The WasteWatcher: The Staff Blog of Citizens Against Government Waste

The Supreme Court Hears King v. Burwell

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Today, March 4, 2015, the Supreme Court heard oral arguments to King v. Burwell.  It’s a big deal because it could decide whether the Affordable Care Act (ACA), better known as ObamaCare, survives in its current format.  More to the point, the decision will have implications regarding the balance of power between the three co-equal branches of government: Executive, Legislative, and the Judicial.

In ObamaCare, taxpayer-funded subsidies are provided to assist people and families with house-hold incomes up to 400 percent of the federal poverty level to purchase health insurance.  As you may know, some states decided to create state-run health insurance Exchanges under ACA but a majority of states chose not to do so.

The plaintiffs of King v. Burwell live in a state (Virginia) that did not establish an Exchange and therefore their citizens purchase their insurance via Healthcare.gov that is run by the the Centers for Medicare and Medicaid.  The plaintiffs argue that the law only allows subsidies for people that purchase their health insurance in a state-run Exchange, not the federally-facilitated Exchange. Because the subsidies trigger the mandates and tax penalties for not purchasing insurance, and the IRS is providing illegal subsidies in their state, the plaintiffs argue they are being harmed by ObamaCare.  The Obama Administration is countering that the IRS can allow the subsidies in both state-run and federally-facilitated Exchanges.

Here is what the LAW states in Section 1401 of the Act regarding subsidies:
 
According to the law, the subsidies go to an Exchange established by the State.  There is no mention of subsidies going to a federal-facilitated Exchange anywhere in the law.

In fact, MIT professor Jonathan Gruber, who was hired by the White House as an advisor during the healthcare debate and often called the "architect of ObamaCare," has discussed not once, not twice but at least three times that the purpose of providing the subsidies only to people in the state Exchanges was to courage governors to create them. (HT to Phil Kerpen of American Commitment and Rich Weinstein.)  Professor Gruber warned if the states did not create an Exchange, their citizens would lose out financially because although their taxes paid for the subsidies, they would not be entitled to them.

If the Supreme Court should decide in flavor of the plaintiffs by agreeing that the statute means what it says and that the subsidies only go to people in a state Exchange, ObamaCare as structured will be no more.  Millions of Americans will lose subsidies that were illegally provided to them by the Obama Administration.

Of course such a decision could put enormous strain on the governors of the 36 states that utilize the federally-facilitated Exchange to immediately create a state Exchange.  That would certainly be their prerogative but why would they, considering the trouble and expense so many states had, and continue to have, in creating and running their Exchange?

Such a decision creates opportunities as well.  Congress could pass legislation that would return healthcare policy back to the states and away from Washington politicians and bureaucrats.  It could pass legislation to replace ObamaCare with something that is workable and more consumer focused.  The legislation could remove the corrosive ObamaCare mandates that are driving up costs but still protect people with preexisting conditions and those that need financial help in purchasing insurance premiums.

While the Republicans in Congress are fully aware that passing such legislation may have to wait until there is a president that will be amendable to their free-market ideas, they are providing lots of alternatives to ObamaCare in the long-term and perhaps a short-term “patch” for families and individuals that will lose their subsidies if the Supreme Court agrees that the law only allows subsidies in the state-run Exchanges.  The patch would essentially transition them until a better plan can be signed into law, probably after the 2016 election.

Senators Orrin Hatch (R-Utah), Lamar Alexander (R-Tenn), and John Barrasso (R-Wyo.) have a plan, as does Senator Ben Sasse (R-Neb), as does Senator Ted Cruz, and Rep. Marsha Blackburn.  Free-market healthcare economists such as Yuval Levin, James Capretta, and Avik Roy have also provided ideas.  But whatever Congress decides to do, they need to come up with short-term and long-term plans soon and rally behind them.

The decision in King v. Burwell has much broader implications than whether ObamaCare survives or not.  President Obama’s continued executive overreach and rewriting of law goes unabated and must be addressed.

With respect to changing ObamaCare law, the Galen Institute has tracked 49 alterations with at least thirty of them being done by administrative action.

The executive overreach does not end with ObamaCare.  For example, the Obama Administration has re-written immigration law and this action is now being considered in the courts, as well as Environmental Protection Agency rules concerning CO2 emissions.  The President has even suggested raising taxes, without Congressional approval.

Constitutional scholar Jonathan Turley, and someone who supported President Obama, said the following in testimony before the House Judiciary Committee on February 26, 2014:

We are in the midst of a constitutional crisis with sweeping implications for our system of government.  There has been a massive gravitational shift of authority to the Executive Branch that threatens the stability and functionality of our tripartite system. To be sure, this shift did not begin with President Obama.  However, it has accelerated at an alarming rate under this Administration.  These changes are occurring in a political environment with seemingly little oxygen for dialogue, let alone compromise.  Indeed, the current anaerobic conditions are breaking down the muscle of the constitutional system that protects us all.  Of even greater concern is the fact that the other two branches appear passive, if not inert, as the Executive Branch has assumed such power.

The Supreme Court can fix this troubling trend within the Executive Branch if they rule with the plaintiffs.  A strong message would be sent that the Executive Branch that it cannot change law at will and it is not the Supreme Court's job to placate the Executive Branch's desires.  A decision in favor of the plaintiffs reaffirms that only Congress, as intended in the Constitution, can write or change law.

 

For an interesting discussion on this case, listen to the Mark Levin Show and his guest, Michael Carvin, the attorney for the plaintiffs in King v. Burwell.  Carvin is on the show at 18:00 but I would encourage you to listen to the show from the beginning because Levin discusses his Amicus Brief (Landmark Legal Foundation) in King v. Burwell.

The transcript (subject to a final review) of today’s proceedings can be found here.

The audio will be available on Friday.

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