SCOTUS lawsuit NOT a challenge to the ACA... the lawsuit's aim is to UPHOLD the ACA

[True Earthling]

and strike down the IRS "tax-credit rule" established in May 2012 in states with federal exchanges.

Based on some of the posts I've read there seems to be some misperception about what the King vs. Burwell lawsuit that the SCOTUS is ruling on is about. After the ACA passed, 36 red states refused or failed to establish state exchanges. In order to force ACA implementation, the IRS proposed a rule to provide tax credits and implement penalties in states with federal exchanges. The ACA's main taxing and spending provisions may not allow IRS leeway to enforce such a rule. The legality of this ruling is what the SCOTUS will be deciding.

SCOTUSblog provides excellent analysis and clears up myths vs. facts with regards to King vs. Burwell...

http://www.scotusblog.com/case-files/cases/king-v-burwell/

Symposium: Seven myths about King v. Burwell
http://www.scotusblog.com/2014/11/symposium-seven-myths-about-king-v-burwell/

It is legally and factually incorrect to describe these cases as “challenges to the ACA.” This is particularly important because the actual legal posture of these cases is far more troubling. The plaintiffs in King are not asking the Supreme Court to block any part of the ACA. They are asking the Court to uphold the Act by blocking the IRS’s unilateral attempt to strike down the Act’s clear language. Here’s how. Section 1311 directs states to establish exchanges, and Section 1321 directs the federal government to establish exchanges “within” any state that fails to do so.

Section 1401 authorizes subsidies (nominally, “tax credits”) for exchange enrollees 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.” Each of these eligibility restrictions is as clear as the next. The statute makes no provision for subsidies in federally established exchanges.

The mere availability of exchange subsidies triggers penalties under the ACA’s employer and individual mandates. Under the statute, then, if a state does not establish an exchange: (1) those subsidies are not available; (2) a state’s employers are exempt from the employer mandate; and (3) the lion’s share of its residents are exempt from the individual mandate. This appears to have been the IRS’s initial interpretation of the statute, at least until something went terribly wrong.

Early drafts of the IRS’s implementing regulations reflected the statutory requirement that exchange subsidies are available only through “an Exchange established by the State.” Following sweeping Republican gains in state governments in 2010 and discussions with the White House and Treasury Department, however, the IRS changed its draft regulations in March 2011. In August 2011, the IRS issued a proposed rule announcing it would provide tax credits (and implement the resulting penalties) in states with federal exchanges too. Treasury and IRS officials later admitted to congressional investigators they knew the statute did not authorize them to issue tax credits through federal exchanges, and that they have no records of researching the statute or its legislative history before deciding to jettison this requirement.

[Skink]

1. The contemt Gov's try to write law.

[SickOfTheOnePct]

2. True

But the effect will be the same, regardless of the motive. If the plaintiffs win, people getting their insurance through the federal exchange will not be able to get subsidies.

[KaryninMiami]

3. Correct (unfortunately).

Over 5 million of us, in mostly red states, will no longer be able to afford really comprehensive policies.

[WillowTree]

4. Which might well initiate the collapse of ACA.

[True Earthling]

6. Myth #6: King would deny health-insurance subsidies to four million Americans.

From the same link...

If the Supreme Court vacates the IRS rule, it would be recognition that the ACA itself denies subsidies to those four million federal-exchange enrollees – just as the statute denies exchange subsidies to millions of Americans for other reasons, and denies Medicaid coverage to the poor in states that fail to cooperate.

Indeed, the IRS is already requiring potentially hundreds of thousands of ineligible recipients, across all fifty states, to repay some or all of the exchange subsidies they erroneously received. Vacating the IRS rule would only affect how often that happens.

Myth #7: King would cause massive disruption.

These cases would not cause disruption. They seek to end the political and economic disruption caused by the IRS’s decision to expand the ACA’s major taxing and spending provisions outside the legislative process.

How much disruption the IRS rule ultimately causes depends on how Congress responds to its being struck down. Congress could simply ratify the IRS’s revision of the statute by authorizing subsidies in federal exchanges. Or it could move in the opposite direction, and make private insurance more affordable for millions, particularly low-income Americans, by actually reducing its cost.

If the plaintiffs win I would bet that the repubs will propose a fixed tax credit or subsidy for every American to buy health insurance for himself. One of the problems currently is that with employer purchased health insurance you pay no income or payroll taxes where individuals paying for health insurance out of pocket are paying with after-tax dollars. Equalizing the tax treatment would be another way to make it more affordable.

[SickOfTheOnePct]

7. From the link

If the Supreme Court vacates the IRS rule, it would be recognition that the ACA itself denies subsidies to those four million federal-exchange enrollees – just as the statute denies exchange subsidies to millions of Americans for other reasons, and denies Medicaid coverage to the poor in states that fail to cooperate.

It doesn't matter how the subsidies are denied, it is the fact that if the plaintiffs prevail, the subsidies will be denied.

And what makes you think that the Republicans would do anything to help people that are now receiving the subsidies? They WANT the ACA to fail, and denying subsidies to millions of people that then couldn't afford to buy insurance is a big step in that direction.

[True Earthling]

11. The repubs were floating those ideas in the last POTUS election

We'll see.

[HereSince1628]

8. Wouldn't they also be expected to give back the tax credit?

[SickOfTheOnePct]

9. I would think so

but my God, can you imagine??? Millions of people having IRS liens placed against their homes, wage garnishment, etc?

A real-life nightmare.

[HereSince1628]

10. Yes, a real nightmare of national proportion.

a thousand dollars from millions of people...that'd be a pretty big hit on consumer spending from folks at the lower end.

[ctaylors6]

5. the language of the statute

is still central to the case. It's the source of authority for the IRS rules & regs. And the legislative history of the ACA is relevant.

The legal framework is, however, different because it's the regs at issue and not the statute itself.

Also, it's not a question of whether the ACA is constitutional either (which I have seen discussed on lots of forums).

[pnwmom]

12. Of course the intent of the challengers is to defeat the bill. That is why these conservatives

brought the lawsuit.

It is common for bills that are thousands of pages long to have discrepancies like this. None of the legislators who wrote the law say that their intent was to limit the subsidies to people on the state exchanges only. That would make no sense. They originally thought that all the states would want local control and would therefore choose to have their own exchanges. When this didn't happen, the drafters of the bill missed this correction. "state exchanges" should be been changed to "exchanges" or "state and federal exchanges." The intent of Congress was clear all along, even with the proofreading error.

http://www.newrepublic.com/article/118851/jonathan-gruber-halbig-says-quote-exchanges-was-mistake

[SolutionisSolidarity]

13. Author is from the Cato Institute.

nm

[lumberjack_jeff]

14. Thanks.

Explains much.

[BillZBubb]

15. The article is baloney. Of course it is an assualt on the ACA.

The republicans didn't bring this suit in order to improve the ACA, they brought it to undermine it. If the subsides are struck down by the court a lot of bad consequences ensue. Which is just what the right wing hopes for.

[Rstrstx]

17. Look at who wrote it

Per Scotusblog:

Michael F. Cannon (@mfcannon) is director of health policy studies at the libertarian Cato Institute and coauthor (with Jonathan H. Adler) of the leading academic treatment of King v. Burwell, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA

[karynnj]

16. How disingenuous! This is written by someone from the CATO institute -- and it is anti ACA

The arguments are framed from a right wing point of view that NEVER thought the ACA should exist.