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Portrait, Chief Justice John Roberts
Chief Justice John Roberts
Part 2 of 2

The effect of the Supreme Court's decision on the Medicaid expansion component of the Affordable Care Act was the focus of my previous Part 1 post on the coming Medicaid wars. Since the publication of that piece, two new data points have been added to the mix: (1) a number of Republicans and conservatives have framed an argument that the federal subsidies for purchase of health insurance on exchanges would not be available in states where the federal government is forced to step in because the state refuses to establish an exchange (an interesting side issue is whether such refusal could jeopardize such state's  participation in the "existing" Medicaid program). The argument is that the express language of ACA does not provide for subsidies in federal exchanges, only in state established exchanges. The IRS has already rejected the argument and I am not at all sure who would have standing to to challenge the IRS' ruling. No state or entity would be harmed by the offer of subsidies on federal exchanges so why they would have the right to challenge the decision is not apparent to me. But courts hear cases when they want to. (2) The Congressional Budget Office (CBO) issued a (PDF) revised report considering the effect of the Supreme Court's decision on Medicaid expansion. The CBO concluded that the cost of ACA would be reduced by $89 billion but that 3 million less Americans would have health insurance.

The CBO appears to accept that subsidies can be offered on federal exchanges. The CBO states:

Why are the projected Medicaid and CHIP savings stemming from the Supreme  Court’s decision greater than the projected additional costs of subsidies provided through the exchanges? [...]: With about 6 million fewer people being covered by Medicaid but only about 3 million more people receiving subsidies through the exchanges
and about 3 million more people being uninsured, and because the average savings for each person who becomes uninsured are greater than the average additional costs for each person who receives exchange subsidies, the projected decrease in total federal spending on Medicaid is larger than the anticipated increase in total exchange subsidies[.]
The reason for this is not because subsidies can not be offered on federal exchanges, but rather "[o]nly a portion of the people who will not be eligible for Medicaid as a result of the Court’s decision will be eligible for subsidies through the exchanges."

The CBO is constrained by what the laws and regulations say now and can't consider potential additional measures by the federal government. Thus, the CBO writes:

Future legal or administrative actions will probably change the scope of what is possible under the ACA and the Court’s decision; CBO and JCT’s assessments should not be viewed as representing a single definitive interpretation of those possible outcomes.
One of the possibilities is one I suggested in Part 1—that the federal government offer Medicaid expansion through a federal exchange in those states (which appear to fully overlap with those states that are threatening to reject Medicaid expansion) that do not create state exchanges.

I'll explore how this might work on the other side.

(Continue reading on the other side.)

To start the analysis, I return to the text of the Affordable Care Act (PDF). I concentrate on the provisions regarding the establishment of federal exchanges in lieu of state exchanges in those states where the state choose to not create a health insurance exchange. I do this because the Medicaid expansion provisions are not presented as conditional. The ACA was written assuming, as a reading of Constitutional law at the time would have supported, that states would be compelled to accept the Medicaid expansion if they wanted to continue in the Medicaid program. Of course, we now know that the Court, in an outrageous act of unsupported judicial activism, declared that state can dictate to the federal government on this point.  See Part 1.

A good way to look at this from a policy perspective is provided by Joey Fishkin at Balkinization:

[F]or a state that opts out of the expansion, there is one silver lining.  Some of the people who would have been covered under Medicaid will instead end up buying coverage through the health insurance exchanges, with government subsidies.  And if you’re a state, those people are great news: (a) they’re insured, so you’re not stuck with the bill for uncompensated care, and (b) the entire subsidy is paid for by the federal government, so you, the state, pay nothing.  Let’s make this concrete.  In ballpark figures, one person just above the poverty line, on Medicaid, costs the federal government $6000/year, the state $700/year, and the individual almost nothing.  If that person instead goes out and buys insurance on the exchange, the federal subsidy is $9000/year (private insurance is more expensive than Medicaid), and the individual will have to pay $500+ on top of that, but now the state pays nothing.

Not bad—if you are the state.  You saved $700.  In fact, Douglas Holtz-Eakin has suggested that this is the secret rationale behind Republican governors’ coming out against the Medicaid expansion: they’ve figured out this ingenious trick to shift the costs to the federal government.

If that is the motivation, then there should be no policy or political argument against offering Medicaid expansion on federal exchanges. Fishkin notes a problem with a system that in fact does not do so:
[T]here is a big problem with this plan from a state budgetary point of view: not everyone who would have been covered by the Medicaid expansion will actually get health insurance on the exchanges.  Far from it. Most of these people—two thirds, says CBO—won’t even be eligible to participate in the exchanges.  This is because you need to be earning more than the federal poverty line to buy insurance on an exchange.  So let’s be clear: if a state like Texas says “no” to the Medicaid expansion, a childless, non-elderly, non-disabled adult earning less than the poverty line is not going to have any realistic way to get health insurance in the state of Texas.  She's just out of luck.
Here lies the policy imperative to offering Medicaid expansion through federal exchanges. But are the legal stumbling blocks too great? I think not. Consider the triggering event that permits the creation of federal exchanges:
The Secretary of Health and Human Services (HHS) will establish exchanges in states that do not create their own approved exchange.
So who tells the secretary of Health and Human Services what her exchange should look like? Well, she does, and do not doubt that the secretary will establish exchanges that will comply with ACA and the regulations she promulgates. Do the regulations disallow participation in the exchange if you do not qualify for subsidies? In my view, they do not. They merely provide for subsidies. If you accept my view, nothing in ACA prohibits the secretary from folding the Medicaid expansion into federal exchanges in those states that do not form exchanges and reject the Medicaid expansion.

The secretary can form federal exchanges that provide subsidies to qualified individuals to purchase health insurance on the exchange AND Medicaid to those persons made eligible by the Medicaid expansion provisions of ACA. Remember, that the first 3 years of Medicaid expansion are fully funded by the federal government and 90 percent funded for the years after that.

After the first 3 years, participants can be offered the opportunity to continue their Medicaid coverage by picking up the 10 percent of costs that was to be covered by the states.

Here is what I think is the winning feature of my proposal—no one has standing to sue. The states have no standing. Employers have no standing. No individuals have standing; after all, they do not have to participate.

So, there you have it, my solution to the coming Medicaid expansion wars.

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Comment Preferences

  •  The question no doubt on your minds (35+ / 0-)

    Isn't Medicaid run by the states? Yes and no. The states have Medicaid agencies that are bound by federal laws and rules.

    It is true that the offer of Medicaid coverage to those who would be eligible would require cooperation from the states. But the Medicaid programs themselves exist. An offer of a state Medicaid program as a "qualified plan" in a federal exchange could only be  nixed by the affirmative act of turning such people away by the state, even though the state has no cost incurred.

    Would a court find a federalism issue? Perhaps. But assume that they do, then the federal government could graft this Medicaid coverage (the expansion) on to existing federal  insurance programs.

    The one I have in mind is the federal employee plan.

  •  Interesting approach (9+ / 0-)

    Not that courts don't find standing if they want to make a statement about something, but the basic idea, federalizing more of our health care spending, works for me. As I have said in the past, the feds should have taken over medicaid in 2009 as part of the effort to keep states from cutting staffing. Now we find a new way to make certain that more people are covered.

    We still need to find a way to control costs. It's insane that we offer a mediocre health care system at twice the cost of other OECD health care.

    The GOP is the party of mammon. They mock what Jesus taught.

    by freelunch on Sun Jul 29, 2012 at 09:07:37 AM PDT

  •  Latino Decisions when polling Latinos early this (6+ / 0-)

    year found that the four biggest issue were (in this order):

    Healthcare, the economy, education, immigration.

    I really wonder if this might be the issue that could awake the sleeping giant in Texas. A smart Dem could offer the relatively poor Latinos in South Texas (the area with the lowest turnout numbers) a way to get Healthcare without scaring the good folks of the Houston and Dallas suburbs with a huge tax bill.

    -1.63/ -1.49 "Speaking truth to power" (with snark of course)!

    by dopper0189 on Sun Jul 29, 2012 at 09:18:12 AM PDT

  •  I'm becoming very familiar with medicaid since (14+ / 0-)

    my niece had a catastrophic accident which left her paralyzed last summer.  What I'm finding fascinating is how many people I know who are using the Medi-Cal system here in California.  When people ask me how she is doing, I try to educate:  She's doing better every week (and she truly is an inspiration...she's training for a marathon right now...she'll be on a handbike) but the challenges now are financial.  Which is where I slip in info about the ACA and medicaid.  Which is what then leads to a discussion about insurance companies.  Yet many of these same people who are on Medi-Cal don't even realize that they themselves are on Medicaid!  We need to educate people about the medicaid system...how many of us, and our disabled friends and relatives and the elderly in our lives use this system.  

    Got Social Security? Thank a Democrat!

    by Fury on Sun Jul 29, 2012 at 09:31:22 AM PDT

  •  Second Term will be a Mind Blower (5+ / 0-)

    Matt Stoller:

    The White House already tried cutting all three main entitlement programs, last year (cuts to Medicaid are actually cuts to Obamacare, for what it’s worth, since an expansion of Medicaid was a key plank of the new health care law).

        The White House agreed to cut at least $250 billion from Medicare in the next 10 years and another $800 billion in the decade after that, in part by raising the eligibility age. The administration had endorsed another $110 billion or so in cuts to Medicaid and other health care programs, with $250 billion more in the second decade. And in a move certain to provoke rebellion in the Democratic ranks, Obama was willing to apply a new, less generous formula for calculating Social Security benefits, which would start in 2015.

    Going after entitlements is in fact a tradition of Democratic politicians since the 1980s. The post-WWII model of dealing with entitlements was to expand them as a way of boosting aggregate demand. But as Carter, Reagan and Volcker ushered in an era of Wall Street greed and austerity, that trend reversed. In the early 1980s, Speaker of the House Tip O’Neil collaborated with Ronald Reagan to raise taxes on the poor and middle class with a “grand bargain” around Social Security. Later on, Bill Clinton had his go at the programs, with an even more aggressive plan to destroy the remains of New Deal liberalism.

    Whatever imaginary framing some of us conjure up to mark those ballots, once that is done the reality will be very grim.
    •  Matt Stoller is full of S*&t! (0+ / 0-)

      I read this a few hours ago and he comes across like a tin foil hat conspiracy nut.  He should be ashamed of himself.

      •  All this is true (4+ / 0-)
        Recommended by:
        splashoil, wsexson, Mr Robert, supercereal
        The White House agreed to cut at least $250 billion from Medicare in the next 10 years and another $800 billion in the decade after that, in part by raising the eligibility age. The administration had endorsed another $110 billion or so in cuts to Medicaid and other health care programs, with $250 billion more in the second decade. And in a move certain to provoke rebellion in the Democratic ranks, Obama was willing to apply a new, less generous formula for calculating Social Security benefits, which would start in 2015.
        Nothing tin-foil about it.

        People who think these concessions don't mean anything because they haven't been enacted yet are the ones living in fantasy land. When you've conceded something it's as good as given away.

        We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

        by denise b on Sun Jul 29, 2012 at 10:55:45 AM PDT

        [ Parent ]

        •  I know that cost controls were included. (0+ / 0-)

          But where were the age changes?

          The GOP is the party of mammon. They mock what Jesus taught.

          by freelunch on Sun Jul 29, 2012 at 11:13:40 AM PDT

          [ Parent ]

          •  They're either coming (1+ / 0-)
            Recommended by:
            splashoil

            or they'll be traded for some other cut in benefits.

            We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

            by denise b on Sun Jul 29, 2012 at 08:27:00 PM PDT

            [ Parent ]

        •  Really? Where did you see this agreement? (3+ / 0-)
          Recommended by:
          Mr Robert, burnt out, TexasTom

          1) there was a lot of negotiations going on between the WH and Boehner, nothing was final, until it was final, and it never was final.

          2) Everyone agrees that something has to be done about Medicare, and even Social Security.  The only question is, what changes have the least impact on recipients.  Replacing that stupid addition to Medicare that the Republicans passed, that was a complete give away to the Insurance companies and big Pharma, would be a "cut" in Medicare, but would save the government billions without hurting anyone's benefits.  Stoller treats ANY change as the SAME change the Republicans would do.

          This is complete and total BS, and Stoller knows it.

          •  Third Way Cheerleaders (0+ / 0-)

            Will champion Obama's "reforms."  Lots of good times ahead.  The kool aid is even better with xtra sugar...

            •  Obama killed Drug Reimportation (2+ / 0-)
              Recommended by:
              ladybug53, supercereal

              I would have benefited greatly from the ability to purchase medications in Canada.  I live just twenty minutes from the border.  North drugs are usually 1/4 to 1/3 cost here.  Most are made in USA.  Of course, Single Payer beats any imagined benefits from the ACA.  An individual health care enrollment costs just $60/month.  A couple pay $109/month.  A family of three or more pay $121/month.  Everyone is covered, so this discussion of Medicaid coverage would be moot.
              It is a shame and a pity that we are even talking about such a barbaric system in the USA, after investing our hopes and dreams in a new Democratic President.

              •  And now 30 million will get insurance. (2+ / 0-)
                Recommended by:
                burnt out, TexasTom

                Don't forget that the ACA was one of the hardest fought bills since medicare.  Obama had to give in to big Pharma in order to stop them from running those Harry and Louise commercials which would have certainly killed it.

                The Republicans fought tooth and nail to prevent drug reimportation, Obama had to give in in order to get anything at all, and you blame Obama?  All it would have taken was about 3 Republican senators and there wouldn't have to have been a dirty deal with the big drug companies.  Why aren't you mad at the Republicans?

                •  Because My Democrats sold me out (0+ / 0-)

                  My Senators Cantwell and Murray both voted to kill re-importation at the behest of the WH.  I remember the Dorgan Amendment and how it went down.  It was ugly.
                  Why should ignore betrayal by those who were supposed to be on my team?

          •  Medicare Part-D Sucks! (3+ / 0-)
            Recommended by:
            pollwatcher, ladybug53, splashoil

            Before I turned 65 I received several thousand dollars worth of medication needed to treat my diabetes each year through the Patient Assistance Programs operated by Novartis, Lilly, and Sanofi-Aventis, however, that all changed now that I'm on Medicare.

            Lilly and Sanofi-Aventis told me that I no longer qualified. They expected me to go out and purchase a Part-D policy instead. The problem is that my out of pocket expenses would go from zero to thousands.

            I went to the Medicare.gov web site and used their tools to compute my costs and decided that it just didn't make sense to purchase a Part-D policy. So right now I'm looking at switching one of my insulins to an older type of insulin that I can purchase from Wal-Mart for $25 a month verses a couple of hundred a month because of the high co-pays associated with the Part-D policies.

            The policies themselves cost around $50 or even less per month, but the co-pays for anything other than generic drugs is through the roof. So I'll go on buying my generic drugs at discount pharmacies or from Canada.

            Fortunately I've managed to accumulate a couple of years supply of my Lantus insulin and will be able to continue using that along with the cheap Wal-Mart insulin. But, after the Lantus runs out I don't know what I'm going to do other than switch to a generic insulin of a type that diabetics used decades ago. :-(

            So, bottom line, as far as I'm concerned is that Part-D just gives the drug companies an excuse to dump low income patients off of their assistance programs while enriching the insurance companies.

            And, by the way, one of the reasons we don't have generic versions of these drugs is because of laws and FDA licensing that applies to "biologic" drugs like Lantus and Humalog. As a result, these companies don't have to worry about competition from other companies even after their patients expire and that's really sad because generic versions of these "biologic" drugs would drastically lower the costs of diabetes care.

            Honesty pays, but it doesn't seem to pay enough to suit some people. Kin Hubbard

            by Mr Robert on Sun Jul 29, 2012 at 02:50:03 PM PDT

            [ Parent ]

            •  Yes. I'm about to join Costco again (1+ / 0-)
              Recommended by:
              Mr Robert

              I let my membership lapse when I downsized because I no longer have room for large quantities of anything.

              But I can save enough by getting one of my meds - a GENERIC med at that - at Costco to cover my membership and still save a substantial amount of money over using my Part D, for which I am paying $45/month.

              Pitiful, isn't it?

              We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

              by denise b on Sun Jul 29, 2012 at 08:36:06 PM PDT

              [ Parent ]

          •  And you think they're done now? (1+ / 0-)
            Recommended by:
            splashoil

            Are you really that blind?

            We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

            by denise b on Sun Jul 29, 2012 at 08:38:18 PM PDT

            [ Parent ]

  •  The Final Solution. (2+ / 0-)
    Recommended by:
    radarlady, Armando

    Sorry, but it's appropriate. This is the gop's final solution.

    You can't make this stuff up.

    by David54 on Sun Jul 29, 2012 at 09:43:16 AM PDT

  •  I don't understand the leap (2+ / 0-)
    Recommended by:
    Armando, Ice Blue

    from "Do the regulations disallow participation in the exchange if you do not qualify for subsidies?" (Of course not--if your income is above 400% of the poverty line, you do not qualify for a subsidy) to "nothing in ACA prohibits the secretary from folding the Medicaid expansion into federal exchanges in those states that do not form exchanges." You previously stated that those with earnings below the poverty line are barred from participating in the exchanges. And Medicaid is still a separate program.

    It seems clear to me that the exchanges and Medicaid expansion are separate programs for separate populations. I'm a bit confused as to how anyone who would have been eligible for Medicaid expansion would be able to handle the co-pays on the exchanges, but I guess the subsidies must be more generous than I had thought. Still, the CBO sounds more like what will actually happen--I wonder if they figure in the cost of uncompensated cost in their "savings."

    "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

    by Alice in Florida on Sun Jul 29, 2012 at 10:05:36 AM PDT

  •  So, actually, here's the deal (2+ / 0-)
    Recommended by:
    Armando, Mr Robert
    (an interesting side issue is whether such refusal could jeopardize such state's participation in the "existing" Medicaid program).
     That is from the diary here.
    Now, here's the deal:  Originally, the law included a provision that the federal government could take away all of a state’s Medicaid funding if it refused to go along with the expansion, which all but ensured participation. But the Court ruled that such a maneuver was unconstitutional.
    That is from this site:  http://www.thenation.com/...

    Seems that states can actually opt out of participating in the expanded Medicaid provision and still receive federal funding as they've been receiving for what they're currently involved in.

    The truth is sometimes very inconvenient.

    by commonsensically on Sun Jul 29, 2012 at 10:15:44 AM PDT

  •  Who, in the state, decides to opt out, or in? (2+ / 0-)
    Recommended by:
    Armando, PAbluestater

    The Governor? The legislature? Popular vote?

  •  A final thought (1+ / 0-)
    Recommended by:
    Mr Robert

    Here is where Elena Kagan's view on executive power come in handy.

    •  Good verses Evil (0+ / 0-)

      I could be wrong, but it seems to me that "executive power" has mostly come down on the side of evil so this would be a change.

      Honesty pays, but it doesn't seem to pay enough to suit some people. Kin Hubbard

      by Mr Robert on Sun Jul 29, 2012 at 03:01:54 PM PDT

      [ Parent ]

  •  Could the Federal exchanges allow the people who (4+ / 0-)

    would have been covered under expanded Medicaid the option of buying coverage  under Medicaid, which is less expensive than private insurance?

  •  A 2nd, 3rd, 4th chance for Roberts redemption? (1+ / 0-)
    Recommended by:
    Armando

    I get the feeling the right will keep coming back to the court with little bits and pieces of the ACA until Roberts overturns enough where it becomes unworkable.

  •  Might very well be a great solution... (1+ / 0-)
    Recommended by:
    Armando

    but it rankles me a bit since it would appear to be another instance of the anti-government red states getting an even bigger handout from the federal government which of course will almost surely be paid by blue state taxpayers. And still getting to brag again about how they reject federal intervention!

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Sun Jul 29, 2012 at 10:51:10 AM PDT

    •  They were getting more either way (1+ / 0-)
      Recommended by:
      Armando

      For some reason, the poorer states seem to be opposed to their own best interests. We could speculate that it comes because poor whites resent it when poor blacks also get benefits from the government, but not all poor states that vote Republican have very many blacks.

      The GOP is the party of mammon. They mock what Jesus taught.

      by freelunch on Sun Jul 29, 2012 at 11:17:51 AM PDT

      [ Parent ]

  •  even if the feds establish the exchange, it only (1+ / 0-)
    Recommended by:
    Armando

    applies to that state in which it is established. How does this, then, make it a "federal" exchange as opposed to a "state" exchange. Seems like a mighty wierd reading of the law to claim that it is a "federal" exchange, but I suppose when you're desperate...

  •  Here is something to consider (2+ / 0-)
    Recommended by:
    Armando, Mr Robert

    Let's see what states try to F over their low-income population.  Then let's redo the Medicaid federal share formula which is different for each state.  

    I don't have the state list in front of me but I can tell you that red states tend to get a significantly higher share of what the Feds pick up.  Just a for instance - Feds typically pick up 50% of New York's Medicaid costs but 70% or so Mississippi's.

    Just one more example of blue subsidizing red.

  •  it will be Doctors and Hospital CEOs (1+ / 0-)
    Recommended by:
    Mr Robert

    who want and need that Medicaid $$$$

    Muller, who oversees a $4 billion-a-year sprawl of academic hospitals and health care services, spoke on a panel convened by Penn's Leonard Davis Institute of Health Economics to discuss the implications of the U.S. Supreme Court's decision upholding the health reform law.

    "I am very glad the justices upheld the act because otherwise, there would have been chaos," said Muller, also the former CEO of the University of Chicago Hospitals and Health System and, earlier in his career, Deputy Commissioner of the Massachusetts Department of Public Welfare where he oversaw the state's Medicaid program.

    Unfortunately the only fix to this problem is for the many Republican and some Democratic politicians to be "Persuaded" to take this money to provide healthcare.
  •  Great diary Armando (0+ / 0-)

    I hope you're right and that this situation eventually leads to a federalization of Medicaid.

    Honesty pays, but it doesn't seem to pay enough to suit some people. Kin Hubbard

    by Mr Robert on Sun Jul 29, 2012 at 03:16:32 PM PDT

  •  I agree that broad discretion is due to the sec'y (0+ / 0-)

    to establish the exchanges she is responsible for. Here's a fun cite along those lines: Sea-Land Service v. Dole (DC Cir. 1983) (Scalia, Circuit Judge):

    Our task in a case of this sort is not to provide our own original construction of the governing statute, but rather to determine whether the agency's construction is "sufficiently reasonable" to be allowed.
    The case involved the administration of merchant marine subsidies ("essential services" comes up a lot!)

    Naturally, Scalia likes discretion more when it belongs to Liddy Dole.

    Ok, so I read the polls.

    by andgarden on Sun Jul 29, 2012 at 03:28:27 PM PDT

  •  Anybody else getting tired of this "states can do (0+ / 0-)

    WTF-ever they want, 'cuz OMGS0VRAINTEA!!!" BS?

    It seems to do little beyond permitting the states to run amok like unsupervised bullies on the national playground.  There is no need, and no advantage to permitting each state to run a federal election (for example) in a different and inconsistent manner from its neighbor states.

    Registering to vote, getting on the ballot, accessing Medicaid, identifying and punishing voter fraud, etc. should be uniform, not quaint, not ridiculous, not deliberately tilted, not gamed to the advantage of the "local heroes".  The CIvil War should have ended this rat's-nest of precious specialness, and we should have seen the absolute last of it by the end of Reconstruction.

    I mean, really - either we are united, or we are NOT.

    And we are not.

    "Kenyan-Muslim-Communistic-Expialidocious!"

    by chmood on Sun Jul 29, 2012 at 06:29:09 PM PDT

  •  Thirteen Ways of Looking at a Clang Bird (0+ / 0-)

    Lambert Strether

    Here at least is one case where American Exceptionalism turns out to be true: The American system of health care is both exceptionally expensive and uniquely lethal. Why can’t we talk about, instead of diverting ourselves by arguing about the misfeatures of a “reform” that mostly kicks in two years from now, and has the main virtue of only throwing some few millions under the bus? And don’t talk to me about meanie Republicans; if the Democrats had wanted to pass real legislation, they would have abolished the filibuster in 2009, when they had the House, the Senate, and a mandate.
    Warning!  May cause distress to any sentient person concerned about the State of the Nation.
  •  Not really a new issue (0+ / 0-)
    Since the publication of that piece, two new data points have been added to the mix: (1) a number of Republicans and conservatives have framed an argument that the federal subsidies for purchase of health insurance on exchanges would not be available in states where the federal government is forced to step in because the state refuses to establish an exchange (an interesting side issue is whether such refusal could jeopardize such state's  participation in the "existing" Medicaid program).
    This argument is not new. It was raised at least as early as September of 2011.
  •  Standing. (0+ / 0-)
    The IRS has already rejected the argument and I am not at all sure who would have standing to to challenge the IRS' ruling. No state or entity would be harmed by the offer of subsidies on federal exchanges so why they would have the right to challenge the decision is not apparent to me.
    Ultimately, an employer with more than 50 employees who doesn't offer coverage must pay a penalty if employees receive an insurance subsidy. If such employees are receiving an insurance subsidy for insurance purchased on the federal exchange because their state failed to set one up, the argument is that they should not have received subsidies. Hence, the employer forced to pay the "offers no coverage" penalty in this case would have standing to challenge the IRS.

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