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Expanding Chevron Deference with the ACA Decision

I really enjoyed this column by George Will, which was published soon after the Obamacare decision. Will explores how the decision exemplifies how Chief Justice Roberts embraced and expanded the concept of “Chevron Deference”, which, he contends, will have a lasting affect on future court decisions.

For those of you who don’t know, Chevron Deference basically says that agencies charged with administering statutes are entitled to deference when they interpret ambiguous statutory language. Will charges that the decision now allows the executive branch to apply deference in situations that are not just ambiguous, also “inconvenient for the smooth operation of something Congress created.” Check out the column below:

Conservatives are dismayed about the Supreme Court’s complicity in rewriting the Affordable Care Act — its ratification of the IRS’s disregard of the statute’s plain and purposeful language. But they have contributed to this outcome. Their decades of populist praise of judicial deference to the political branches has borne this sour fruit.

The court says the ACA’s stipulation that subsidies are to be administered by the IRS using exchanges “established by the State” should not be construed to mean what it says. Otherwise the law will not reach as far as it will if federal exchanges can administer subsidies in states that choose not to establish exchanges. The ACA’s legislative history, however, demonstrates that the subsidies were deliberately restricted to distribution through states’ exchanges in order to pressure the states into establishing their own exchanges.

The most durable damage from Thursday’s decision is not the perpetuation of the ACA, which can be undone by what created it — legislative action. The paramount injury is the court’s embrace of a duty to ratify and even facilitate lawless discretion exercised by administrative agencies and the executive branch generally.

The court’s decision flowed from many decisions by which the judiciary has written rules that favor the government in cases of statutory construction. The decision also resulted from Chief Justice John G. Roberts Jr.’s embrace of the doctrine that courts, owing vast deference to the purposes of the political branches, are obligated to do whatever is required to make a law efficient, regardless of how the law is written. What Roberts does by way of, to be polite, creative construing (Justice Antonin Scalia, dissenting, calls it “somersaults of statutory interpretation”) is legislating, not judging.

Roberts writes, almost laconically, that the ACA “contains more than a few examples of inartful drafting.” That is his artful way of treating “inartful” as a synonym for “inconvenient” or even “self-defeating.”

Rolling up the sleeves of his black robe and buckling down to the business of redrafting the ACA, Roberts invents a corollary to “Chevron deference.”

Named for a 1984 case, Chevron deference has become central to the way today’s regulatory state functions. It says that agencies charged with administering statutes are entitled to deference when they interpret ambiguous statutory language. While purporting to not apply Chevron, Roberts expands it to empower all of the executive branch to ignore or rewrite congressional language that is not at all ambiguous but is inconvenient for the smooth operation of something Congress created. Exercising judicial discretion in the name of deference, Roberts enlarges executive discretion. He does so by validating what the IRS did when it ignored the ACA’s text in order to disburse billions of dollars of subsidies through federal exchanges not established by the states.

Chevron deference does for executive agencies what the “rational basis” test, another judicial invention, does for legislative discretion.

Since the New Deal, courts have permitted almost any legislative infringement of economic liberty that can be said to have a rational basis. Applying this extremely permissive test, courts usually approve any purpose that a legislature asserts. Courts even concoct purposes that legislatures neglect to articulate. This fulfills the Roberts Doctrine that it is a judicial function to construe laws in ways that make them perform better, meaning more efficiently, than they would as written by Congress.

Thursday’s decision demonstrates how easily, indeed inevitably, judicial deference becomes judicial dereliction, with anticonstitutional consequences. We are, says William R. Maurer of the Institute for Justice, becoming “a country in which all the branches of government work in tandem to achieve policy outcomes, instead of checking one another to protect individual rights. Besides violating the separation of powers, this approach raises serious issues about whether litigants before the courts are receiving the process that is due to them under the Constitution. It would result if its branches behaved as partners in harness rather than as wary, balancing rivals maintaining constitutional equipoise.

Roberts says “we must respect the role of the Legislature” but “[A] fair reading of legislation demands a fair understanding of the legislative plan.” However, he goes beyond “understanding” the plan; he adopts a legislator’s role in order to rescue the legislature’s plan from the consequences of the legislature’s dubious decisions. By blurring, to the point of erasure, constitutional boundaries, he damages all institutions, not least his court.

SCOTUS Upholds Obamacare, 6-3

From Scotusblog:

Decision of the Fourth Circuit is affirmed in King v. Burwell. 6-3.

This means that individuals who get their health insurance through an exchange established by the federal government will be eligible for tax subsidies.

Chief Justice writes for the Court. Six are the Chief, Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan.

Dissent by Scalia, joined by Alito and Thomas.

Court refused to apply Chevron deference — that is, to find that the statute is ambiguous and that the federal government’s interpretation was reasonable.

From Scalia’s dissent: “We should start calling this law SCOTUScare.” From the intro to Scalia’s dissent: the majority’s reading of the text “is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.”

From the majority opinion: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

The majority also acknowledges that the challengers’ “arguments about the plain meaning . . . are strong.”

‘In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase’…

The opinion is here

Justice Scalia’s dissent, via the WSJ:

Obamacare Tax Compliance May Be An Issue For the Poorest

This year is the first year for which proof of health insurance, or payment of the “shared responsibility” tax/fee/penalty, is required to be accounted for on one’s tax return. But what happens when a person does not meet the income threshold to actually have to file their taxes?

The Weekly Standard points out that a conundrum exists for the poor. Under Obamacare rules, the economically disadvantaged,

“can get an income-based exemption if ‘you don’t have to file a tax return because your income is below the level that requires you to file.’ Sounds simple enough, right? Until further investigation reveals that this exemption is claimed directly on the tax return. That’s right – the tax return you’re not required to file.”

So the fate of those who are uninsured and also do not file? If they do not claim their exemption, they will be on the hook for the “shared responsibility” payment and “are likely to get hit with an unexpected tax bill later on.” That is sloppy at best and egregious at worst.

Obamacare purports to help those who, economically, are the least among us. The law provides financial help to purchase healthcare for the poor, or a path of exemption for those who cannot afford healthcare or the uninsured penalty. Yet it fails to provide a mechanism of compliance for those who among us who are too poor to pay taxes and the penalty. In this regard, Obamacare falls short of its most basic goals — and will wreak tax havoc in the future for those poorest ensnared by this deficiency.

A Very, Merry (Un)birthday to Obamacare

March 23, 2010: Obamacare was signed into law by President Obama. How have we fared since then? Sally Pipes over at NYDailyNews gives a good overview of how Obamacare has failed to live up to its expectations.

“Obamacare turns five years old today. But there’s little to celebrate.

When he signed his signature piece of legislation into law, President Obama guaranteed lower health-care costs, universal coverage and higher-quality care. Americans wouldn’t have to change their doctors if they didn’t want to. Five years later, the health law has failed to fulfill those grandiose promises.

“In the Obama administration,” candidate Obama boasted in 2008, “we’ll lower premiums by up to $2,500 for a typical family in a year.”

Not quite. A recent report from the National Bureau of Economic Research examined the non-group marketplace, where families and individuals who don’t get coverage through work shop for insurance. The report concluded that 2014 premiums were 24.4% higher than they would have been without Obamacare.

On Obamacare’s third birthday, the White House reassured Americans the law would protect vulnerable patient populations from increases in drug prices.

“Preventing them from being charged more because of a pre-existing condition or getting fewer benefits like mental health services or prescription drugs,” was a key purpose of the law, explained the White House.

Instead, drug costs for these patients have skyrocketed. The majority of health plans on the exchanges have shifted costs for expensive medications onto patients.

In 2015, more than 40% of all “silver” exchange plans — the most commonly purchased — are charging patients 30% or more of the total cost of their specialty drugs. Only 27% of silver plans did so last year.

Part of the problem is that Obamacare has quashed competition.

The president promised in 2013 that “this law means more choice, more competition, lower costs for millions of Americans.” But that hasn’t turned out to be true. According to the Heritage Foundation, the number of insurers selling to individual consumers in the exchanges this year is 21.5% less than the number on the market in 2013 — the year before the law took effect.

The Government Accountability Office reports that insurers have left the market in droves. In 2013, 1,232 carriers offered insurance coverage in the individual market. By 2015, that number had shrunk to 310.

A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration.
As competition in the exchanges declines, so does quality — just like Obama inadvertently predicted in 2013, when he said: “without competition, the price of insurance goes up and the quality goes down.”

Consumers who purchase insurance on the law’s exchanges have fewer options than they had pre-Obamacare. McKinsey & Co. noted that roughly two-thirds of the hospital networks available on the exchanges were either “narrow” or “ultra-narrow.” That means that these insurance plans refuse to partner with at least 30% of the area’s hospitals. Other plans exclude more than 70%.

Patients may also have fewer doctors to pick from. More than 60% of doctors plan to retire earlier than anticipated — by 2016 or sooner, according to Deloitte. The Physicians Foundation reported in the fall that nearly half of the 20,000 doctors who responded to their survey — especially those with more experience — considered Obamacare’s reforms a failure.

The Obama administration claims the health-care law has been a success because millions have gained insurance coverage. But that coverage is worthless if they can’t find a doctor or hospital who will see them.

Further, as many as 89% of the Americans who signed up for Obamacare when the exchanges opened in 2013 already had insurance. In other words, many exchange enrollees simply switched from one plan to another.

And the law is set to cover far fewer people than initially promised. In March 2011, the Congressional Budget Office forecast that 34 million uninsured would gain insurance thanks to Obamacare by 2021. But this month, the agency revised that estimate to 25 million obtaining coverage by 2025.

Covering those people isn’t cheap. This month, the CBO estimated the law’s 10-year cost will reach $1.2 trillion — a far cry from the President’s initial promise of $940 billion.

So much for President Obama’s five-year-old declaration that he would not sign a plan that “adds one dime to our deficits — either now or in the future.”

Time and again, Obama has been proven wrong about what his health law would accomplish. Quality hasn’t improved, and costs continue to grow out of control. So far at least, that’s Obamacare’s legacy.”

Incorrect 1095A Forms Are Finally Being Corrected — Nearly 2 Months Later

There have been many reports about incorrect 1095A forms being sent out. The 1095A (the Health Insurance Marketplace Statement), is the form that the government sends you if you enrolled in an Obamacare plan last year, and is your proof of insurance. This form is necessary in order to fill out your 8562 worksheet on your 2014 tax form. For more about the 1095A, go here and here .

Considering that only 6.7 million people enrolled in and paid for an Obamacare plan in 2014 (after adjusting for counting dental plans), it’s pretty terrible that the Administration sent out about 820,000 incorrect 1095A forms; that’s about 12-13% of all enrollees.

The original forms were supposed to arrive in everyone’s mailbox by January 31st (like W-2s and 1099s), but then the Administration pushed that arrival date into the first week of February. Now we are in the 3rd week of March. All the people who have incorrect 1095As have been delayed in filing their taxes.

But, a correction is near!

“Federal officials said on a Friday press call that about 740,000 corrected forms have been mailed out or can be downloaded from the HealthCare.gov site. About 80,000 corrected forms will be mailed and available online next week, they said.

Consumers who already filed their tax returns using the incorrect forms provided though state or federal exchanges won’t be required to file amended forms, and the Internal Revenue Service won’t assess additional taxes, said Mark Mazur, the Treasury Department’s assistant secretary for tax policy.

The Obama administration may re-evaluate filing extensions because of the incorrect forms, but at this time, April 15 is the end of tax-filing season based on statute, officials said.”

So all these people have had to wait an additional 7-8 weeks for a correct 1095A form that they are required by the federal government to have in order to correctly calculate their “Premium Tax Form” (Form 8562) on their 2014 taxes, because the federal government screwed up their forms in the first place. Now they have to scramble to finish their taxes by April 15th.

Good luck to the Obamacare victims.