Skip to content

#FullRepeal Daily Digest

Washington Post: D.C. Circuit strikes down tax credits in federal exchanges

  • This morning the U.S. Court of Appeals for the D.C. Circuit released its much awaited opinion in Halbig v. Burwell.  In a 2-1 opinion, the Court held that the Internal Revenue Service regulation authorizing tax credits in federal exchanges was invalid.  
  • Judge Griffith, writing for the court, concluded, “the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges ‘established by the State.”  In other words, the court reaffirmed the principle that the law is what Congress enacts — the text of the statute itself — and not the unexpressed intentions or hopes of legislators or a bill’s proponents.  
  • What comes next? The Administration will have to decide whether to seek en banc review of this decision or file a petition for certiorari. If I had to guess, I would say the former is more likely.  Supreme Court review will likely wait until there are more decisions on this question.  A decision remains pending in King v. Sebelius before the U.S. Court of Appeals for the Fourth Circuit and there are two pending cases in district courts.
  • If this decision is upheld, it will present some three-dozen states with a choice: Establish exchanges so as to authorize tax credits for state citizens while also triggering penalties on employers and individuals who do not wish to purchase qualifying health insurance.  As my co-author Michael Cannon notes, the implications of this decision go beyond its effect on tax credits.
  • [RELATED] Forbes: Halbig v. Burwell Would Free More Than 57 Million Americans From The ACA's Individual and Employer Mandates
    • …a victory for the Halbig plaintiffs would not increase anyone’s premiums. What it would do is prevent the IRS from shifting the burden of those premiums from enrollees to taxpayers. Premiums for federal-Exchange enrollees would not rise, but those enrollees would face the full cost of their “ObamaCare” plans.
    • …Avalere Health, the Urban Institute, and media outlets that have repeated their estimates typically neglect to mention that a victory for the plaintiffs would mean the second-highest court in the land ruled the Obama administration had no authority to issue those subsidies or impose the resulting taxes in the first place – that those taxes and subsidies are, and always were, illegal.Regardless of one’s position on the PPACA, we should all be able to agree that the president should not be allowed to tax and spend without congressional authorization. That’s what’s at stake in Halbig.
    • [a favorable] ruling would free nearly 1 million Floridians and more than 1.5 million Texans from the individual-mandate tax. In 2016, it would free families of four earning as little as $24,000 per year from an illegal tax of $2,085.
    • In Texas, it would free more than 24,000 firms and nearly 7 million employees from the employer mandate.
  • [RELATED] The US Court of Appeals DC Circuit Opinion

Modern Healthcare: Narrow insurance networks under ACA depressing physician pay

  • The physician pay landscape has flattened out, and healthcare reform may be a primary cause. Of the 23 specialties tracked in Modern Healthcare's 21st Annual Physician Compensation Survey, average compensation went up for 12 and down for 11. But with a few exceptions, most could be seen as statistically insignificant. For example, hospitalists and orthopedic surgeons saw increases in average compensation, but those increases were 0.09% and 0.02%, respectively.

The Daily Signal: Company That 'Saved' HealthCare.gov Faces Questions of Cronyism

  • Quality Software Systems Inc., or QSSI, is the tech firm the Department of Health and Human Services picked in October 2013 to straighten out HealthCare.gov…[QSSI] was awarded an $84.5 million contract with HHS’s Centers for Medicare and Medicaid Services in January 2012 to build the part of HealthCare.gov known as the federal data hub.
  • In September 2012, two months before President Obama’s re-election, UnitedHealth Group acquired QSSI through a subsidiary, OptumInsight, in a deal consummated with little fanfare. UnitedHealth Group is also the parent of UnitedHealthcare, which offers plans on the exchanges set up by the Affordable Care Act.
  • Von Spakovsky, a senior fellow at Heritage’s Meese Center for Legal and Judicial Studies, points to the unfair advantage UnitedHealthcare appears to have over competitors in access to data because of the OptumInsight/QSSI contract with HHS:
    • The potential conflict there is that they have a subsidiary that may get access to the information that competitors normally wouldn’t allow out into the marketplace. That’s the inherent conflict in what they’re doing.
  • On June 20, [Senators] Hatch and Grassley sought answers to several questions about UnitedHealthcare and OptumInsight/QSSI from Hemsley and Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services. The senators wrote:
    • Given the role of its fellow subsidiary [of UnitedHealth Group], we have serious questions about any conflicts of interest between the two entities.
    • The senators asked Hemsley and Tavenner for: documents related to OptumInsight/QSSI’s contract with HHS, documents from CMS regarding any evaluation of potential conflicts of interest between the two companies, documents regarding any disclosure requirements for conflicts of interest, descriptions of any firewalls or infrastructure put in place to protect the integrity of the data available to OptumInsight/QSSI, and a description of the data OptumInsight/QSSI is expected to access in carrying out the scope of its contract.
  • So far, neither the insurance company nor the Obamacare agency has answered their questions, Hatch’s staff on the Senate Finance Committee said.

Fox News: Judge tosses senator's ObamaCare lawsuit

  • A federal judge on Monday dismissed a U.S. senator's lawsuit challenging a requirement that congressional members and their staffs obtain government-subsidized health insurance through small business exchanges, saying the senator had no grounds to sue.
  • Sen. Ron Johnson, a Wisconsin Republican, filed the lawsuit in January after the Office of Personnel Management decided months earlier that lawmakers and their staffs should continue to receive health care benefits covering about 75 percent of their premium costs after leaving the health insurance program for federal workers.

Capital New York: First company withdraws from state health exchange

  • American Progressive Life & Health Insurance Company of New York, also known as Today’s Options of New York, failed to file a 2015 rate proposal, which would make the company the first to withdraw from the state's exchange.…Today's Options of New York operated in 37 counties across New York State, but only 384 people signed up for its plans, according to a report from the state health department. That represented roughly one-tenth of one percent of the individual exchange market.

 

Previous
Next