On Tuesday, one federal appellate court read the Affordable Care Act to, rather nonsensically, prohibit the federal government from providing subsidies to consumers in states that chose not to set up their own health insurance exchanges and to use the federal one instead. Another federal appellate court drew precisely the opposite conclusion on the same day. The result will be years more litigation and perhaps another trip to the Supreme Court. But the real issue here is not whether the meaning of one phrase in this gigantic piece of legislation is precise, as the majority of the three-judge panel in the first court held, or ambiguous as the second court unanimously ruled. It is that Republicans in Congress have proved so intent on destroying Obamacare at all costs that they are refusing to make the routine adjustments that are necessary in any major law.
The ruling from the D.C. Court of Appeals held that — notwithstanding the evident intent of Congress and the president to expand health insurance coverage as universally as possible — a phrase in the law indicating that the federal government would make subsidies available to low- and moderate-income consumers who bought insurance through "an exchange established by the state" prohibited the government from doing so in states that rely on healthcare.gov, the federal site. More than 5 million people from those states have bought coverage, and most of them have received subsidies.
The Obama administration had interpreted that phrase to include leeway in that the secretary of Health and Human Services was effectively establishing exchanges on the states' behalf. There is some logic to this in that the federal exchange is really just umbrella architecture for state-based insurance marketplaces. But two Republican-appointed judges in Washington disagreed, holding that the evident intent of Congress was to induce states to create their own exchanges by threatening a lack of subsidies as punishment if they didn't. (That this intent was unspoken and countered by every subsequent interpretation of the law was, apparently, immaterial.)
The reason the plaintiffs brought this suit, and the one decided in the opposite direction by the Fourth Circuit Court of Appeals in Richmond, was not really because they object to the government's interpretation of that phrase. It was on the theory that tugging this one thread could cause the whole tapestry of the ACA to unravel. Without subsidies in the 36 states that use healthcare.gov, health insurance policies would not be affordable for large numbers of consumers; thus, they would be exempted from the requirement to buy policies. With so many people exempted, the economics of the exchanges would collapse and so would the entire law.
In the end, we expect the reasoning of the Richmond court to prevail if and when the issue is decided by a full panel of the D.C. Court of Appeals and/or the Supreme Court. Judges are supposed to interpret elements of a statute in the way that is most congruent with the whole, and Tuesday's adverse ruling did precisely the opposite. But really, none of this litigation should be necessary. In a rational world, Congress would chalk this up as the kind of imprecise drafting that is a virtual given in such far-reaching legislation and fix it with a simple amendment. But that is a political impossibility because Republicans would never allow anything that would improve the law.
The irony is this: Most of the 36 states are led by Republicans, and the people who would be losing coverage would, disproportionately, be the constituents of those who would block a legislative fix for the issue. It's of a piece with the irony that House Speaker John Boehner wants to sue President Obama for not enforcing a requirement that many employers provide health insurance, a provision that Mr. Boehner does not actually want to see enforced.
Millions of people are left in the lurch by Tuesday's decision from the D.C. Court of Appeals. Hospitals face uncertainty in setting their budgets and insurers in determining their prices. Congress could make the problem go away in an afternoon if it so chose, but it won't because Republicans would rather put politics over their own constituents' interest.
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