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Obama’s Executive Order, Its Impact on Health Care Costs, and the Constitutionality of Executive Orders

Pres. Barack Obama will address the nation tonight at 8 pm (Thursday, November, 20, 2014). He is expected to discuss his executive order that will delay deportations of up to 5 million migrants.

What does an executive order on immigration have to do with Medicaid? Well, you can bank on the fact that almost none of the 5 million people has private health care coverage….which means, there is a high likelihood that most, if not all, the people would qualify for Medicaid.

With the expansion of Medicaid in many states, adding another 5 million people to the Medicaid program would be drastic.  Think about it…in NC, approximately 1.8 million people rely on Medicaid as their insurance.  5 million additional Medicaid recipients would be like adding 3 more North Carolinas to the country.

So I looked into it…

The Kaiser Family Foundation website states that even immigrants who have been in America over 5 years are sometimes still barred from getting Medicaid and those people would remain uninsured.  The Kaiser website states that under current law “some lawfully present immigrants who are authorized to work in the United States cannot enroll in Medicaid, even if they have been in the country for five or more years.”

By law, only immigrants who have green cards are entitled to enroll in Medicaid or purchase subsidized health care coverage through the ACA. Usually those immigrants with green cards are on the course to become citizens.

Regardless of whether Obama’s executive order tonight will or will not allow the 5 million people Medicaid coverage (which it will not), the executive order absolutely will greatly increase health care costs

The truth is that, with or without Obama’s executive order, the government already funds some health care for undocumented immigrants. We have an “emergency Medicaid” program and it pays hospitals to provide emergency and maternity care to immigrants if: 1) he or she otherwise would be Medicaid eligible if they weren’t in the country illegally or 2) he or she are legally present in this country for less than 5 years.  (Which is the reason that ER wait times are so long…if you have no health insurance and you get sick, the ER is precisely where you go).

However, with the additional 5 million people living within the borders of USA, it is without question that the “emergency Medicaid” funds will sharply escalate as hospitals provide more emergency care. ER waits times will, inevitably, increase. Health care costs, in general, surge as the population increases.  And the addition of 5 million folks in America is not a “natural” increase in population.  It will be like we added additional states.  Overnight and with the stroke of a pen, our population will grow immensely.  I guess we will see whether we get “growing pains.”

An act of Congress will still be required before the undocumented immigrants impacted by the executive order would be allowed to participate in the Medicaid programs and the Children’s Health Insurance Program (CHIP) coverage.

As to the Constitutionality of executive orders…

Executive orders are not specifically mentioned in the Constitution.  Many people interpret the nonexistence of executive orders in the Constitution as barring executive orders.

Article I Section I of the Constitution clearly states that all legislative powers reside in Congress. However, an executive order is not legislation. Technically, an executive order is a policy or procedure issued by the President that is a regulation that applies only to employees of the executive branch of government.

Nonetheless, our country has a vast history of president’s issuing executive orders. Abraham Lincoln issued an executive order to engage military in the Civil War, Woodrow Wilson issued an executive order arming the military before we entered World War I, and Franklin Roosevelt approved Japanese internment camps during World War II with an executive order.

Regardless of your political affiliation, in my opinion, it is very interesting that Obama would initiate an executive order regarding immigration given his past statements over the years complaining about past presidents’ executive orders being unconstitutional.

In 2008 campaign speeches, Obama regularly emphasized the importance of civil liberties and the sanctity of the Constitution.

In fact, in speeches, Obama stated, “most of the problems that we have had in civil liberties were not done through the Patriot Act, they were done through executive order by George W. Bush. And that’s why the first thing I will do when I am president is to call in my attorney general and have he or she review every executive order to determine which of those have undermined civil liberties, which are unconstitutional, and I will reverse them with the stroke of a pen.”

Whether or not people believe that executive orders are constitutional, it is indisputable that presidents on both sides of the aisle have issued executive orders.

Reagan and Bush issued executive orders. Although there is an argument that those executive orders came on the heels of congressional bills, as adjustments. Neither Reagan nor Bush simply circumvented Congress.

Going back to tonight’s anticipated executive order allowing 5 million migrants to remain in America…

While the executive order will not allow the 5 million people immediate access to Medicaid and other subsidized health care, it will allow 5 million more uninsured people to exist in America, which will, undoubtedly, increase health care costs and ER visits. And, eventually, the additional 5 million people will be eligible for Medicaid, subsidized health care, and all other benefits of living in America.

Supreme Court Will Decide Whether Citizens in NC and 26 Other States Can Receive Tax Credits for Health Care Premiums!!

With a decision that, I can only imagine, ricocheted against the White House walls, the Supreme Court granted certiorari to hear King v. Burwell this past Friday, November 7, 2014, despite Obama’s administration’s request for the Supreme Court to postpone granting certiorari in order to wait for a D.C. circuit to re-visit an opinion, the Halbig ruling.

The Supreme Court’s decision in King could, potentially, have devastating consequences on the Affordable Care Act (ACA). However, I write that last sentence with an asterisk. Journalists across the country are entitling articles, “Obamacare Is Doomed! Everybody Panic!”, “The Supreme Court Might Gut Obamacare. Your State Could Save It,” and “Obamacare vs. Supreme Court.” These titles to articles are misleading, at best, and factually incorrect, at worst. King v. Burwell is actually not an attack on the ACA. But I will explain later…

First of all, what the heck is certiorari…or “cert”, as many attorneys call it?

A writ of certiorari is actually an order from a higher court to a lower court demanding a record in a case so that the higher court may review the lower court’s decision. A writ of certiorari is the instrument most used by the Supreme Court to review cases. The Supreme Court hears such a small, minute fraction of lawsuits that when the Supreme Court “grants cert,” it is a big deal.

I have written in the past about these same two appellate court cases, which were both published July 22, 2014, within hours of one another, regarding the Health Care Premium Subsidies Section of the Affordable Care Act. These two cases yield polar opposite holdings. In Halbig v. Burwell, the D.C. Circuit Court found that the clear language of the ACA only allows the health care premium subsidies in states that created their own state-run health care exchanges, i.e, residents in NC along with 35 other states would not be eligible for the subsidies. See my blog: Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges.

Juxtapose the 4th Circuit Court’s decision in King v. Burwell, which held that “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.”

So the two cases came to two entirely different conclusions. Halbig: ACA is clear; King: ACA is ambiguous.

Well, for everyone else, that is as clear….as mud.

When the D.C. court decided Halbig, it was not an en banc decision. In English, this means that the entire bench of judges in the D. C. Circuit did not hear the case, only a panel of three (which is the usual way for a case to be heard on appeal to a federal circuit). The Obama administration, along with other proponents of the ACA, hoped that the U.S. Supreme Court would deny cert to King until the D.C. court could re-visit its decision, this time en banc.

Yet, this past Friday, the Supreme Court opted to consider King v. Burwell.

The sole issue to be decided is: Whether the Internal Revenue Service may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through exchanges established by the federal government under Section 1321 of the Patient Protection and Affordable Care Act.

How is King v. Burwell NOT an attack on the ACA?

The plaintiffs in King are not asking the Supreme Court to strike down the ACA, even, in part. They are asking the Court to uphold the plain language of the ACA by holding that the IRS’s interpretation of the ACA is erroneous. Let me explain…

Section 1311 directs states to establish exchanges, and Section 1321 directs the federal government to establish exchanges “within” any state that opts to not set up its own state-run exchange, e.g., NC.

Section 1401 authorizes subsidies for people whose household income falls between 100 and 400% of the federal poverty level, who are not eligible for qualified employer coverage or other government programs, and who enroll in coverage “through an Exchange established by the State.” (emphasis added). These 3 criteria are crystal clear based on the plain language of the statute.

The statute makes no provision for subsidies in states that opt not to create their own exchange but, instead, allow the federal government to create an exchange within its state.

The ACA was intended to create penalties if the states do not establish their own exchanges. For example, the subsidies are not allowed to citizens of states without state-created exchanges.

In August 2011, the IRS issued a proposed rule [add link] announcing it would provide tax credits (and implement the resulting penalties) in states with federal exchanges, too. IRS officials later admitted to Congress that they knew the statute did not authorize them to issue tax credits through federal exchanges…Oops…

The proposed rule received much negative feedback based on the fact that the IRS appeared to have no statutory basis for the rule. Nonetheless, the proposed rule was finalized in May 2012, and lawsuits ensued…

Oklahoma began the litigation with Pruitt v. Burwell in September 2012. In September 2014, a federal district court held that the plain language of the ACA does not allow subsidies in states with federally-run exchanges. In May 2013, Halbig v. Burwell was filed, and in September 2013, King v. Burwell was filed.

So, much to the contrary of popular belief, these lawsuits are not “against the ACA” or “proving the unconstitutionality of the ACA.” Instead, these lawsuits are “against” the IRS interpreting the ACA to allow tax credits for all states, even if the state has a federally-run exchange.

Will it negatively impact the ACA if the plaintiffs win? That would be a resounding yes.

Oral argument could be as soon as March 2015.