BREAKING: Two Republican Judges Order Obamacare Defunded

Posted on  

"BREAKING: Two Republican Judges Order Obamacare Defunded"

Ted Cruz

CREDIT: AP Photo/Alex Brandon

Near the end of 2013, Sen. Ted Cruz (R-TX) led a final crusade to defund the Affordable Care Act, eventually announcing on the Senate floor that “I intend to speak in opposition to Obamacare, I intend to speak in support of defunding Obamacare, until I am no longer able to stand.” Cruz did succeed in goading his fellow Republicans into shutting down the federal government, but his effort was ultimately doomed. The American people’s elected representatives voted not to defund Obamacare, and the shutdown ended.

On Tuesday, two Republican judges voted to rewrite this history. Under Halbig v. Burwell, a decision handed down by Judge Raymond Randolph, a Bush I appointee, and Judge Thomas Griffith, a Bush II appointee, millions of Americans will lose the federal health insurance subsidies provided to them under the Affordable Care Act — or, at least, they will lose these subsidies if Randolph and Griffith’s decision is ultimately upheld on appeal.

Ted Cruz is undoubtedly smiling today. Two unelected Republicans just voted to erase his most embarrassing and most public defeat, and they voted to take away millions of Americans health care in the process.

Meet The Republicans

It’s important to understand just who these two Republicans are. Judge Randolph is a staunchly conservative judge who spent much of the oral argument in this case acting as an advocate for the anti-Obamacare side. Randolph complained, just a few weeks before President Obama would announce that the Affordable Care Act had overshot its enrollment goal, that the launch of the Affordable Care Act was “an unmitigated disaster” and that its costs “have gone sky-high.” At one point, Randolph also cut off Judge Harry Edwards, the sole Democratic appointee on the panel, to cite an editorial published by the conservative Investor’s Business Daily to prove the argument that Obamacare should be defunded.

The Investor’s Business Daily is not known as a particularly reliable source on health policy. In 2009, for example, it published an editorial arguing that Stephen Hawking, the British physicist who is an Englishman from the United Kingdom, “wouldn’t have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless.”

Judge Griffith has a reputation as a more moderate judge, but it is not clear that this reputation is deserved. In 2012, Griffith’s colleague, Judge Janice Rogers Brown, published a concurring opinion suggesting that all labor, business or Wall Street regulation is constitutionally suspect. “America’s cowboy capitalism,” Brown claimed, “was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s.” Later in her opinion, Brown suggested that the Court went off the rails when it “decided economic liberty was not a fundamental constitutional right.” In the early Twentieth Century, conservative justices relied on ideas of “economic liberty” that were discarded in the 1930s in order to strike down laws protecting workers’ right to organize, laws ensuring a minimum wage and laws prohibiting employers from overworking their employees.

Griffith did not join Brown’s opinion, but his explanation for why he did not do so is instructive — “[a]lthough by no means unsympathetic to [Brown’s] criticism nor critical of [her] choice to express [her] perspective, I am reluctant to set forth my own views on the wisdom of such a broad area of the Supreme Court’s settled jurisprudence that was not challenged by the petitioner.” So Griffith is “sympathetic” to Brown’s argument that much of the Twentieth Century is unconstitutional, but he did not want to join her opinion because the arguments she made were not raised by the parties in that case. Halbig, by contrast, presented Griffith with a much more direct attack on supposedly “burdensome regulation” brought by the forces of “cowboy capitalism.”

Punishing Millions For A Proofreading Error

The two Republicans’ decision rests on a glorified typo in the Affordable Care Act itself. Obamacare gives states a choice. They can either run their own health insurance exchange where their residents may buy health insurance, and receive subsidies to help them pay for that insurance if they qualify, or they can allow the federal government to run that exchange for them. Yet the plaintiffs’ in this case uncovered a drafting error in the statute where it appears to limit the subsidies to individuals who obtain insurance through “an Exchange established by the State.” Randolph and Griffith’s opinion concludes that this drafting error is the only thing that matters. In their words, “a federal Exchange is not an ‘Exchange established by the State,'” and that’s it. The upshot of this opinion is that 6.5 million Americans will lose their ability to afford health insurance, according to one estimate.

The Supreme Court of the United States, however, has long recognized that a law’s clear purpose should not be defeated due to an error in proofreading. As the Court explained in 2007, “a reviewing court should not confine itself to examining a particular statutory provision in isolation” as the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” It is indeed true that a single phrase of the Affordable Care Act, if read in isolation, suggests that Congress intended only state-run exchanges — as opposed to federal exchanges — to offer subsidies, but this provision is contradicted by numerous other provisions of the law.

One provision of the Affordable Care Act, for example, indicates that any “exchange” shall be an “entity that is established by a State” — language which indicates that federally run exchanges will be deemed to be “established by a state.” This may seem counter-intuitive, but Congress has the power to define the words that it uses in any way that it wants, even if those words are defined in ways that are unusual. Another provision of the law provides that, when a state elects not to run an exchange, the Secretary of Health and Human Services “shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” Thus, the law not only authorizes the Secretary to stand in the state’s shoes when it runs an exchange, it also empowers her to implement the law’s “other requirements.”

Nor is this is the full extent of the problems with Randolph and Griffith’s conclusion. Indeed, in order to accept their decision, a person reading the Affordable Care Act must ignore the following facts:

  • The subtitle of the Affordable Care Act which contains the provisions at issue in this case is titled “Affordable Coverage Choices for All Americans.” If Randolph and Griffith are correct, Congress would have named that subtitle “Affordable Coverage Choices for All Americans Except For Those Americans Who Live In States With Federally-Run Exchanges.”
  • The Affordable Care Act says that it will “achieve[] near-universal coverage.” If Randolph and Griffith are correct, Congress would have said that Obamacare “achieves near-universal coverage except in states with federally-run exchanges.”
  • An amendment to the Affordable Care Act requires the federally-run exchanges to report various information that they would only be able to report if they were providing subsidies, such as whether taxpayers received an “advance payment of such credit”; information needed to determine individuals’ “eligibility for, and the amount of, such credit”; and “[i]nformation necessary to determine whether a taxpayer has received excess advance payments.” Congress would not have imposed this reporting requirements if they thought that the federal exchanges would not offer subsidies.
  • The Affordable Care Act also provides that the only people who are qualified to purchase insurance at all on a federally-run exchange are people who “reside[] in the State that established the Exchange.” Thus, if federally-run exchanges are not deemed to be “established by the State,” that means that no one at all is allowed to purchase health insurance on the federally-run exchanges, and there would be no purpose whatsoever to their existence. As the trial court explained in this very case, this interpretation makes no sense, because “courts presume that Congress has used its scarce legislative time to enact statutes that have some legal consequence.”

Shifting Positions

Virtually no one, apparently including at least one of the plaintiffs who brought this lawsuit, actually believes that these propositions are true. Indeed, as the government points out in its brief, one of the plaintiffs who brought this lawsuit also was a plaintiff in the last lawsuit seeking to gut Obamacare, the challenge to the individual mandate that was rejected by the Supreme Court. In that lawsuit, this plaintiff argued that the subsidies were an integral part of every exchange’s’ very design — “[w]ithout the subsidies driving demand within the exchanges, insurance companies would have absolutely no reason to offer their products through exchanges, where they are subject to far greater restrictions.” Now, however, he expects the courts to believe that these subsidies were entirely optional, and that Congress intended federally-run exchanges to get along without them. Notably, the exact same lawyer represented this plaintiff when he made both of these mutually exclusive claims.

The unsuccessful legal argument claiming that the individual mandate was unconstitutional was a major prong of the Republican attack on the law as early as 2009. Yet, even after the GOP decided that defeating Obamacare in court was their number one policy priority, after Republican officials in numerous states brought a high-profile lawsuit seeking to kill this law, and after they hired one of the best lawyers in the country to drive this litigation, no one noticed the alleged flaw in the statute that Randolph and Griffith rely upon today. The reason why is obvious. Not even the many Republican officials who filed briefs seeking to kill this law the first time around actually believed that the law was intended to deny subsidies to people who buy insurance in federal exchanges.

To get around this fact, Randolph and Griffith spin an alternative history of the Affordable Care Act’s passage. A major prong of this alternative history claims that Congress wanted to deny subsidies to people in states with federally-run exchanges because that that would provide states with an incentive to start their own exchange — in Randolph and Griffith’s words, Congress “us[ed] subsidies as an incentive to gain states’ cooperation.” Thus, in this narrative, Congress viewed getting states to run exchanges as an all-encompassing goal, trumping even the law’s stated goals of providing “Affordable Coverage Choices for All Americans” and achieving “near-universal coverage.” Needless to say, there is absolutely no evidence whatsoever that Congress actually viewed the administrative question of which set of government bureaucrats would run a particular state’s exchange as a question of such superseding importance that they were willing to deny health coverage to millions of people in order to ensure that the right set of bureaucrats run the exchanges in each state.

An Opinion That Kills

Should Randolph and Griffith’s decision be upheld on appeal, which, for reasons explained below, is unlikely, it would send destructive shockwaves through much of the American health care system. As ThinkProgress previously explained, suddenly removing federal subsidies from insurance markets that expect them to continue being paid would force health insurers to jack up their premiums in order to cover their costs. Higher premiums, however, would cause many healthy individuals to drop their coverage. Which will force insurers to raise their premiums even more, which will cause even more individuals to lose their coverage. Indeed, according to a brief filed by several economists, the resulting death spiral would render insurance “unaffordable for more than 99 percent of the families and individuals eligible for subsidies” within the federal exchanges.

This economic problem exposes yet another flaw in Randolph and Griffith’s opinion. In order to accept their reasoning, one has to believe that Congress buried a hidden time bomb within the arcane provisions of the Affordable Care Act that, when it detonated, would render much of the act a nullity. As the economists explain in their brief, Randolph and Griffith’s decision presumes that “Congress sought to legislate into existence a massive new social program that it understood would immediately fail.”

So Randolph and Griffith’s opinion would be comic if its result were not so tragic. And make no mistake, if this opinion is upheld on appeal, it will be a tragedy. According to one Harvard study, nearly 45,000 Americans between the ages of 18 and 64 died in a single year because they lacked health insurance. Randolph and Griffith’s decision would ensure that many of these deaths resume. That’s tens of thousands of wives who will never hold their husbands again, and tens of thousands of fathers who will never kiss their daughters again, all because two unelected Republicans hunted through an ocean of language indicating that Congress intended to end these needless deaths in order to find a single piece of flotsam suggesting that the law should be defunded.

This is not how judges typically behave in a democracy. And it is not a decision that is rooted either in Congress’ intentions or in Supreme Court precedent.

An Opinion That Is Unlikely To Survive

We live in interesting times. And we live in times where judges and justices can no longer be expected to rely on established law, especially when they are presented to an opportunity to undermine Obamacare. Nevertheless, there are several reasons to be optimistic that Randolph and Griffith’s attempt to defund Obamacare will not survive contact with a higher authority.

For starters, under the Supreme Court’s Chevron Doctrine, courts typically defer to a federal agency’s reading of a law so long as “the agency’s answer is based on a permissible construction of the statute.” Randolph and Griffith get around this doctrine by claiming that “the ACA unambiguously restricts the section 36B subsidy to insurance” purchased on state-run exchanges.

If you truly believe that the only possible interpretation of the Affordable Care Act’s language is the one adopted by Randolph and Griffith on Tuesday, then you may want to go back to the top of this article and start reading it all over again. In any event, two federal judges previously concluded that Obamacare is unambiguous in the other direction — that is, it unambiguously offers subsidies to people who purchase insurance through federal exchanges. That alone demonstrates that, even if the law isn’t completely clear, its meaning is at least uncertain enough that the courts should defer to the agency’s reading under Chevron.

More importantly, Randolph and Griffith’s own colleagues are unlikely to allow this opinion to stand for long. The federal government may now appeal this decision to the full United States Court of Appeals for the District of Columbia Circuit, where Democrats enjoy a 7-4 majority among the court’s active judges. It is unlikely, to say the least, that a Democratic bench will strike down President Obama’s primary legislative accomplishment based on the highly doubtful reasoning contained in Randolph and Griffith’s opinion.

Should the full DC Circuit intervene, of course, their decision can ultimately be appealed to the GOP-controlled Supreme Court. But we’ve already seen this story play out once before. The last time conservative lawyers brought a case to the Supreme Court seeking to gut Obamacare, Chief Justice John Roberts voted to uphold the bulk of the law.

Roberts cast this vote a year-and-a-half before much of the law would actually be implemented, meaning that, if he had chosen to struck down the law then, he would have been able to do so at a time when the constituency for upholding the law was relatively small. Now, however, millions of Americans stand to lose their health insurance if Roberts signs on to Randolph and Griffith’s reasoning — and Roberts would be personally responsible for the subsequent loss of health coverage and needless deaths that would result. If Roberts was unwilling to trash the law at a time when the impact would have been relatively small, it is unlikely that he will do so under circumstances that are likely to inspire the masses to storm his castle while wielding pitchforks.

Update
Share

The Fourth Circuit just handed down its decision in a similar case challenging Obamacare subsidies in the federal exchanges. It reached the opposite conclusion and upheld the subsidies. You can read our analysis of the Fourth Circuit’s decision here.

« »

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.