A lawsuit that will cause the structure of Obamacare to “crumble,” according to a state attorney general who is one of the lawsuit’s leading proponents, rests on a falsehood about how one former senator helped shape the act. Nevertheless, a minority of the judges to consider the issues presented by this case, all of whom are Republicans, have already embraced the lawsuit’s legal theory and called for millions of Americans to be stripped of their health insurance. The latest volley in this effort to gut Obamacare was fired on Friday, when three lawyers leading the effort to strip so many Americans of their health care filed their latest brief in the United States Court of Appeals for the District of Columbia Circuit in a case known as Halbig v. Burwell.
The Affordable Care Act gives each state a choice. It may either set up its own health exchange, where its residents may buy health insurance and receive subsidies to help them pay for the insurance if their income is below a certain level, or the state may choose not to set up the exchange and the federal government will do so for them. The theory behind the latest round of lawsuits attacking Obamacare — a theory that three Republican judges have already signed onto — is that the lawmakers who enacted Obamacare viewed the purely administrative question of whether state or federal bureaucrats would run these health exchanges as a matter of such superseding importance that they were willing to deny health coverage to millions of people to ensure that the right set of bureaucrats run the exchanges in each state.
According to the plaintiffs’ latest brief in Halbig, “Congress used a variety of ‘carrots’ and ‘sticks’ to induce states to establish Exchanges voluntarily.” One of these “sticks,” under their legal theory, is that Congress sought to punish states that didn’t set up their own exchanges by denying subsidies to the people who live in those states. This legal theory contradicts much of the text of the law, for reasons ThinkProgress explains here and here, but it also ascribes a truly baffling set of motives to the lawmakers who enacted the Affordable Care Act. Why on earth would anyone care about a purely administrative matter so much that they would view it as more important than the question of whether millions of Americans would be able to afford health insurance?
The plaintiffs’ brief in Halbig does not provide an answer to this question — that is, it does not suggest a motive that could have inspired this odd choice. It does, however, offer a reason why Congress may have viewed the question of which bureaucrats will run each state’s exchange as a matter of such importance. The big problem with the reason that the brief offers, however, is that it completely misrepresents the history of how the law was enacted. Here’s its explanation for how Congress could have enacted a law that denies subsidies based on a factor as arbitrary as geography:
Senator Ben Nelson of Nebraska, whose vote was critical to passage, called the national Exchange model a “dealbreaker,” expressing concern that such federal involvement would “start us down the road of … a single-payer plan.” For Nelson and other swing-vote Senators, it was important to keep the federal government out of the process. It was thus insufficient to merely allow states the option to establish Exchanges, as the House bill did. Rather, states had to take the lead role, which, given the constitutional bar on compulsion, required serious incentives to induce such state participation.
Senator Nelson, they claim, demanded that the federal role in setting up health exchanges be reduced. And thus he insisted that each state be given a strong incentive to set up their own exchange. Any state that refused to do so, according to the plaintiffs’ brief, would deny their citizens billions of dollars in subsidies.
But that’s not what happened.
The only evidence the brief provides to support its description of Nelson’s role in the legislative drafting process is a short piece that ran on January 25, 2010 in Politico. Notably, this piece ran more than a month after the Senate passed the Affordable Care Act, so it is not clear how an objection Nelson raised in January of 2010 could have shaped a bill that was passed in December of 2009.
Moreover, even if the Ben Nelson of January 2010 somehow managed to travel back in time to reshape the law, the Politico article the Halbig plaintiffs rely upon still does not support their claim about Senator Nelson. Politico reported that Nelson objected to “a national insurance exchange,” not that he objected to what the Affordable Care Act eventually set up — a series of 50 different exchanges for each of the 50 states, some of which are run by the states themselves and some of which are run by the federal government.
During the debate over the bill that eventually became Obamacare, the House and the Senate passed two competing bills. The Senate bill, which establishes multiple state-based exchanges, is the bill that eventually became law. Meanwhile, a competing House bill would have set up a single national exchange that would have provided health insurance to Americans throughout the states. As the New York Times reported on January 13, 2010 — shortly before Nelson expressed the concern reported by Politico — “The House bill . . . would essentially put the federal government in charge of the new insurance system. It would create a new agency, the Health Choices Administration, to vet the health plans available and review any premium increases.”
This is what Nelson objected to. He supported, and cast a vote in favor of, a system that required a separate exchange for each of the 50 states. He opposed the House bill, which would have created a single grand exchange that sold insurance to people in many states. This is why Politico reported that he objected to “a national insurance exchange.” The debate over whether to have multiple state exchanges or a grand national exchange led to one of the primary disagreements between the House and the Senate bills. Neither bill, however, made a person’s ability to obtain health subsidies dependent on geography.
So the Halbig plaintiffs are left with no possible explanation for why Congress would have designed Obamacare in the way that they suggest. Their description of Senator Nelson’s actions is false, and it relies on a news source that does not support their claim.