The Halbig and King Decisions Highlight the FUBAR that is Obamacare

Yesterday, a The US Court of Appeals for the DC Circuit issued a ruling in the case of Halbig v. Burwell.  The plaintiff, Jacqueline Halbig, was the senior policy adviser to the Department of Health and Human Services under President George W. Bush.  In her lawsuit, Halbig contended that under the Patient Protection and Affordable Care Act (Obamacare) as written and signed into law, only those who purchased an insurance policy through a state-run insurance exchange would be eligible to receive Federal insurance premium subsidies.  Those who purchased their policies through the Federal exchange ( were ineligible to receive the subsidies.

Indeed, this is what the PPACA says.  Again and again, in the sections that outline the creation of the state and Federal insurance exchanges, the law makes no mention of subsidy availability through the Federal marketplace.  It seems clear that the authors of the bill were deliberately trying to make the Federal exchange less attractive than state exchanges.  And if you recall, the PPACA also gave the Federal Department of Health and Human Services the power to withhold all Federal Medicaid funding from states that declined to set up their own health care exchange — until the Supreme Court ruled that this power was unconstitutional.

With the power to defund Medicaid taken away from HHS by the Supreme Court, individual states were no longer under pressure to build their own insurance exchanges.  Only 17 states set up their own exchanges, with seven more participating in a marketplace partnership with the Federal government.  Obviously this was a situation that was completely unforeseen by the authors of the bill, who fully expected state exchanges to issue the vast majority of new Obamacare-compliant insurance policies.

It fell upon the IRS to remedy the situation.  In a new rule announced in May 2012, the IRS announced that policies purchased through the Federal exchanges would indeed qualify for subsidies.  They did not seek a formal legislative change to the PPACA.  Rather, they simply enacted a rule that countermanded the clear language of the existing law, because the law as written would have been a disaster.

So, does the IRS or any other Federal agency have the power to enact rules that “fix” a poorly written law, without the consent of Congress?  In yesterday’s decision, the DC Circuit court clearly said “no”; they sided 2-1 with the plaintiff, Jacqueline Halbig.  But in another lawsuit (King v. Burwell) questioning the same IRS rule, the Fourth Circuit appellate court ruled yesterday 3-0 in favor of the government, stating that the agency rule was the right thing to do since the written law would have denied insureds equal access to the subsidies.  It appears that the issue is still not clearly settled.

Which leads me to ask an obvious question: why have so many provisions of the PPACA, upon a second look, been deemed bad enough to either eliminate or amend?  To date, and not including yesterday’s appellate court rulings, there have been 42 administrative, judicial, and legislative changes to the PPACA as it was signed into law by President Obama.  This was to be the “signature achievement” of the Obama Presidency, but no other social welfare bill of this size or scope has required over three dozen “fixes” in its first two years of implementation.  And no doubt there will be more in the months leading up to the 2014 mid-term elections.

Part of the problem, naturally, is the enormous complexity of the law.  The final bill, as signed into law by the President, was 906 pages long.  This document was created by reconciling two even bigger ones – HR3962 (the Affordable Healthcare for America Act) passed in by the House of Representatives in November 2009 at 1990 pages, and the Patient Protection and Affordable Care Act, passed by the Senate in December 2009 at 2409 pages.

Another reason for the bloated size of the bill involves the politics of its passage by Congress.  Senate Majority Harry Reid was under a lot of pressure after the death of Ted Kennedy in August of 2009.  With Kennedy (or his hand-picked temporary replacement, Paul G. Kirk) on board, Senate Democrats had a veto-proof 60 member majority.  Republicans had no way to oppose the final vote on the bill.  But with Republican Scott Brown favored to win the special January 2010 runoff election for Kennedy’s Massachusetts Senate seat, the 60 member majority was in jeopardy.

Reid knew he had to pass a health care bill by the end of December, before the Holiday recess and before the Massachusetts special election.  But Republicans could still slow down the debate process, and the House bill was far to long and complicated to move to a floor vote in just a few weeks.  To remedy this situation, Reid took a totally unrelated House bill (HR3590, the Service Members Home Ownership Tax Act of 2009) and attached the healthcare reform bill that had been previously drafted by the Senate (the Patient Protection and Affordable Care Act) as a 2400 page “amendment.”

The newly transformed bill, which had already been overwhelmingly passed by the House, was then passed by the Senate on December 24, 2009.  Reid and Pelosi agreed that this trick was the equivalent of both houses of Congress passing the same bill.  Reconciling HR3962 and the new Senate version of HR3590 into a final bill would be taken care of before the President signed the bill into law.

As we have seen, the reconciliation of these two bills left much to be desired.  And there’s something else.  It was the Senate version of HR3590, 99% of which consisted of the health care reform amendment, that became the outline for the final law.  Therefore the structure of the bill, including its numerous tax and revenue provisions, originated in the Senate.  Further complicating the issue is the fact that the Supreme Court ruled that the Health Care Mandate, which is the central foundation of the law, is in essence a tax.  And as any fourth grader can tell you, tax and revenue bills can only originate in the House of Representatives, as stipulated in Article I Section 7 of the Constitution.

It still remains to be seen if the Constitution’s revenue provisions could be used to successfully challenge the validity of the law.  The stakes of such a case would be so high that Federal appellate courts, including the US Supreme court, might simply refuse to hear it.  But one thing is very clear — Obamacare is so deeply flawed that it will probably never work the way its supporters had hoped.


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  • Retired military

    “But one thing is very clear — Obamacare is so deeply flawed that it will probably never work the way its supporters had hoped”
    Sure it will. it will crash the entire healthcare system, cost trillions of dollars and not be anywhere as near efficient nor near the quality of the system it replaced.

    • jim_m

      It will crush the healthcare system, which is exactly what Obama friend Rep. Jan Schackowsky claimed it was intended to do.

      It will also create an excuse for government by executive fiat, which is exactly how Obama has been governing.

    • Commander_Chico

      Give everyone Tricare like we have.

      • ‘Give’?

        • Commander_Chico

          In return for paying taxes like every other government service.

          Fund it with a VAT if necessary.

          • jim_m

            Absolutely! Let’s fund it with the most regressive tax possible. A tax that hits the poorest of the poor the hardest and penalizes them for every single financial transaction they make.

            And don’t say that you can give them a credit at the end of the year. It does them no good to take money out of their hands and pay them back at the end of the year.
            And lefties pretend to be the protectors of the poor. Seems that they are the predators of the poor.

          • The left love the poor, as long as they’re useful for political reasons.

            You might find this interesting, Jim… Especially her #1 reason.


            How far left was I? So far left my beloved uncle was a card-carrying member of the Communist Party in a Communist country. When I returned to his Slovak village to buy him a mass card, the priest refused to sell me one. So far left that a self-identified terrorist proposed marriage to me. So far left I was a two-time Peace Corps volunteer and I have a degree from UC Berkeley. So far left that my Teamster mother used to tell anyone who would listen that she voted for Gus Hall, Communist Party chairman, for president. I wore a button saying “Eat the Rich.” To me it wasn’t a metaphor.

            I voted Republican in the last presidential election.

            Below are the top ten reasons I am no longer a leftist. This is not a rigorous comparison of theories. This list is idiosyncratic, impressionistic, and intuitive. It’s an accounting of the milestones on my herky-jerky journey.

          • “In return for paying taxes like every other government service.”

            So only those paying taxes get to use it?

          • Commander_Chico

            Everybody pays taxes – sales tax, gasoline tax, cigarette tax, booze tax.

          • Sales tax for the state. Gas taxes for state and fed. Cigarette taxes for state and fed. Booze, state and fed.

            Hike those, and you’ll see money from them, for a time until the low-information-voter realizes his smokes are $8 a pack, and that six-pack is now running $12.

            (Hey, an unanticipated consequence! Poor folks will drink and smoke less!)

            Oh, of course, I forgot EITC.


            I’d say we should do away with that before we hike taxes on the others.

          • jim_m

            But if people drink and smoke less, then tax revenue will go down and the government will have to hike taxes again and on more items, further punishing the poor.

          • Yes, the law of unanticipated consequences bites again.

          • jim_m

            More unintended consequences

            Chico endorses the murder of people so the state can collect the cigarette tax.

      • jim_m

        Yeah, because everyone is clamoring for VA healthcare. Adding over 300,000,000 people won’t create any waiting list problems.

        • Commander_Chico

          Tricare is not VA care, if you were in the military you would know that.

          • Chico’s correct. It’s a lot more like a slow-paying Medicare, not universally accepted, and finding a doctor that will take you can be problematic in some areas of the country.

          • jim_m

            Does it pay like Medicare too? ie less than 50%? That’s probably why no one takes it.

          • I’ve heard it pays pretty low – which may well be a factor.

          • jim_m

            It pays about 45% of the charges. If you want to know why your charges are so high, it is because federally funded programs don’t pay and so providers have to shift those costs onto everyone else.

            Your medical bills are outrageously high because the government won’t pay and you are paying other people’s medical expenses, first through your taxes and second through your own medical expenses.

    • LiberalNightmare

      Sounds like its working exactly the way it was meant to.

  • GarandFan

    No worries! Any problems or political consequences, His Majesty, King Barack the Magnificent (He with a pen and a phone) will simply CHANGE THE LAW.

    You don’t like ObamaCare today, King Barack will change it tomorrow.

  • Par4Course

    The court ruling for the regime in King v. Burwell admits that, if the statute is read literally, only insurance purchased from state exchanges qualify for subsidies. The court also admits that Congress could have written the law to expressly include purchases from federally-established exchanges but failed to do so. Ultimately, the King court finds the law ambiguous and, rather than interpreting it to mean what it actually says, gives it a broad reading so that purchases from the federally-established exchanges qualify for subsidies. In other words, the King v. Burwell court, in effect, re-wrote the statute to say what it thought Congress should have said rather than what the law actually says.

    • Jwb10001

      And that sounds very much like making law from the bench. Clearly a breach of the separation of powers. It seems that clause of the constitution has been rendered non applicable these days.

  • JWH

    Meh. This thing keeps getting more and more complicated. I still think that if we were going to craft a scheme with high government participation, the best solution would have been a national, high-deductible Medicare for All plan that covers basic emergency services, financed by a payroll tax.

  • Hank_M

    “Obamacare is so deeply flawed that it will probably never work the way its supporters had hoped.”

    Well, that depends. Was obamacare really about improving medical care and providing access to everyone? If it was, then there really was no need for Obama and the dems to lie so blatantly to garner support for it. The truth would have sufficed.

    Personally, I think Rep. John DIngell inadvertanly expressed what obamacare was really about in March 2010 when he stated “The harsh fact of the matter is when you’re going to pass legislation that will cover 300 American people in different ways it takes a long time to do the necessary administrative steps that have to be taken to put the legislation together to control the people.”

  • yetanotherjohn

    All flaws must be the fault of racist republicans trying to inflame racists by the dog whistles of a failed law under Obama. The proof of this is the number of republicans who voted for the bill, forcing the flaws in return for their votes. If you don’t agree and see the crystal clear logic of this, then you must be a racist too.