Combative Bench Grills IRS in Halbig v. Sebelius (ObamaCare)

National Review ^ | March 25, 2014 | Jonathan Keim

[PJ-Comix]

There were fireworks at the D.C. Circuit today as the IRS and HHS squared off against appellants challenging the IRS’s power grab in Halbig v. Sebelius. I attended arguments today and provide the following synopsis. (Carrie Severino has discussed the district court’s opinion here, here, here, and here. Carrie also filed an amicus brief in the case.) 

The central question is: Does the phrase “established by the State” actually mean what it says, or is that just a fancy way of saying “established by either the State or by the federal government?” At issue is a tax subsidy that the IRS currently grants to anyone who buys health insurance on an exchange under Obamacare. The plain language of the statute says that the subsidy only applies to insurance plans in states that have established an exchange, apparently as an incentive for states to start their own exchanges. But the IRS has decided that the tax subsidy should apply to every state, no matter who established the exchange. The problem, as these challengers point out, is that the IRS’s interpretation turns the actual language on its head.

[PJ-Comix]

This case has much BIGGER implications for ObamaCare than the Hobby Lobby case. And TWO of the three judges seem to be in favor of the plaintiff.

[lepton]

And the third judge seems clearly to MAKE the current HHS position retroactive law.

[unixfox]

Not to worry, Zer0 will just sign another E.O. and fix the “law”

[Slyfox]

The Sebaceous Cyst sure does have a lot of lawsuits against her, doesn’t she?

[Pollster1]

There is no question on the constitutionality of ObamaCare or on whether the implementation is lawful. The only question is the legitimacy of the courts. I hope they don’t give up the last shred they have of legitimacy for a terrible and destructive law.

[Vaduz]

Sounds like the Clinton plat is in motion what is is?.

[Tupelo]

Not much of a mystery here. IRS & HHS are part of the Federal Government. The Courts are part of the Federal Government. Plaintiffs are not and will spend a fortune, maybe even into bankruptcy in their futile attempts to get justice. Government has unlimited resources, including the salaries of the Judicial Branch. Government Court will rule in favor of -—SURPRISE—— The Government.
Winners? The government and their approved lawyers.

[SunkenCiv]

Thanks PJ-Comix.

[Ray76]

The controversy is over the plain text of the PPACA:

SEC. 1401(a) In General.--Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 36A the following new section:

SEC. 36B (a) In General.--In the case of an applicable taxpayer, there shall be allowed 
             as a credit against the tax imposed by this subtitle for any taxable year 
             an amount equal to the premium assistance credit amount of the taxpayer for
             the taxable year.

         (b) Premium Assistance Credit Amount.--For purposes of this section--
        
             (1) In general.-- <> The term `premium assistance 
                 credit amount' means, with respect to any taxable year, the sum 
                 of the premium assistance amounts determined under paragraph (2)
                 with respect to all coverage months of the taxpayer occurring 
                 during the taxable year.
 
             (2) Premium assistance amount.--The premium assistance amount determined
                 under this subsection with respect to any coverage month is the amount
                 equal to the lesser of--

                    ``(A) the monthly premiums for such month for 1 or more 
                          qualified health plans offered in the individual   
                          market within a State which cover the taxpayer, the 
                          taxpayer's spouse, or any dependent (as defined in 
                          section 152) of the taxpayer and which were enrolled in 
                          through an Exchange established by the State under 1311 
                          of the Patient Protection and Affordable Care Act, or

                    ``(B) the excess (if any) of--
                           ``(i) the adjusted monthly premium for such 
                                 month for the applicable second lowest cost silver 
                                 plan with respect to the taxpayer, over
                          ``(ii) an amount equal to 1/12 of the product 
                                 of the applicable percentage and the taxpayer's 
                                 household income for the taxable year.

36B(b)(2) specifies the premium assistance amount is equal to the lesser of A or B [that is: the lesser of SEC. 36B(b)(2)(A) or SEC. 36B(b)(2)(B)].

How to you suppose that the premium assistance credit amount of the taxpayer is the lesser of their premium under (A) [explicitly specified as a state exchange under 1311], or (B) [which is claimed includes federal plans]? Is the taxpayer in both a state and federal exchange and whichever is the lesser premium applies?

If the claim that 36B(b)(2)(B) includes federal exchanges is correct, then 36B(b)(2)(A) must also include federal exchanges, something it explicitly does not do. Therefore 36B(b)(2)(B) must necessarily also refer to Exchanges established by the State under 1311, otherwise 36B(b)(2) would be meaningless because a taxpayer can not be enrolled in both a state and federal exchange and whichever is the lesser premium applies.

The PPACA explicitly allows tax credits for state-run exchanges and excludes such credits for federally run exchanges.