07.23.2014

#FullRepeal Daily Digest

The Wall Street Journal: Reining in ObamaCare – and the President Halbig v. Burwell is about determining whether the president, like an autocrat, can levy taxes on his own

Because the ruling forces the Obama administration to implement the Affordable Care Act as written, consumers in 36 states would face the full cost of its overpriced health insurance. According to one brief filed in the case, overall premiums in those states would be double what they are under the administration's rewrite, and typical enrollees would see their out-of-pocket payments jump sevenfold. The resulting backlash against how ObamaCare actually works could finally convince even Democrats to reopen the statute.
Subsidies for policies purchased on an exchange automatically trigger taxes against both employers and individuals who do not purchase the mandated level of coverage. So when the president issued those subsidies in states where he had no authority to do so, he also imposed, on millions of employers and individuals, taxes that no Congress ever authorized.
The president's supporters claim that Halbig is meritless because Congress clearly intended to authorize subsidies through federal exchanges. If that were Congress's intent, certainly one should be able to find some statutory language to that effect. Or contemporaneous quotes from the law's authors explaining that they intended the Affordable Care Act to authorize subsidies in federal exchanges. The president's supporters have had three years to find such evidence supporting their theory of congressional intent. They have come up empty.

The Federalist: No, Halbig Did Not Gut Obamacare Because Of A "Drafting Error" Reading is fundamental, unless you're a liberal blogger.

The deliberate creation of a separate section to authorize a separate federal entity is not a drafting error. The repeated and deliberate reference to one section but not another is not a drafting error. The refusal to grant equal authority to two programs authorized by two separate sections is not a drafting error. The decision to specifically reference section X but not section Y in a portion of a law that grants spending or tax authority is not a drafting error.
...All of that of course begs the question: if the law’s authors originally intended to constrain subsidies to state plans, what was the rationale for the IRS about-face in 2011? That’s actually an easy one to answer: the administration never imagined that so many states would refuse to establish Obamacare exchanges.
- The subsidies for state exchange plans were meant to be pot sweeteners—incentives for states to set up their own exchanges. If fines for mandate non-compliance were Obamacare’s stick, the subsidies for state exchange health plans were the carrot. To the law’s backers, that plan made sense: the White House didn’t really want to have to manage 51 separate exchanges. They wanted the states to do all the heavy lifting. Unfortunately, several dozen legislatures and governors had different plans.
Obamacare was signed into law in March of 2010. It wasn’t until August of 2011 that the IRS decided to make tax credit subsidies available to plans purchased on federal exchanges. That’s a span of 16 months—an awfully long time to recognize and address a “drafting error.” Furthermore, actual “drafting errors” have to be corrected by new laws, not by executive fiat. Even when they are plainly obvious to everyone who sees them, that 3015 that should’ve been 2015 still has to be amended via a new law: passed by both Houses, and signed by the president. Yet, that’s not what this administration did.
- In its May 2012 announcement of its official new rule which suddenly allowed subsidies to flow to federal exchange plans, the IRS never claimed it was a drafting error. It claimed the opposite: that the text clearly endorsed the IRS interpretation.
- So why did the IRS wait nearly 16 months to spring this new interpretation on the public? That’s also an easy one. As of August 17, 2011, when its rule was first proposed, only ten states had passed laws establishing their own exchanges. Seventeen had outright rejected the Obamacare exchanges. All told, 40 states had by that point failed to do the administration’s bidding and set up state-based Obamacare exchanges.
- Without exchanges in every state, Obamacare would surely fail as a policy matter. And without massive subsidies to offset the costs of Obamacare’s health plans, Obamacare would fail as a political matter. The IRS maneuver was a last-ditch attempt to paper over the law’s serious structural flaws.

NBC News: GAO Sting Finds It Easy to Fake it, Get Obamacare Premiums

Eleven out of 12 fake applications for government-subsidized health insurance got through a verification process and the bogus beneficiaries are still covered, the Government Accountability Office said Tuesday.
The GAO launched the sting to check to see how well the Obamacare process checks for counterfeit applications. The results were messy, GAO’s Seto Bagdoyan says in testimony prepared for a hearingWednesday of the House Ways and Means oversight subcommittee.
“The total amount of these credits for the 11 approved applications is about $2,500 monthly or about $30,000 annually. We also obtained cost-sharing reduction subsidies, according to marketplace representatives, in at least nine of the 11 cases,”

NCPA: Should Doctors and Dentists Regulate Their Competitors? [SCOTUS is set to decide this case next Fall]

At issue is an effort by the North Carolina Board of Dental Examiners to prohibit dental hygienists from performing teeth whitening services in mall kiosks, day spas and non-dental offices. Dentists who offer teeth whitening in their offices often supervise dental technicians and hygienists, who perform the actual service. Allowing those same dental technicians and hygienists to perform the work without the supervision of a dentist undercuts dentists’ prices and reduces their profits.
- The removal of stains from teeth can be a lucrative business for dentists. Starting in 2003, the dental board sent out numerous cease-and-desist orders to competitors who were accused of illegally practicing dentistry. The Federal Trade Commission (FTC) sought to encourage price competition for peroxide treatments by forbidding the state dental board in 2011 from taking action against lower-cost providers that offer teeth-whitening services. A federal appeals court upheld the FTC decision in 2013.
As you would expect, the medical community disagrees with the FTC. Professional associations for doctors and dentists argue that public health considerations (for example, letting doctors and dentists regulate who is allowed to compete against them) should take priority over antitrust law and the mere desire to promote competition.
Medical licensure and the state medical boards that govern the practice of medicine within each state has often been described as a self-regulating cartel. Nobel laureate Milton Friedman and many other economists have argued state licensure restricts the supply of physicians and stifles competition. Medical licensure is purportedly maintained for the protection of the public. But, what should be done when, while in the process of protecting the public from providers of dubious quality, the industry also protects itself from competition?