Tuesday, March 25, 2014

ObamaCare Subsidies- a Quick Response to Cannon

Abbe Gluck

Quick update to my ObamaCare Subsidies Case post of yesterday:  Michael Cannon has written a response, in which he claims that the statutory history that my post unpacked helps the challengers. The crux of his argument is the same as the one in the briefing; namely, that because there was a provision in an earlier draft of a bill from the HELP Committee (that did not become the ACA) that would have denied subsidies to the states if they did not establish their own exchanges and also refused to let the government do it, that proves denying the subsidies is logical within the structure of the current statute.  First off, as I have argued, early drafts of bills that changed considerably before becoming law should have little weight, so I don't think any real weight should be put on the HELP bill.  That said, I read the history the other way.  As I detailed yesterday, the HELP bill posited three options for the states and the exchanges:  1) the states could establish the exchanges themselves and get the subsidies; 2) the states could invite the federal government to establish them for the states and get the subsidies; or 3) the states could refuse to have exchanges altogether, in which case there would be no exchanges and no subsidies for four years—at which time the federal government would come in and, once it did, the subsidies would be available. Nothing in the HELP bill contemplates a federally operated exchange with no subsidies. That’s the key point; with respect to every option in the HELP bill, once the feds come in, the subsidies are available.  Read it the whole thing (all of section 3104) for yourself.   (The only limitation on the subsidies, for federal and state exchanges alike, was if the state refused to apply the employer mandate to its own state government employees; that limitation never got into the final ACA and is irrelevant here.)
                Further, the final version of the ACA did not adopt option 3 above. The final version of the ACA does not give states the option of refusing to have exchanges altogether.  But either way---including with respect to option 3—Congress never contemplated a federal exchange with no subsidies.  And that's what makes sense--for all the reasons about how the ACA functions and its other provisions, which I and others already have amply detailed.

(Cannon also nits that I did not provide a link to his amicus brief (which I did not do because my post referred to his arguments on the blogs). Glad to provide it here.)

More after the oral argument...

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