Posts Tagged ‘Halbig’

An Exchange Established By The State

November 9, 2014

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.

Halbig and King, a response to Ziff Blog

August 2, 2014

A left-wing blogger named David Ziff wrote some intelligent commentary on Halbig, and the poor quality of the left’s response.  However, he also wrote the following:

It’s not like we don’t have good textual and contextual arguments on the left! For one, read the Court of Appeals decision in King v. Burwell starting on page 15.

I made the following comment.  Here’s I’ll do it with formatting 🙂

If you’re resting your hopes on the King Court, you’re going to be very disappointed.  First, let’s consider this from the 4th Circuit Opinion:

Section 1321(c) provides that if a state fails to establish an Exchange by January 1, 2014, the Secretary “shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” (emphasis added). The defendants’ position is that the term “such Exchange” refers to a state Exchange that is set up and operated by HHS. In other words, the statute mandates the existence of state Exchanges, but directs HHS to establish such Exchanges when the states fail to do so themselves. In the absence of state action, the federal government is required to step in and create, by definition, “an American Health Benefit Exchange established under [§] 1311” on behalf of the state.

This is really pathetic.  The text says “enrolled in through an Exchange established by the State under [§]1311 of the [Act].”  “By”  Not “on behalf of”.

Second, there’s this, from Halbig (pages 18 – 20):

The dissent [and the 4th Circuit in King] attempts to supply this missing equivalency by pointing to section 1311(d)(1), which provides: “An Exchange shall be a governmental agency or nonprofit entity that is established by a State.” 42 U.S.C. § 18031(d)(1). According to the dissent, (d)(1) means that an Exchange established under section 1311 is, by definition, established by a state. Therefore, the dissent argues, because federal Exchanges are established under section 1311, they too, by definition, are established by a state.
The premise that (d)(1) is definitional, however, does not survive examination of (d)(1)’s context and the ACA’s structure. The other provisions of section 1311(d) are operational requirements, setting forth what Exchanges must (or, in some cases, may) do. See generally 42 U.S.C. § 18031(d)(2)-(7) (listing “[r]equirements”). Read in keeping with that theme, (d)(1) would simply require that an Exchange operate as either a governmental agency or nonprofit entity. But the dissent would have us construe (d)(1) differently. In its view, (d)(1) plays a definitional role unique among section 1311(d)’s otherwise operational provisions, creating a legal fiction that any Exchange is, by definition, established by a state, even when, as a matter of fact, it is not. That reading, however, would render (d)(1) the odd man out twice over: both within section 1311(d) and among the ACA’s other definitional provisions, which, unlike (d)(1), employ the (unmistakably definitional) formula of “The term ‘X’ means . . . .” See, e.g., 42 U.S.C. §§ 300gg-91, 18024; see also 26 U.S.C. § 4980H(c).
The dissent’s reading would also require us to overlook the fact that section 1311(d) would be a strange place for Congress to have buried such a legal fiction. Section 1311, after all, concerns Exchanges that are established by states in fact; the legal fiction the dissent urges would matter only to Exchanges established by the federal government. To accept the dissent’s construction would therefore transform (d)(1) into the proverbial elephant in the mousehole—the “ancillary provision[]” that “alter[s] the fundamental details of a regulatory scheme.” Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 468 (2001). The Supreme Court has repeatedly held that Congress does not legislate in this manner, see id.; accord Gonzales v. Oregon, 546 U.S. 243, 267 (2006), and we see no evidence that it did so here. Indeed, we are particularly loath to accept the dissent’s construction given that there are far more natural locations to place this fiction, such as section 1321 or the provision defining the term “Exchange,” 42 U.S.C. § 300gg-91(d)(21).

Sorry, but the law was written as Gruber was claiming it was written back in 2012: The States would be forced to set up Exchanges by the threat that they would get no subsides.  The threat didn’t work, the gamble failed.  You want that changed?  Then you’re going to have to negotiate with Republicans, and give up a lot.  That’s what happens when you screw up.