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One of the leading arguments by the defenders of the IRS rule in Halbig, is that none of the states seemed to be aware of such a significant limitation on subsidies for states that do not establish exchanges. During oral arguments in the D.C. Circuit, Judge Edwards asked:

“How did all the states miss this? […] Indeed one of the brief’s points is that no state made the equation that the availability of subsidies was a factor in deciding whether to create an exchange. No one.”

Britanny La Couture of the American Action Forum has a detailed report showing at least two states seemed to be aware of this reading of the statute.

First, Idaho seemed to establish an exchange, out of a concern that Idahoans would not be eligible for subsidies on the federal exchange.

On July 13, 2012, two weeks after NFIB v. Sebelius was decided, and the relevant constitutional questions had been addressed, Governor C.L. ‘Butch’ Otter of Idaho created the Health Insurance Exchange Working Group to research and answer questions faced by state legislators in determining whether to establish an Exchange.[19] The Group was led by the Idaho Director of Insurance, Bill Deal.  On October 30, 2012, the Working Group’s Exchange Subcommittee produced a report on the relative advantages and disadvantages of each type of Exchange.[20] The report states:

There are some opinions that should the State of Idaho adopt a SBE [State-Based Exchange], the businesses of Idaho may lose the chance to sue the federal government over the tax for not offering a health insurance plan to its employees… If we don’t do a SBE, others are saying that any subsidies that would be available to the State would not be available if Idaho chooses not to set up its own SBE.[21]

Chairman Shore also delivered notes to Governor Otter in which the Subcommittee expressed “concern that if Idaho sets up an exchange, an entitlement will be stablished with regard to subsides.”[22] The Subcommittee also informed the Governor that “[w]e do not know what the partnership will look like at this point […] Will subsidies be available with a partnership arrangement?”[23] In their discussion of “The Bad” aspects of not establishing a state-based Exchange, the Subcommittee noted “there has been much talk about the idea that federal subsidies would not be available in a federal exchange.”[24]

In a report to the Governor prepared by the Idaho Freedom Foundation and submitted by Rep. Lynn Luker and Working Group member Wayne Hoffman on October 25, 2012, it is argued that absent a state-based Exchange and the attendant federal subsidies, 107,000 Idahoans would find health insurance unaffordable by the ACA’s definition.[25] The resulting “affordability exemption” from the individual mandate was viewed by Idaho Freedom Foundation as a positive aspect of refusing to establish an Exchange, but comments later made by governor Otter and his administration reveal they may have viewed this feature of the ACA as both a carrot and a stick, urging them towards establishing the Exchange.[26]

On December 11, 2012, Governor Otter changed his official position[27]and announced Idaho’s intention to establish a state-based Exchange.[28]On March 28, 2013 he signed into law HB 248, which established the Idaho Health Insurance Exchange called Your Health Idaho.[29] Despite relying in part on the federal application technology, Idaho spokespeople have made clear that “Your Health Idaho has always been a state-based exchange.”[30]

Second, Indiana was cognizant that the employer mandate would not be triggered if not state exchange was created. The reason why the mandate would not be triggered is because subsidies were not present to drive down the cost of plans.

Indiana, for example, was committed early to establishing a state-based Exchange.[31] On November 15, 2012, Governor-elect Mike Pence wrote a one-page letter to then-Governor Mitch Daniels expressing his opposition to establishing an Exchange in Indiana.[32] He lists uncertainty about costs and benefits alongside “[l]egal uncertainties such as whether the employer tax penalty even applies to businesses in the absence of a state-based exchange” as reasons for declining to establish an Exchange.[33] With these considerations in mind, Governor Pence ultimately allowed Indiana to default to the federal Exchange.[34] In the wake of recent court rulings indicating that Hoosiers may be ineligible for subsidies in the federally-facilitated Exchange, Pence said he “hope[s] it causes Congress to rethink Obamacare. Ordering every American to purchase health insurance whether they want or need it or not was the wrong idea to begin with.”[35]

These factoids are quite helpful, as it helps me piece together the timeline for Unraveled. In general, before the Court upheld the mandate in NFIB, there was so much uncertainty, and its not surprising that most states didn’t bother drilling into the depths of the ACA arcana. Now, maybe we will find out the full story.

The actual plaintiff of Mary Doe v. Bolton–the companion case to Roe v. Wade–was Sandra Cano. LifeNews reports that she has passed away.  Cano, like Norma McCorvey (the plaintiff in Roe) came to later regret her role in the case, and fought against it for the rest of her life.

The 5th Circuit has now reversed the lower court, and allowed a Texas abortion law to go into effect. Assuming the 5th Circuit en banc denies review, there will likely be an emergency appeal to the Supreme Court. Will RBG recuse?

I see that my little ‘ole post generated an MSNBC article by Irin Carmon titled “Conservatives condemn Ruth Bader Ginsburg’s abortion comments.” At least I’m an “influential blogger.” From my post, it spread to National Review, Alliance Defending Freedom, and beyond. I’m glad my blog is a cog in the Vast Right Wing conspiracy 🙂

Update: A flashback to Dahlia Lithwick’s comments on Justice Scalia in 2003:

Is this brilliant jurist losing his mind? Is he so frustrated by 17 years of failure to sway an allegedly conservative court to his side on social issues that he no longer cares who he offends or how biased he may appear? Has he become so swept up by the Coulter/Limbaugh/O’Reilly game of court-bashing that he cannot see how damaging it is when played by a justice? Or is he running for elected office? What possesses Justice Scalia to eschew the reclusive public life of many justices, or at least the blandly apolitical public lives of most, to play the role of benighted public intellectual and knight gallant in the culture wars?

The same applies equally to RBG.

I have now had a chance to read the Oklahoma District Court’s decision in Pruitt v. Burwell. More or less, it follows the reasoning of Halbig, and rejected the reasoning of King (which it called the “legal fiction” interpretation).

As just noted, the court has the benefit of two recent opinions by courts of appeals, which reach opposite conclusions. In Halbig v. Burwell, 758 F.3d 390 (D.C.Cir.2014), the majority struck down the the IRS Rule. In King v. Burwell, 759 F.3d 358 (4 Cir.2014), the IRS Rule was upheld. (“Both opinions were issued on the same day. Neither addresses the other. ) For the reasons described below, this court finds the Halbig decision more persuasive

So there isn’t too much to add on the merits front. There are also curious citations to Judge Easterbrook’s foreword to the Scalia/Garner Book, as well as a blockquote to Richard Epstein’s post on Ricochet.

But what I found most interesting about the opinion came towards the very end. After the court invalidates the IRS rule, it suggests that if Congress doesn’t like how the statute it wrote is working out, it can change it:

This is a case of statutory interpretation. “The text is what it is, no matter which side benefits.” Bonnes v. United States, 759 F.3d 793, 798 (7 Cir.2014). Such a case (even if affirmed on the inevitable appeal) does not “gut” or “destroy” anything. On the contrary, the court is upholding the Act as written. Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will.

Halbig is indeed a statutory interpretation case. This entire dispute could be amended by an act of Congress one sentence long. It would say “strike ‘by the state’ from 26 U.S.C. §36B(c)(2)(A)(i).” That’s it. That would moot the entire litigation, give states the flexibility to create an exchange or not, and do what the supporters of the law wanted it to do.

But the chances of that happening are close to zero. There will be no effort to fix the law through the legislative channels. The Republicans in the House (and soon the Senate) have voted repeatedly to repeal the entire ACA. Efforts to amend it–even to do something that conservatives are seeking in court–will go nowhere fast. This apparent gridlock, in part, is why the President has turned to extra-legal executive efforts to rewrite the law.

So, in a sense, the district court’s offer to Congress is akin to what Richard Re has called The Doctrine of One Last Chance. Before the Court strikes down some law, they issue a narrow ruling, and give Congress a chance to fix it–knowing full well that Congress will not fix it. Then, with a clean conscience, the Court can invalidate the law in a future case. What’s different here is the court is invalidating the rule, and *then* telling the Congress to pass a new statute. This puts the cart before the horse, so to speak.

With Originalism, once Hugo Black, you never go back.