­gu­ments May 15 in the case King v. Se­be­lius, in which Carvin will make the same case he made to the D.C. Cir­cuit. A federal district judge pre­vi­ously had ruled in the ad­min­is­tra­tion’s fa­vor.

Typ­i­cally, the Supreme Court ac­cepts cases when cir­cuit courts split on an is­sue. So if the D.C. and 4th Cir­cuits reach the same de­ci­sion, that could re­duce the chances that the jus­tices will take the case.

U.S. District Court Judge Paul Fried­man is­sued a lengthy opin­ion in Jan­uary stat­ing that the plain lan­guage of the law, “viewed in isolation,” ap­pears to sup­port the plain­tiffs’ in­ter­pre­ta­tion.

But, he con­tin­ued, “the court finds that the plain text of the statute, the statu­tory struc­ture and the statu­tory pur­pose make clear that Congress in­tended to make pre­mium tax cred­its avail­able on both state-run and fed­er­ally fa­cil­i­tated ex­changes.”

The lawyer for the con­ser­va­tive Com­pet­i­tive En­ter­prise In­sti­tute, which is fund­ing most of the le­gal costs in both cases, said the Supreme Court may grant a hear­ing on the is­sue re­gard­less of lower court rul­ings.

“A lot de­pends on how the rul­ings come out, when they come out, and who they fa­vor,” at­tor­ney Sam Kaz­man said. “Frankly, I think it is a ma­jor enough is­sue that there is a good like­li­hood that it will go there even if there is no split.”

Be­fore ap­pel­late courts can over­turn the word­ing of the re­form law, they will have to con­clude that the statute con­tains some level of am­bi­gu­ity about what was in­tended, said health­care at­tor­ney El­iz­a­beth Mills of Chicago law firm Proskauer Rose.

The judges also may con­sider whether par­ti­san con­gres­sional grid­lock pre­vented law­mak­ers from go­ing back and mak­ing tech­ni­cal cor­rec­tions to the law, which has long been com­mon with ma­jor con­gres­sional leg­is­la­tion.

It likely will be sev­eral months be­fore the ap­pel­late courts is­sue their de­ci­sions in Hal­big and King.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.