An Exchange Established By The State

I’ve looked through the ACA, to find every place it refers to Exchanges created “by the State”.  The phrase “by the State” is found on 63 pages of the Certified ACA:

Page 403 – 404 of the Certified ACA
(gg) MAINTENANCE OF EFFORT.—
(1) GENERAL REQUIREMENT TO MAINTAIN ELIGIBILITY STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL.
Subject to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the Patient Protection and Affordable Care Act and ends on the date on which the Secretary determines that an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act is fully operational, as a condition for receiving any Federal payments under section 1903(a) for calendar quarters occurring during such period, a State shall not have in effect eligibility standards, methodologies, or procedures under the State plan under this title or under any waiver of such plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect on the date of enactment of the Patient Protection and Affordable Care Act.

This clearly defines “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act” as being different from the Federal Exchange it’s replacing

Page 2154 of the Certified ACA
(C) CERTIFICATION OF COMPARABILITY OF PEDIATRIC COVERAGE OFFERED BY QUALIFIED HEALTH PLANS.—
With respect to each State, the Secretary, not later than April 1, 2015, shall review the benefits offered for children and the cost-sharing imposed with respect to such benefits by qualified health plans offered through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act

This specifies that “qualified health plans offered through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act” are subject to review by the Secretary to make sure that they meet the Federal standards.  This distinguishes from plans set up under a Federal Exchange, where one assumes the Secretary would not allow then into the Exchange unless they met the Federal standards.

All of the rest of the uses of “by the State” connected to “Exchanges” are in the section on CHIP.  In no place is there ever any equivalency created between “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act”, and a Federal “Exchange”.

If we are to believe that Congress was using the offer of ACA subsidies to get States to set up their own Exchanges, I can see no grounds for saying “but they wouldn’t hold children hostage!”  Since, after all, they are holding hostage all the children of people who don’t qualify for CHIP.

More on ObamaCare / Halbig / King

Another nice post from Ziff Blog (here’s my response to the first post of his that I saw).  After some really good comentary, he posts the following questions:

1. If the term “Exchange” is defined in the statute as “an American Health Benefit Exchange established under section 1311 of the [PPACA],” PPACA § 1562(b) (emphasis added), and if section 1311 only provides for state exchanges (with section 1321 providing for federal exchanges), then does the term “Exchange” standing alone, without modification, mean only state-established exchanges?
2. Relatedly, if an Exchange is defined as something established under section 1311, how can the Secretary ever create an Exchange as that term is used in the rest of the PPACA?
3.  If the term “Exchange” is meant to refer inclusively to federal- and state-established exchanges, then what is the effect of the “established under section 1311” language in section 1562(b)?
4. If the PPACA sets up a two-tiered system for federal- and state-established exchanges, where are the provisions governing exchanges “established under section 1321” or “established by the Secretary under section 1321”? If they are absent, why are they absent?
5.  If the term “Exchange” is meant to refer generically to federal- and state-established exchanges, with the phrase “Exchange established by the State” reserved solely for state-established exchanges, then why would the PPACA make federal-established exchanges subject to annual audits by the Secretary if the Secretary is the one operating the exchange?
6. Is a regional exchange operated by a collective of states an “Exchange established by the State under section 1311”? What if one state “established” the Exchange but the other state simply permits the operation of the exchange within its borders, pursuant to section 1311(f)(1)?
7. What is the difference between an Exchange, an “Exchange established pursuant to this title,” section 1303(a)(1)(D), an “Exchange established under this Act,” section 1312(d)(3)(D)(i), an “Exchange established under section 1311,” see, e.g., section 1331(e)(2), and an “Exchange established by the State under 1311,” section 1401(b)(2)(A)? The PPACA uses all of these differing phrases to refer to exchanges.
8. Relatedly, could a state establish an exchange pursuant to a section other than section 1311? Could the Secretary establish an exchange pursuant to section 1311? If not, then why say “established by the State pursuant to section 1311”?

I’m going to skip the first three, because no answer to them affects my argument.

4: They are absent because the only difference between the two types of exchanges is the subsidies, and that’s fully taken care of by the language creating the subsidies.

5: IIRC, the audit language requires a number of reports about who’s getting insurance, etc.  Information needed by the IRS (when enforcing the Individual Mandate) regardless of where the insurance comes from, or whether or not the individual is getting subsidies.

6: I would say that because of the poor writing of the ACA, in neither of those cases would someone be eligible for a subsidy. I’ve changed my mind on this one.  Let’s go back to the text of the ACA:

(A) IN GENERAL.—The term ‘coverage month’ means, with respect to an applicable taxpayer, any month if—

(i) as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act,

In this text “the State” refers to the Exchange, not to the taxpayer.  It is not the taxpayer’s State we’re worried about, but the State that set up the Exchange.  A regional Exchange is still an Exchange set up by the States, not by the Federal Government.  As it is an Exchange set up by the State the individual lives in, the individual would be eligible for subsidies. (The requirement is not set up only by the State, just set up by the State.)  The shared Exchange is an Exchange set up by the State that set it up, not by the Federal Government.  So, again, the person purchasing insurance on that Exchange is eligible for subsidies.

Nothing in the ACA says that the Exchange has to be set up by only the State, or by the State the individual lives in.  So neither is an impediment to a subsidy.

7: I don’t know, ask the people who wrote the ACA.  What I do know is that an Exchange established by the Federal Government is, by definition, not an Exchange established by a State.  And I know know that the ACA established that an Exchange set up by a Territory “shall be treated as a State for purposes of such part“.  No such language exists for the Federal Exchanges.

8: A: A State could have set up a health insurance Exchange 10 years ago (not under a different Section of the ACA, but simply based on its own inherent police powers, and power to regulate health insurance).  What would have stopped a State from doing that? B: I say no, the Halbig Court says Yes.. C: Because they wanted to limit subsidies to Exchanges that were 1: Not set up by the Federal Government and 2: Followed the rules of the ACA.  Which is the point of King and Halbig.

Now, I have three questions for Ziff (or any other anti-Halbig individual):
1: The ACA says that an Exchange set up by Washington DC shall be treated as an Exchange set up by a State.  It says that Exchanges set up by any of the Territories shall be treated the same way.  Is there a fifth type of Exchange?  Or is the only other type of Exchange one set up by the Federal Government?

2: Why was the phrase “an Exchange established by the State under section 1311” used in the ACA, when, under your interpretation, what was meant was “an Exchange”? I don’t have the reference to hand, but I know there’s a Supreme Court precedent to the point that we must assume that Congress put words into a statue for a reason, and an interpretation that makes words superfluous is inherently inferior to one that does not.  Does your argument not suffer from that fatal flaw?

3: Have you read the Halbig majority opinion? Have you put together a point by point refutation of it? If so, where is it?  If not, would it not behoove you to do so?  Wouldn’t that be a far more productive use of your time than arguing with a bunch of bloggers?

Because if you can’t take it down (and I don’t believe you can), you’d better resign yourself to losing in the Supreme Court.