Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges

Remember my post, “The Great and Powerful ACA: Are High, Inflated Premiums Hiding Behind the Curtain?” I warned of the possible consequences of Halbig v. Burwell…and it happened.

Halbig v. Burwell was decided earlier today.

The Halbig court held that the Internal Revenue Service (IRS) went too far in extending subsidies to those who buy insurance through the federally run, Healthcare.gov website.

The Halbig court ruled that the subsection of the ACA that allows high insurance premium tax credits, according to the plain language of the statute, only applies to those individuals enrolled “through an exchange established by the state.” (emphasis added). Therefore, if Halbig is upheld on en banc review by the D. C. Circuit (see below) or on appeal to the U. S. Supreme Court, residents who reside in two-thirds (or 36) of the states that did not establish state-run health care exchanges (including NC), will not benefit from the health care subsidies.

Looking at the decision through a purely objective, legal lens, I believe the federal court of appeals is correct in its ruling. I also agree that the ruling will have drastic and devastating consequences for the ACA and the people who would have benefited from the health care subsidies.

However, the law governing statutory construction and interpretation is clear. Statutory interpretation is the process by which courts interpret legislation.

For years, the U.S. Supreme Court has been explicit on statutory interpretation. “We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Consumer Product Safety Commission et al. v. GTE Sylvania, Inc. et al., 447 U.S. 102 (1980).

In other words, if the words of a statute are unambiguous, then the statutory interpretation ends. The clear words of the statute must be followed.

Let me give an example of ambiguous language:

A magazine printed the following: “Rachel Ray enjoys cooking her family and her dogs.” If that were true, Rachel Ray’s family and dogs would be very upset. I am sure what the editor meant to write was “Rachel Ray enjoys cooking, her family, and her dogs.”

It is amazing how important a comma is.

The Halbig court held that the section of the ACA allowing health care subsidies only apply to those enrolled in an exchange established by the state is not ambivalent. Thus, according to statutory interpretation rules, the judicial inquiry ends.

So what happens now?

A request for an en banc ruling by the D. C. Circuit is the next step for Department of Justice. An en banc ruling is a decision made by all the justices, or the entire bench, of an appeals court, instead of a panel selected by the bench. In this case, three federal judges sat on the panel and the case was decided 2-1. An appeals court can only overrule a decision made by one of its panels if the court is sitting en banc.

Looking beyond any en banc ruling, the case could, potentially, be heard by the U.S. Supreme Court, especially in light of the importance of the decision and the fact that a 4th Circuit Court of Appeals ruled the opposite way literally hours after Halbig was announced. See David King, et al. v. Burwell, et al.

The Fourth Circuit found the ACA ambiguous, and it states, “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion. We thus affirm the judgment of the district court.”

Bizarre that two courts hold opposing positions on the same issue and publish both decisions on the same day.  It reminds of the old Sam the Sheepdog cartoon, “Duh! Which way did he go? Which way did he go, George?”

Finally, in closing, and on a personal note, I would like to dedicate this blog to my lab-doberman mix, Booker T, who, sadly, passed Sunday.  He was my best friend for over 14 years.  You will be greatly missed, Booker T.  Rest in peace.

Booker T

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on July 22, 2014, in Affordable Care Act, Federal Government, Federal Law, Final Rulings, Health Exchanges, Healthcare.gov, IRS, Lawsuit, Legal Analysis, Legislation, Medicaid, Medicaid Attorney, Medicaid Providers, Medicaid Recipients, Medicaid Services, Medicaid Spending, Medicare, Medicare Attorney, NC, North Carolina, Sec. Kathleen Sebelius, Sec. Sylvia Burwell, Secretary of Health and Human Services, Tax Dollars, Taxes, US Supreme Court, Washington D.C., Wos and tagged , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 9 Comments.

  1. “Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidiaries in State-Run Exchanges”

    Knicole,

    “Subsidiaries” should be “”Subsidies”. “State-Run Exchanges” should be “Federally-Run Exchanges”.

    Other than that, Mrs. Lincoln, how was the play? 😉

    Ed

  2. Thanks, Ed!!!! Much obliged!

  3. Don B., Director of Operations, TPFC

    Knicole….
    I always truly appreciate your wisdom infused with humor in your blogs! I tend to share your posts regularly with colleagues. On a more personal note, I’m very sorry to hear of the passing of Booker T — dogs are amazing animals that provide unlimited loyalty and love. I’m sure he’s having a blast running with his buddies in doggie heaven and looking down on you and your family with a great doggie smile.

  4. I just read the King v. Burwell ruling. The intellectual gymnastics required to reach that conclusion are rather amazing. I wonder if they’ve considered Olympic competition.

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