Thursday, October 08, 2015

Is The Impossible Possible-A Coalition Government In The House?

Kevin McCarthy, the person expected to succeed John Boehner as Speaker, has pulled out of the race. This opens the possibility that something may happen that has never happened before in the House of Representatives: the election of a Speaker who achieved a majority by getting support from both parties.

No one would suggest that this would constitute a real coalition government of the type seen in parliamentary democracies. But it could be a pseudo-coalition, one in which the remaining Republican moderates in the House together with most or all of the Democrats vote together to elect a Speaker and as a condition for Democratic support, agreed to hold votes on certain critical legislative measures.

No one is saying it's likely, in fact it is highly unlikely, if for no other reason than it is never happened. Also, for Republicans to make such an arrangement, they would be conceding that they are unable to govern by themselves, which would have significant impact in future elections. It could also lead to the unraveling of the current Republican Party.

Nonetheless, it is at least conceivable if only because it may be the only thing that keeps our government from imploding.

The self-described "Freedom" caucus in the House of Representatives has said that they will not vote for any member to be Speaker unless it is one of their members. The 435 member House has 247 Republicans of which 40 are members of the Freedom Caucus. The House also has two other right wing Republican caucuses, the Tea Party Caucus and the Liberty Caucus, many of whose members overlap with the freedom Caucus. There is no firm count on how many members can be considered moderate. But these other two caucuses have not made the same demand as the Freedom Caucus.

If all of the members of the Freedom Caucus continue with the position they have announced, it will be impossible for a Republican to get the 218 votes necessary to be the next speaker unless that Republican has support from Democratic members. If no person gets 218 votes there is no speaker elected. Under House rules, the current speaker remains in office until his successor is elected. Of course, it is possible for the current speaker to resign.

In the next days things may change. The freedom Caucus and the rest of the radical Republicans may decide that they will support a moderate member. Or the moderate members may decide that they will support a member of the Freedom Caucus. But at this point neither outcome seems possible. While you don't hear much about it, the more moderate members have serious disdain for the freedom Caucus members for what they are doing the Republican Party. And though it may come as a surprise to some Democrats, there are Republican members who do believe in governing. One example is Charlie Dent R(PA) who said that Republican Rejectionist "fragged" McCarthy as they had Boehner. He went on to say

"The challenge for our conference is quite simple. That we need to assemble bipartisan coalitions to pass any important legislation around here, . . . Whoever's going to be the next speaker should not appease this group of rejectionists who have no interest in governing."


We may disagree with them on most issues but they do not have the same death wish for government that the radicals in the Republican Party have expressed.

Time will tell. But there is a lot at stake. Within the next few weeks we have to pass legislation funding the government for fiscal year 2016, which starts on October 1. In addition, soon thereafter legislation needs to be passed raising the debt ceiling. There is also a critical need to pass infrastructure legislation that will include new revenue. On immigration reform, it is too late for the House to pick up and pass the bipartisan Senate bill which passed last year since that occurred in the last Congress. However it would be possible, though it would be highly unlikely, for the House to introduce and pass the same bill that passed the Senate and send it to the Senate for final approval.

Kevin McCarthy's withdrawal from the speakership race is frightening because of the possibility of total legislative gridlock, even worse than what we have seen heretofore. But maybe, just maybe, it presents an opportunity.

Tuesday, June 02, 2015

Correct Outcome In Headscarf Case (EEOC v Abercrombie & Fitch) May Be Bad News For ACA Case (King V Burwell)

The Supreme Court decision in the headscarf case yesterday, EEOC v Abercrombie & Fitch, was a legally correct and very good outcome. The court held that an applicant alleging employment discrimination based on the religion need show only that his need for an accommodation was a motivating factor in the employer’s decision not to hire him, not that the employer had knowledge of his need. (As an aside it seems pretty clear that in this case the employer in fact did have knowledge of the applicants need, but that is a separate question.)

But there is language in it which may suggest a really bad outcome in the pending Affordable Care Act case, King v Burwell.

EEOC v Abercrombie & Fitch, was a straightforward case involving an interpretation of title VII of the Civil Rights Act of 1964. In an 8-1 opinion written by Justice Scalia the Court strictly interpreted the statute to hold that an employee did not have to show that an employer knew that the employee required a religious, accommodation. Rather, a case could be made simply if the employer's unwillingness to provide an accommodation for an employee's religious practice was a motivating factor in the employer's decision.

That ruling is totally consistent with the specific language and the spirit and intent of the law. However, in his opinion, Scalia inserted some language which strongly signals how he will rule in King v Burwell and may signal how other justices will rule. Scalia's opinion says,

Abercrombie urges this Court to adopt the Tenth Circuit’s rule “allocat[ing] the burden of raising a religious conflict.” Brief for Respondent 46. This would require the employer to have actual knowledge of a conflict between an applicant’s religious practice and a work rule. The problem with this approach is the one that inheres in most incorrect interpretations of statutes: It asks us to add words to the law to produce what is thought to be a desir- able result. That is Congress’s province. We construe Title VII’s silence as exactly that: silence.

That language sounds tailor-made for the pending challenge to the ACA in King the Burwell.

To refresh people's memory, King v Burwell also involves a question of statutory interpretation. As explained in this article,
The challengers sole argument is that one section of the law that refers to subsidies says that they are available on "an Exchange established by a State" and that these were established by the Federal Government not by States. The DOJ points out the same law imposes a mandatory requirement for each to set up an exchange, but provides that for any state that elects not to establish an exchange that Federal Government must establish one in its stead, and that for all purpose of the law each of those Federally Facilitated Exchanges is "an exchange established by a State." Here is the summary from the Solicitor General's brief, which eviscerates the challengers' arguments.

The Act provides that each State “shall * * * establish an American Health Benefits Exchange.” 42 U.S.C. 18031(b)(1). But, in a provision expressly designed to respect the sovereign dignity of each State by affording “State flexibility,” 42 U.S.C. 18041, the Act provides two ways for that requirement to be satisfied. First, a State may elect to create the Exchange on its own. 42 U.S.C. 18041(b). Alternatively, if a State does not elect to establish the “required Exchange” itself, then HHS will “establish and operate such Exchange within the State.” 42 U.S.C. 18041(c)(1). Either choice satisfies Section 18031(b)(1)’s requirement that each State “shall * * * establish an [Exchange].” The text of the Act thus makes clear that an Exchange established by HHS in a State’s stead is, as a matter of law, “an Exchange established by the State.”

That interpretation harmonizes the Act’s text, structure, and purpose. Petitioners’ reading, in contrast, would transform the Act into a hash of superfluities, absurdities, and internal contradictions. It would obstruct the Act’s express purpose by denying affordable insurance to millions of Americans. It would thwart the operation of the Act’s interdependent reforms and gut the Exchanges through which those reforms are implemented. And it would destroy the Act’s model of cooperative federalism by trans- forming the Act’s promise of “State flexibility” into a threat that a State may forgo establishing an Exchange for itself only at the price of crippling its insurance market and depriving its citizens of the tax credits at the heart of the Act. The Act unambiguously forecloses that construction. At a minimum, the IRS’s interpretation is a permissible one meriting deference under Chevron.

While it is clear that these cases are entirely different that doesn't mean that those differences will affect Scalia. in the EEOC case, the court was only interpreting a single section of the law which stood by itself without reference to other sections of the law. In King v Burwell, the ACA case, there are many provisions of the law that are totally intertwined and interdependent. Moreover, the traditional rules of statutory interpretation require courts to interpret provisions in a way that is consistent with the overall intent of the law, which in the case of the ACA case requires that the law be upheld. That was not the situation in the EEOC case, which merely involved deciding the appropriate standard of proof in one section of the law.

However I continue to be optimistic about King v Burwell. I find it difficult to believe that Chief Justice Roberts will essentially invalidate the law on this second go-round, which requires him to accept a truly ludicrous theory of statutory construction when he has already cast the deciding vote to uphold the ACA earlier. Similarly I think that Anthony Kennedy will uphold the ACA because even he will ignore knowledge how truly ridiculous the plaintiffs claims are. Thus, with my rose-colored glasses firmly in place, I hope that it will be at least a 6 to 3 decision. But with this Court, anything can happen.

Tuesday, January 27, 2015

Did Netanyahu's Hatred Of Obama Finally Bring Senate Democrats To Their Senses

The Senate Democrats who were at the forefront of the effort that would effectively derail the Iranian nuclear negotiations have finally come to their senses. They sent a letter to the President, the text of which is below, promising not to vote on their bill until at least March 24, 2015. There is little doubt however that this face-saving date can be extended if significant progress is shown in the negotiations.

The President has been on record, most recently in the state of the Union address, opposing this sanctions bill. Even though it would not impose sanctions until June and only if negotiations failed he has made clear that passage of the legislation would effectively torpedo the ongoing negotiations.

“New sanctions passed by this Congress, at this moment in time, will all but guarantee that diplomacy fails  -- alienating America from its allies and ensuring that Iran starts up its nuclear program again, . . . . It doesn’t make sense. That is why I will veto any new sanctions bill that threatens to undo this progress.”

Of course, torpedoing the negotiations is the result that has been sought by many hawks, and is the main reason why Bibi Netanyahu is going to speak before a joint session of Congress.

It has been a mystery why so many Senate Democrats have been willing to go along with this neocon agenda. But until now they have. Yes, we all know that Senators like to preserve their prerogatives when it comes to foreign policy, which could explain some of it. We also know that there is significant skepticism as to whether or not the negotiations with the Iranians will succeed, though that same skepticism is shared by the president and all those who are negotiating this deal.

The President has appealed to these very Senators to pull back this legislation and made clear that if passed he would veto it. One has to wonder why it took till today for the Senators to finally relent. It is very possible that Netanyahu's upcoming speech may have been the trigger. There can be no doubt that Netanyahu's visit is a blatant effort by Republicans generally and the neocons in particular to embarrass the President. It is also clear that they truly do want to torpedo the negotiations. Lastly, Netanyahu appears incapable of passing up any opportunity to interfere with US domestic politics and express his dislike for our President.

Netanyahu's feelings for the President were summarized well in a recent op-ed by Richard Cohen in which he said

It would not surprise me if, at the next Republican National Convention, Benjamin Netanyahu took a seat in the delegates-from-abroad section. The Israeli leader has both allied and associated himself with congressional Republicans who differ with President Obama over whether to impose additional sanctions on Iran and who also — let’s not beat around the bush — hate his guts. Their foreign policy is actually a domestic one: to destroy the president.

Well, it is possible that his overreaching has backfired. In any event it is a good day for peace.



Dear Mr. President:

We remain hopeful that diplomacy will succeed in reversing Iran’s ability to develop a nuclear weapon capability, in accordance with the timeline that the P5+1 and Iran negotiating teams have set for themselves: March 24, 2015 for a political framework agreement and June 30, 2015 to conclude negotiations on the technical annexes of the comprehensive deal.

Congress has always been a partner in the shared goal of preventing Iran from developing a nuclear weapon capability. We remain appreciative of your leadership in seeking to protect the United States, and our allies and partners, from the threat of a nuclear Iran. For more than two decades, the executive and legislative branches of the U.S. Government have worked together in a bipartisan way to implement sanctions legislation that successfully ratcheted up pressure on Iran’s nuclear program. This pressure proved to be decisive in compelling Iranian leadership to enter the latest round of nuclear negotiations in September 2013.

We remain deeply skeptical that Iran is committed to making the concessions required to demonstrate to the world that its nuclear program is exclusively peaceful by March 24 – the deadline agreed upon for a political framework agreement. Considering Iran’s history in nuclear negotiations and after two extensions of the Joint Plan of Action, we are concerned that Iran is intentionally extending the negotiations to improve its leverage at the negotiating table.

We are Democratic supporters of the Iran Nuclear Weapon Free Act of 2015 – a bill that would impose sanctions on Iran only if Iran fails to reach a comprehensive agreement by the June 30 deadline. This bill also includes monthly waivers after June 30 to provide additional negotiating flexibility. We believe that this bill, as introduced, is reasonable and pragmatic, respects the nuclear negotiating timeline, and sends a strong signal to Iran and to the international community that endless negotiations under the interim agreement are dangerous, unacceptable, and could leave Iran with a threshold nuclear weapon capability.

In acknowledgement of your concern regarding congressional action on legislation at this moment, we will not vote for this legislation on the Senate floor before March 24. After March 24, we will only vote for this legislation on the Senate floor if Iran fails to reach agreement on a political framework that addresses all parameters of a comprehensive agreement. This deadline is the critical test of Iranian intentions. We expect that your Administration will consult closely with Members of Congress in the coming months, and look forward to working with you to achieve our shared goal of reversing Iran’s ability to develop a nuclear weapon capability.

Sincerely,

Robert Menendez
United States Senator

Charles E. Schumer
United States Senator

Richard Blumenthal
United States Senator

Gary C. Peters
United States Senator

Robert P. Casey, Jr.
United States Senator

Benjamin L. Cardin
United States Senator

Christopher A. Coons
United States Senator

Joe Manchin III
United States Senator

Joe Donnelly
United States Senator

Debbie Stabenow
United States Senator


Many Democratic Members of Congress, both Senators and Representatives, often fail to fully comprehend a basic political truth: when a Democratic President succeeds they succeed and when a Democratic President fails they fail. This political truism is something that Republicans have always understood well. I am really glad that, at least on this issue, these Democratic senators have finally come to their senses.

Wednesday, November 19, 2014

Keystone Is A Reality Check For Democrats Who Oppose The Senate Filibuster Rule

Yesterday, Democrats cheered when the Senate filibustered a bill that would have granted approval to construction of the Keystone pipeline. A majority of Senators voted for the bill. In fact 59 senators voted for the bill. But since the Senate has a filibuster rule that allows 41 Senators to keep a bill from coming to the floor the bill was defeated. This vote really presents Democrats with a reality check on the use of the filibuster.

For years, Democrats have decried the use of the filibuster by Republicans, and rightly so. In fact, on the same day that the Senate blocked the Keystone bill, Republicans used the filibuster to block a Democratic proposal to overhaul the NSA's program for the bulk collection of telephone data. During President Obama's years in office countless bills have been blocked by a minority of Senators and Democrats have rightly been critical. But now, the shoe is on the other foot and in the next two years we will see more and more bills proposed by Republicans that the Democrats will filibuster.

Contrary to what some assert, the filibuster was never intended to be used in this way. Yes, the Senate was designed in part to be the "cooling saucer" that would be able to check the "unrestrained passions" of the House by providing each State, no matter how large or small, an equal voice in deciding whether laws should be enacted. To give effect to that intent, Senate rules allowed for unlimited debate, even by a small minority of senators, a process referred to as the filibuster. The filibuster was established to allow a minority of senators to delay legislation. However, the filibuster was not intended to allow a minority of Senators to prohibit the consideration of legislation and thereby block it indefinitely.

Many, such as myself, would like to see the Senate rules changed to allow unlimited debate by a minority but not permit that same minority to indefinitely block the consideration of legislation. It is wrong that a minority of Senators, sometimes representing a very small minority of the United States population can keep popular legislation from moving forward. But in doing so we must also accept that there will be circumstances in which terrible legislation will be advanced by a majority of Republican Senators. We should willing to accept that fact with the knowledge that if there is a Democratic House the bill can be blocked, and if there is a Democratic President the bill can be vetoed. And if not, if all branches of the government are controlled by Republicans, we must accept the outcome.

Tuesday, November 18, 2014

Time To Take Action To "Save Our Healthcare"

The Supreme Court is considering a case that could take away health insurance subsidies from working people in thirty-four States. Those are the States whose health insurance exchanges were set up by the Federal government, when those States refused to do so on their own. Seven states have actively sought to have the Supreme Court take away their citizen's health insurance and 27 others have sat on the sidelines, possibly in hope that the same thing happens to their citizens. We are talking about the health insurance of over 5 million people.

The people in those states have the capacity to influence the Court and at the same time bring to light the actions of their Governors, Attorneys General and Legislatures. That influence can be achieved by:

* Informing all those who have subsidized health insurance in each of the 34 states involved that their health insurance is at risk because those subsidies could be taken away by a decision of the Supreme Court.

* Informing these people that the governor and legislature in their state has either asked the Supreme Court to take away their ability to buy health insurance or has not asked the Court to protect their health care.

* Doing this could actually influence the governors and legislators in these 34 states to either retract their support for denying insurance subsidies or cause them to oppose a Supreme Court decision that would have that effect.

* Together, pressure from these states could have a real affect on the ultimate Supreme Court decision.

* At the very least, the hard working people of these states would understand who is on their side, who is looking out for their interests, and why they should hold their elected officials accountable.

The risk to the health insurance of these people began when the Supreme Court decided to hear King v Burwell. In that case a group of ACA opponents sought to undermine the law by arguing that a wording glitch in the law meant that people buying insurance on the Federal exchange could not get any subsidies. They lost the case in the District Court and the Appeals Court and are now seeking Supreme Court review.

In a sane world every state that did not set up an exchange would have supported the King v Burwell decision and would have said that there was no need for Supreme Court review. After all, these States did not have to spend money to set up an exchange. And if there are no subsidies available to their citizens through the Federal Exchange many of those folks will not be able to afford insurance. Also, unlike the issue of Medicaid expansion, this issue does not involve the expenditure of State funds. The States do not pay a cent towards these subsidies.

But it is not a sane world. There are 34 states which refused to set up health insurance exchanges and thus required the federal government to set up exchanges for them. Those exchanges are referred to by the Department of Health and Human Services as Federally Facilitated Exchanges. They cover 5,446,178 people. Of those over 5 million people, 86% receive subsidies enabling them to buy their insurance and the average subsidy is $4700. (This is May 1, 2014 data.)

Seven of those 34 states have actively sought to have the Supreme Court take away the insurance subsidies provided to their citizens. Those states are Oklahoma Alabama Georgia Indiana Nebraska South Carolina and West Virginia. Together, there are 2,573,585 people in those seven states who are receiving health insurance through the federally facilitated exchange for each of those states and 82% of those 2 1/2 million people are receiving subsidies. That means the governors, attorneys general, and/or legislature doors of those states are asking the Supreme Court to deny basic healthcare two over 2 1/2 million residents of those states.

But the sad truth is that many people in those states may be unaware of the actions of their elected officials. Is it conceivable that these people, many of whom have health insurance now for the first time, are aware that not only is their healthcare at risk but also that their elected officials are behind the effort to take it away? No, it is not, and for a simple reason. Most people simply have too much difficulty working their daily jobs, taking care of their families, and trying to keep their financial heads above water to spend time researching the intricacies of state government or health insurance policy, let alone the actions of the Supreme Court. It is not their fault that they may be unaware of what is about to happen to them but it would be our fault if we did not do everything possible to make them aware and give them the information needed to make their voices heard.

Now is theme for the people in these 34 states to become aware of what is being done or not being done in their names. They could start with letters to the editors from hard-working people whose health care is in jeopardy. They could also begin to circulate petitions to their governors, attorneys general, and state representatives. Social media could be used to spread the word and inform everyone of what is at stake.

The reality is the people who would be affected by a negative Supreme Court decision are hard-working people who seek only a modicum of health security for themselves and the members of their families. It is not too much to ask. Hopefully, their efforts could receive the attention of parties who have the financial resources necessary to begin an outreach campaign and even provide advertising in those states.

There is still plenty of time for people to take control of their future. But if they do not, they may find out too late that the health security they always wanted has been taken from them.

* * * * * *

It is not the purpose of this article to get into the merits of the challenge to the King v Burwell decision since that challenge ignores all precedent and all rules of statutory construction. However, for those who think that there is any serious merit to the argument that the Affordable Care Act does not authorize subsidies for state exchanges that are established within a federally facilitated exchange here are two things to consider.

The challengers sole argument is that one section of the law that refers to subsidies says that they are available on "an Exchange established by a State" and that these were established by the Federal Government not by States. The DOJ points out the same law imposes a mandatory requirement for each to set up an exchange, but provides that for any state that elects not to establish an exchange that Federal Government must establish one in its stead, and that for all purpose of the law each of those Federally Facilitated Exchanges is "an exchange established by a State." Here is the summary from the Solicitor General's brief, which eviscerates the challengers' arguments.

The Act provides that each State “shall * * * establish an American Health Benefits Exchange.” 42 U.S.C. 18031(b)(1). But, in a provision expressly designed to respect the sovereign dignity of each State by affording “State flexibility,” 42 U.S.C. 18041, the Act provides two ways for that requirement to be satisfied. First, a State may elect to create the Exchange on its own. 42 U.S.C. 18041(b). Alternatively, if a State does not elect to establish the “required Exchange” itself, then HHS will “establish and operate such Exchange within the State.” 42 U.S.C. 18041(c)(1). Either choice satisfies Section 18031(b)(1)’s requirement that each State “shall * * * establish an [Exchange].” The text of the Act thus makes clear that an Exchange established by HHS in a State’s stead is, as a matter of law, “an Ex- change established by the State.”

That interpretation harmonizes the Act’s text, structure, and purpose. Petitioners’ reading, in contrast, would transform the Act into a hash of superfluities, absurdities, and internal contradictions. It would obstruct the Act’s express purpose by denying affordable insurance to millions of Americans. It would thwart the operation of the Act’s interdepend- ent reforms and gut the Exchanges through which those reforms are implemented. And it would destroy the Act’s model of cooperative federalism by trans- forming the Act’s promise of “State flexibility” into a threat that a State may forgo establishing an Ex- change for itself only at the price of crippling its insurance market and depriving its citizens of the tax credits at the heart of the Act. The Act unambiguously forecloses that construction. At a minimum, the IRS’s interpretation is a permissible one meriting deference under Chevron.

The brief goes on to explain these arguments in detail. It is well worth the reading.

Next are the words of Justice Antonin Scalia in the case upholding the ACA, National Federation of Independent Business v Sibelius. He wrote a scathing dissent to the majority opinion upholding the constitutionality of the ACA and in the course of that dissent made clear his understanding that subsidies are available to all people purchasing insurance under the ACA, whether through a state established or federally facilitated state exchange. He makes no distinction between the two, as illustrated by this excerpt discussing the Medicaid portion of the bill. The discussion is a bit convoluted because he is saying that while there is a backup plan for the Federal government to set up an exchange for a state refusing to set up an exchange or cover legal aliens, including subsidies, there is no similar backup for a state refusing to expand Medicaid. And because there is no backup the Medicaid expansion is Unconstitutional. But what is important here is how he describes the statutory structure.

If Congress had thought that States might actually refuse to go along with the expansion of Medicaid, Congress would surely have devised a backup scheme so that the most vulnerable groups in our society, those previously eligible for Medicaid, would not be left out in the cold. But nowhere in the over 900-page Act is such a scheme to be found. By contrast, because Congress thought that some States might decline federal funding for the operation of a “health benefit exchange,” Congress provided a backup scheme; if a State declines to participate in the operation of an exchange, the Federal Government will step in and operate an exchange in that State. See 42 U. S. C. §18041(c)(1). Likewise, knowing that States would not necessarily provide affordable health insurance for aliens lawfully present in the United States because Medicaid does not require States to provide such coverage Congress extended the availability of the new federal insurance subsidies to all aliens. See 26 U. S. C. §36B(c)(1)(B)(ii) (excepting from the income limit individualswho are “not eligible for the medicaid program . . . by reason of [their] alien status”). Congress did not make these subsidies available for citizens with incomes below the poverty level because Congress obviously assumed that they would be covered by Medicaid. If Congress had contemplated that some of these citizens would be left without Medicaid coverage as a result of a State’s withdrawal or expulsion from the program, Congress surely would have made them eligible for the tax subsidies provided for.

Now, no one expects Justice Scalia to be consistent when it comes to the ACA. He has proven that his decisions are motivated purely by reactionary politics and have little to do with the law. However, it is very clear that he as well as all of the other justices who decided the original challenge to the ACA understood that subsidies were available to people buying insurance whether that insurance was purchased on an exchange established by a state or established for a state by the federal government. If they choose to do the mental gymnastics necessary to get around that simple fact, so be it. But everyone will know exactly what they are doing.

Friday, November 07, 2014

In A Sane World Oklahoma, Alabama And Five Other Red States Would Be Siding With Obama On The ACA Case

The Supreme Court has decided to hear King v Burwell, the case that rejected a challenge to the ACA by die hard ACA opponents. They had argued that a wording glitch in the law meant that people buying insurance on the Federal exchange could not get any subsidies. They lost the case and are now seeking Supreme Court review.

In a sane world every state that did not set up an exchange would have supported the Burwell decision and would have said that there was no need for Supreme Court review. After all, these States did not have to spend money to set up an exchange. And if subsidies are not available to their citizens through the Federal Exchange many of those folks will not be able to afford insurance. Also, unlike the issue of Medicaid expansion, this issue does not involve the expenditure of State funds. The States do not pay a cent towards these subsidies.

But it is not a sane world, which is why Ok, AL, Ga, IN, NE, SC and WV filed a petition together asking the Supreme Court to review the Burwell decision and strongly hinting it should be overturned. Their stated reason was that the matter needed to be settled so that they would know whether they needed to set up exchanges. But both their words and the tenor of their petition was that they hope that the Court will effectively neuter the ACA in a large part of the country. This is Obama derangement syndrome at its worst.

It is interesting that the Court agreed to take the Burwell even though there is no split among the Circuits on the issue. There had been an earlier conflicting decision in the DC Circuit but that decision was set aside when the full DC Circuit decided to rehear the case. Many observers worry that this does not bode well for the ACA. But the optimist in me hopes that Justice Roberts, who already passed on a chance to kill the ACA when he uphold the individual mandate, is not going to turn around and neuter it by striking down the subsidies. After all, the mandate made people do something but here you are just giving them money and helping them afford insurance. I also hope Kennedy upholds the subsidies as a way to finally get on the right side of the ACA.

As to the merits of the argument against subsidies in the Federal exchange, the Solicitor Generals brief eviscerates the challengers arguments.

The challengers sole argument is that one section of the law that refers to subsidies says that they are available on "an Exchange established by a State" and therefore subsidies are unavailable if the Federal Government sets up an exchange for a State. The DOJ points out that there are numerous other provisions of the law that make clear that for any state that elects not to establish an exchange that Federal Government can establish one in its stead and for all purpose of the law that too is "an exchange established by a State." Here is the summary from DOJ's brief,

The Act provides that each State “shall * * * establish an American Health Benefits Exchange.” 42 U.S.C. 18031(b)(1). But, in a provision expressly designed to respect the sovereign dignity of each State by affording “State flexibility,” 42 U.S.C. 18041, the Act provides two ways for that requirement to be satisfied. First, a State may elect to create the Exchange on its own. 42 U.S.C. 18041(b). Alternatively, if a State does not elect to establish the “required Exchange” itself, then HHS will “establish and operate such Exchange within the State.” 42 U.S.C. 18041(c)(1). Either choice satisfies Section 18031(b)(1)’s requirement that each State “shall * * * establish an [Exchange].” The text of the Act thus makes clear that an Exchange established by HHS in a State’s stead is, as a matter of law, “an Ex- change established by the State.”

That interpretation harmonizes the Act’s text, structure, and purpose. Petitioners’ reading, in contrast, would transform the Act into a hash of superfluities, absurdities, and internal contradictions. It would obstruct the Act’s express purpose by denying affordable insurance to millions of Americans. It would thwart the operation of the Act’s interdepend- ent reforms and gut the Exchanges through which those reforms are implemented. And it would destroy the Act’s model of cooperative federalism by trans- forming the Act’s promise of “State flexibility” into a threat that a State may forgo establishing an Ex- change for itself only at the price of crippling its insurance market and depriving its citizens of the tax credits at the heart of the Act. The Act unambiguously forecloses that construction. At a minimum, the IRS’s interpretation is a permissible one meriting deference under Chevron.

The brief goes on to explain these arguments in detail. It is well worth the reading.

But we are left with this. There are States that are led by people who hate the President so much that they will go to any lengths, conjure up any bogus arguments,and pursue any course to attack the President and his Presidency even if it directly harms the lives, health and financial security of their own citizens.

Thursday, July 24, 2014

HHS Reports That The ACA Has Saved Consumers $9 Billion

The Department of Health and Human Services issued a report today explaining that the Affordable Care Act has saved consumers $9 Billion since it was enacted. The bulk of the savings was in reduced premiums. But it also included $330 million of refunds to consumers when their insurance companies spent more than 20% of premiums on overhead. Here is a link to the actual report.

An HHS report released today shows that last year alone, consumers nationwide saved $3.8 billion up front on their premiums as insurance companies operated more efficiently. Additionally, consumers nationwide will save $330 million in refunds, with 6.8 million consumers due to receive an average refund benefit of $80 per family. This standard and other Affordable Care Act standards contributed to consumers saving approximately $4.1 billion on premiums in 2013, for a total of $9 billion in savings since the MLR program’s inception.

These savings all come from the 80:20 medical loss ration that requires insurers to limit their overhead to 20% of premiums. The effect of this requirement has been premium reductions totaling $3.8 Billion in 2013 alone. And the insurers who did not reduce their premiums were required to issue refunds to their customers. In the first three years the refunds that have been or will be paid totaled $1.9 Billion.

Most significantly, in the individual insurance market the spending on overhead dropped from 15.3% in 2011 to 11.7% in 2013.

The report also charts how refunds are declining each year as insurers reduce their premiums, which is exactly how the law was intended to work. For instance, in the individual market refunds went from $399 Million in 2011 to $192 Million in 2012 and $128 Million in 2013. There were similar reductions in the small group and large group markets. And in the aggregate, for all markets, refunds went from $1.1 Billion in 2011 to $332 Million in 2013. But most significantly those refund reduction were a direct result of insurers reducing their premiums to the point that for 2013 the ACA caused premium reductions in all markets of $3.85 Billion


This is real progress.