Patterico's Pontifications

7/23/2014

Halbig: Exemption of Territories from Coverage Requirements Now Understandable As a Litigation Strategy

Filed under: General — Patterico @ 7:38 am

Remember this odd story from the other day?

Looking for a place where Obamacare doesn’t exist? Try moving to the U.S. Territories, where the Obama administration just provided a pretty big waiver from the law’s major coverage provisions.

The Affordable Care Act’s design dealt a pretty big problem to the territories. It required insurers there to comply with the law’s major market reforms — guaranteed coverage, mandated benefits, limits on profits, etc. — without requiring residents to get coverage or providing subsidies to help them afford coverage. The territories — Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Mariana Islands — have been warning for years that would destroy their insurance markets. The individual mandate and the subsidies are the major ways the ACA tries to bring healthy people into the individual insurance market to balance out sick patients who can no longer be denied coverage.

That was until Wednesday, when the Obama administration told the territories that the coverage requirements actually don’t apply to them. The exemption was posted on a Health and Human Services Web site on Thursday.

This seemed a little puzzling . . . until you read the Halbig decision. Then everything comes into focus: they were sacrificing coverage in the territories to establish a litigation position ahead of the decision.

Here it is in a nutshell. The government argued that the law provided a “three-legged stool” — and the three legs were: (1) “guaranteed issue” (where insurance companies must issue coverage to those with pre-existing conditions); (2) the mandate; and (3) subsidies. The government said that you can’t remove any of these legs without the stool collapsing; therefore the intent to have broad-based subsidies is clear. So, for example, you can’t possibly have a situation where you have “guaranteed issue” unless you have an individual mandate, which establishes a broad base of customers, which makes the economics work for the insurance companies.

The Halbig court replies: sure you can, apparently — because that’s what you do in the territories:

Yet the supposedly unthinkable scenario the government and dissent describe—one in which insurers in states with federal Exchanges remain subject to the community rating and guaranteed issue requirements but lack a broad base of healthy customers to stabilize prices and avoid adverse selection—is exactly what the ACA enacts in such federal territories as the Northern Mariana Islands, where the Act imposes guaranteed issue and community rating requirements without an individual mandate. . . . This combination, predictably, has thrown individual insurance markets in the territories into turmoil. . . . But HHS has nevertheless refused to exempt the territories from the guaranteed issue and community rating requirements, recognizing that, “[h]owever meritorious” the reasons for doing so might be, “HHS is not authorized to choose which provisions of the [ACA] might apply to the territories.”

My guess is that the Government knew that the court was going to be making this argument, somehow — and the Government wanted to be able to tell the Supreme Court (or en banc D.C. Circuit) that it had, in fact, exempted the territories. They wanted not to seem reactive to the Halbig decision — so they made sure to make the announcement before the decision came out.

My favorite part is the quote from HHS: “HHS is not authorized to choose which provisions of the [ACA] might apply to the territories.” Right before they did exactly that.

When the Government trumpets that exemption before future courts, the lawyer for Halbig et al. had better be ready with that quote.

Is HHS allowed to exempt the territories? Apparently, the Obama administration answers as a character from a Monty Python sketch: No! No! No! . . . Yes. A bit.

30 Responses to “Halbig: Exemption of Territories from Coverage Requirements Now Understandable As a Litigation Strategy”

  1. Ding.

    Patterico (9c670f)

  2. Is government collusion across departments illegal at all? I mean, leaking a courts decision prior to it being made public kind of stinks of corruption.

    DejectedHead (a094a6)

  3. judicial pervert john roberts will feast on these yummy sophistries hike up his robe and beg for more

    happyfeet (8ce051)

  4. So it was a political decision. I’m shocked.

    NJRob (5da6c8)

  5. When the Government trumpets that exemption before future courts, the lawyer for Halbig et al. had better be ready with that quote.

    “That statement is no longer operative.”

    Is government collusion across departments illegal at all?

    No, of course not. The administration is one entity. All government departments work for the president; all executive power belongs to him alone, and they exercise it only on his behalf . That’s what the constitution says.

    I mean, leaking a courts decision prior to it being made public kind of stinks of corruption.

    Excuse me? Who leaked the decision, and when? And how would any government department have got hold of it in the first place, in order to leak it?

    Milhouse (469487)

  6. #5 Who leaked the decision? I’m guessing it was the dissenting judge or someone on his staff. But that is just a guess.

    I find it odd that government agencies are touted as operating independently, but they are working together…even across separate branches of government. So much for checks and balances I guess.

    DejectedHead (a094a6)

  7. #5 Who leaked the decision? I’m guessing it was the dissenting judge or someone on his staff. But that is just a guess.

    What are you talking about? What makes you think anyone leaked anything? You’re just making it up. In any case, a judge is not a government department. Make up your mind.

    I find it odd that government agencies are touted as operating independently,

    Who has “touted” such a stupid and illegal thing? You’re making stuff up again. All government agencies and departments work for the president, and not only don’t claim to operate independently, they have no legal right to do so! (Unfortunately, some of them seem to think they do have such a right, especially during Republican administrations.)

    but they are working together…even across separate branches of government. So much for checks and balances I guess.

    Um, there are no government agencies or departments outside the executive branch. The executive branch, which is to say the president, is the government.

    Milhouse (469487)

  8. #7 Milhouse, did you read the blog post that this comment thread is on? What am I talking about? Seriously, I am talking about the “odd story from the other day” in which HHS re-designated territories PRIOR to the Halbig decision being released.

    “All government agencies and departments work for the president”

    Including the IRS which is touted as an independent agency.

    Also, I said “but they are working together…even across separate branches of government.” to which you responded “Um, there are no government agencies or departments outside the executive branch.”

    I was referring to the D.C. circuit possibly leaking its decision to HHS. I was also referring to the 4th Circuit in Virginia timing its release to match the D.C. circuit release. The circuit courts do not reside under the Executive Branch…so thus that appears to be collusion across government branches.

    DejectedHead (a094a6)

  9. Milhouse, did you read the blog post that this comment thread is on?

    Yes, of couse I read it. Where are you getting this bizarre story about the decision being leaked?

    “All government agencies and departments work for the president”

    Including the IRS which is touted as an independent agency.

    Since when? There is no such thing as an “independent agency”. There can’t be, under the constitution. All executive power rests only in the president’s hands. Nobody can exercise any executive power except as his agent.

    I was referring to the D.C. circuit possibly leaking its decision to HHS.

    And I’m asking where the #@!! you pulled
    that from.

    I was also referring to the 4th Circuit in Virginia timing its release to match the D.C. circuit release.

    What has that got to do with collusion? With whom do you imagine the 4th circuit colluded? If it timed its decision on purpose, that’s its own business. In any case, if you want to construct such a scenario without any evidence, it seems far more likely that the DC panel delayed releasing its decision as a courtesy to the 4th circuit panel, rather than vice versa, considering that the DC decision was expected last week. Not that there’s anything wrong with judicial circuits keeping in touch and doing such courtesies for each other. What has it got to do with collusion with the executive? Do you have any evidence of such ex-parte communication? You can’t just make up such an allegation.

    Milhouse (469487)

  10. PS: The Fed is supposed to be independent; to make this legal, it’s technically not a government agency. (This is why you hear conspiracy nuts claim that it’s a private business. In purely formal terms, they’re correct, but for all practical purposes it is a government entity.)

    Milhouse (469487)

  11. The third leg of the stool, broad subsidies, might be an admission against interest for the Administration since it basically implies coverage will be unaffordable to a broad segment of the population without subsidies.

    Remember how Obamacare was sold, promising to bend the cost curve down, and save the average family $2,500 per year. How does that work with they admission the Administration knew Obamacare would drive premium rates through the roof?

    daleyrocks (bf33e9)

  12. Daleyrocks, what you’re missing is that the political process was only necessary in order to get the thing passed. Now that it has been, and the matter is before the courts, politics no longer matter, all that matters is dry legality, so the administration has no problem admitting that it lied through its teeth to get it passed. There are no legal consequences to these lies, so why not admit them?

    Hence the whole tax/penalty thing. Legally, it had to be a tax. Politically, it couldn’t be. So they falsely called it a penalty, and then went to court and pointed out that it was in fact a tax.

    Milhouse (469487)

  13. #9 “And I’m asking where the #@!! you pulled that from.”

    I told you in comment #6. It is a guess. I’m not playing on any evidence. I would hope you could not forget things over the space of 3 comments.

    Furthermore, you seem to be taking this bizarre overreaction to my comments…that I would remind you, started with a question of “Is government collusion across departments illegal at all?”

    To which you answered that is it NOT illegal. And thank you for answering that question. Every other comment has been to answer a question by YOU. I am trying to clarify because you didn’t know what I was talking about. How you can manage to work yourself up in this way, is pretty funny.

    Are you generally offended by people answering questions you ask?

    As for the independent agency thing…here is a blog post about it at the NYTimes.

    http://takingnote.blogs.nytimes.com/2013/05/14/is-the-i-r-s-an-independent-agency/?_php=true&_type=blogs&_r=0

    Apparently the President himself misspoke that the IRS is an independent agency. There are examples of independent agencies there…it is a real thing.

    DejectedHead (a094a6)

  14. Daleyrocks, what you’re missing is that the political process was only necessary in order to get the thing passed.

    Milhouse – That’s not what I’m missing, that’s what I’m pointing out! Stop being obtuse.

    daleyrocks (bf33e9)

  15. McCain had a plan in 2008 that had “guaranteed issue” but no mandate. It simply put everyone — employees, self-employed, etc, into one pool and allowed full tax deductions for the premiums. Employees would pick their own plans and keep them if they changed jobs (or change them with out changing jobs) and the employer could pay them the former premium money as wages, which the deductions would balance.

    Subsidies could exist, or not, depending on policy. The private insurance market would remain in charge. The huge pools would make the influx of the previously uninsured sick a small factor in pricing.

    But that was too simple, it seems.

    Kevin M (b357ee)

  16. What is this “tax” taxing? Not buying insurance? Can you do that? What are the limits on this power? Or is it a poll tax that is remitted when you do buy insurance?

    Kevin M (b357ee)

  17. I don’t see this as being the result of a leak, but as an attempt to influence the court by extending their argument that the federal exchange rules only apply to states and so they are simply federally-constructed exchanges for each non-complying state.

    Kevin M (b357ee)

  18. Kevin M (b357ee) — 7/23/2014 @ 12:18 pm

    And, it was based on a policy proposal written earlier by an academic who was, in 2008, a medical policy advisor for Barack Obama, who denounced McCain’s plan from one end of the country to the other.

    askeptic (efcf22)

  19. #16. The Tax is taxing not buying insurance. Congress gave itself the power to tax whatever it wanted with the overbroad phrasing of the 16th Amendment that authorized the income tax.

    “ARTICLE XVI. The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

    DejectedHead (a094a6)

  20. To a non-lawyer this is very confusing. When you say the Halbig court replies, are you saying they actually replied, or they stated something that would seem to be a reply? I guess the timeline is messing me up.

    And since coverage is no longer guaranteed, what is left of the Act in the territories? Nothing, it seems to me, but a shell with no coverage or subsidies or mandated participants.

    Patricia (5fc097)

  21. > When you say the Halbig court replies, are you saying they actually replied, or they stated something that would seem to be a reply?

    They stated something which would seem to be a reply.

    aphrael (98d2d0)

  22. So, DH, they could tax me for not smoking pot?

    Kevin M (b357ee)

  23. or you could just smoke some pot Mr. M

    or ingest it in a tasty baked good

    don’t buck the system it never ends well

    happyfeet (8ce051)

  24. #22 If it was derived from income, yes, they could. Clearly they have interpreted it as taxing your income because you have money.

    I don’t agree with it, but they added it to the constitution and interpreted it that way apparently.

    DejectedHead (06f486)

  25. I sent my “Representative” in Congress a message asking if there was a way to upgrade California from a State to a Territory.

    malclave (4f3ec1)

  26. #9 “And I’m asking where the #@!! you pulled that from.”

    I told you in comment #6. It is a guess.

    Sorry, if that’s what you meant, it’s not how it came out. If you go back and read what you wrote, in #2 you took it for granted that there was a leak, and in #6 you took a guess at who did it. You still seemed to be running with the assumption that someone leaked it, even if it wasn’t the dissenting judge. That’s why I kept challenging you, because I don’t see any indication that there was a leak at all.

    Are you generally offended by people answering questions you ask?

    No, of course not. It didn’t appear that you were answering.

    There are examples of independent agencies there…it is a real thing.

    Not really. The constitution doesn’t really allow such a thing. What independence these agencies have rests on Humphrey’s Executor and Morrison v Olson; Scalia’s dissent in Morrison seems to me compelling. But even under these precedents these agencies have to be performing “quasi-legislative” or “quasi-judicial” functions.

    In any case, the bottom line is that a judge colluding with the government (which was a party to the case) would be shocking and definitely illegal. But I don’t see any evidence that such a thing happened. As for government departments, it’s fine for them to “collude” with each other, since they’re all the president’s agents; but a judge is not a government department, and doesn’t work for the president.

    Milhouse (469487)

  27. What is this “tax” taxing? Not buying insurance? Can you do that? What are the limits on this power?

    No, you can’t do that.

    Or is it a poll tax that is remitted when you do buy insurance?

    Not a poll tax as such, because it varies according to a person’s income. That makes it a kind of income tax, I suppose.

    So, DH, they could tax me for not smoking pot?

    No, they couldn’t, but I suppose they could impose a poll tax and exempt anyone who can show receipts from an authorised cannabis dealer. I don’t think they could insist that you actually smoke it in order to get the exemption, though.

    Milhouse (469487)

  28. #26 Milhouse, you could just apologize for your gross overreaction. I don’t know why you are leading with the idea that I am trying to litigate a case against a federal judge through a comment section on a blog. That is generally not a correct assumption.

    Dejectedhead (a094a6)

  29. Milhouse (469487) — 7/23/2014 @ 8:51 am

    Excuse me? Who leaked the decision, and when?

    The printers?

    Or this whole issue of U.S territories might have been addressed in lawyer’s briefs.

    For a printer’s leak that would be a very quick turnaround time.

    Sammy Finkelman (51afd4)

  30. My point is that there is no indication that anyone leaked anything, so to go around speculating about who did it seems paranoid.

    Milhouse (c63fe5)


Powered by WordPress.

Page loaded in: 0.1985 secs.