SCOTUS ominously grants cert in King v. Burwell

November 8, 2014

Saturday, November 8, 2014

Good morning:

I’ll take Risible Notions for $5,000 Alex.

The Supreme Court of the United States (SCOTUS) ominously granted certiorari (i.e., agreed to review) the Fourth Circuit’s decision in King v. Burwell rejecting an argument that federal subsidies in the form of tax credits to purchase mandatory health insurance under the Affordable Care Act (AKA: the ACA or Obamacare) are only available to people who live in states that establish exchanges where they can select and purchase a health insurance plan. Only 12 states have set-up exchanges; 38 have not.

The federal government set-up exchanges in the 38 states that opted out. Approximately five million people in those states who have signed-up for health insurance qualify for subsidies (e.g., a single person who makes less than $45,960 or a family of four that makes less than $94,200).

The L.A. Times provides an example.

In most states, a large majority of those buying insurance qualify for subsidies. For example, in Illinois, which uses the federal exchange, about three-quarters of the roughly 200,000 people who enrolled in health coverage this year qualified, according to the Department of Health and Human Services. The subsidies reduced average monthly premiums by more than $200, from $316 to $114 a month.

In other states, the reductions were even more dramatic. In Mississippi, the average monthly premium without a subsidy would have been $438. With subsidies, consumers in the state pay an average of $23 a month.

The argument that federal subsidies are not available to people who sign-up for health insurance in the 38 states that use the federal exchanges is based on language in the statute that limits those subsidies to policies bought on an “exchange established by the state.”

The counter argument is that Congress would not have required everyone to purchase insurance (i.e., the individual mandate), given states a choice to set-up exchanges and directed the federal government to set-up exchanges in the states that opted not to do it, if it intended to not subsidize the cost of insurance purchased from a federal exchange.

Judge Edwards said it best in his dissenting opinion in Halbig v. Burwell, a case with the same issue recently decided by the D.C. Circuit, the appellants peddle a “narrative concocted to provide a colorable explanation for the otherwise risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges.” 758 F.3d at 416 (Edwards, J., dissenting).

Although the decision by the three judge panel in Halbig is contrary to the decision by the Fourth Circuit in King, the D.C. Circuit has granted en banc review of the decision. En Banc review means review by the full court.

The SCOTUS decision to grant cert in King is ominous because a decision to grant cert requires four votes. That means four members of the court likely believe “the risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges.”

Justices Scalia, Thomas, Alito and Kennedy probably voted to grant cert because they voted against the ACA, which Chief Justice Roberts ‘saved’ by joining with the four liberals, Ginsberg, Breyer, Sotomayor and Kagan, to find it constitutional.

The SCOTUS decision in King is critically important because the ACA will collapse and the five million people who purchased subsidized health insurance from federal exchanges in 38 states will be unable to pay for the3ir insurance, if the SCOTUS decides to accept “the risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges.”

This is not my country anymore.

For more information to understand why the ACA cannot survive if the SCOTUS accepts the risible notion, please read the amicus brief filed in Halbig by 49 economists.

Please make a donation. We need your help.

Thank you


%d bloggers like this: