Saturday, July 26, 2014

Keep calm: Postscript

On December 6 2010 Tom Christina of the American Enterprise Institute gave a presentation detailing his hopes for overturning the Affordable Care Act by judicial means. In his PowerPoint presentation, he noted the main criteria:

He found himself gravitating to questions of the state and/or federal government-run health insurance exchanges as an "attractive target", wondered if religious exemptions could provide an issue, and noted, just in passing, an odd little missing thing in Section 1401:

The income tax credits through which premiums under the Act were subsidized for the individual state exchanges under section 1311 didn't seem to be mentioned for the cases of section 1321, on exchanges set up by the federal government to take care of a state where the local government failed to take care of it. So that if any state failed to set up an exchange, and the federal government had to go in and set it up for them, you could argue that there was no authority for the clients of that exchange to get a subsidy, without which they might not be able to afford the policy, and the law really couldn't be implemented at all.

We don't know what Christina said about this in his presentation—the PowerPoint drops the theme—but it seems to have had a big effect on a couple of scholars, Michael Cannon of the Cato Institute and Professor Jonathan Adler of Case Western University Law School, who later noted it as the original stimulus to some work of their own:
The authors were first made aware of this aspect of the PPACA by a presentation by attorney Thomas Christina at the American Enterprise Institute in December 2010. See Tom Christina, What to Look for Beyond the Individual Mandate (And How to Look for It), Am. Enter. Inst. (Dec. 6, 2010), (Ed. note: that URL doesn't work; a better link is above.)
In later mythologizing they would write Christina out of the script a little bit—
It all started in 2011, when Jonathan H. Adler, a conservative law professor at Case Western Reserve University in Ohio, shot an email to his friend Michael Cannon, a health policy expert at the libertarian Cato Institute in Washington, D.C. Adler thought he had spotted an error in Obamacare that could unravel a significant portion of the law.
—but I don't think they meant any harm. Anyhow it seems that Adler must have been at the talk.

Somebody else was also aware of the glitch, because in proposed regulations laid out for public comment by the IRS on September 6, it had been fairly carefully written around:
The proposed regulations provide that a taxpayer is eligible for the credit for a taxable year if the taxpayer is an applicable taxpayer and the taxpayer or a member of the taxpayer’s family (1) is enrolled in one or more qualified health plans through an Exchange established under section 1311 or 1321 of the Affordable Care Act...
And Timothy Jost of Seton Hall Law School was aware that there might be some controversy there, though not, he thought, anything that could in the long run be taken seriously, writing on September 11 (the 10th anniversary of the tragedy):
The latest ACA kerfuffle involves the discovery by critics of the ACA of an ACA drafting error that would seem to deprive millions of uninsured Americans of tax credits to purchase health insurance and invalidate regulations recently proposed by HHS and the Treasury Department.... That this is a drafting error is obvious to anyone who understands the ACA. 
So we have two fairly clear sides at work here: one that wants to see the Act implemented and one that wants to stop it "by any means necessary" in the words of Malcolm X, seeing the best approach as undermining it by digging a tunnel through Anthony Kennedy, preferably with "optics" to win public approval.

On September 16, the day before the scheduled IRS hearing on the regulations, Adler and Cannon came out with a cannonade in the Wall Street Journal, making it a story about President Obama's dictatorial habits:
the law has a major glitch that threatens its basic functioning. It's so problematic, in fact, that the Obama administration is now brazenly trying to rewrite the law without involving Congress.
They had an interesting theory about the tax credits:
The Patient Protection and Affordable Care Act offers "premium assistance"—tax credits and subsidies—to households purchasing coverage through new health-insurance exchanges. This assistance was designed to hide a portion of the law's cost to individuals by reducing the premium hikes that individuals will face after ObamaCare goes into effect in 2014. 
That's a pretty cool way of hiding the cost to individuals, by making it not be a cost to individuals. "Permit me to hide the cost of your dinner by buying it for you." Thanks, I'll take a couple of those.

Anyway, it's in this context that you need to understand today's little tempest about the apparent "confession" by MIT's Jonathan Gruber (a good place to start reading about it is Steve's, but don't neglect Scott Lemieux), from a talk of January 18 2012, that the language of the ACA indeed forbids federal exchanges from offering premium support to customers at 400% or less of the federal poverty level. He could not possibly have thought so at any time between September 6 and the final publication of the regulations on May 23 2012 (let alone afterwards, when it was obvious to anyone but a crazed reactionary or a Bush judicial appointment). If that's what he was really saying, it wasn't, as he now explains, what he meant to say, because there's no way he could have believed as a matter of course that those regulations would not be implemented. Even if he believed Adler's and Cannon's stupid arguments he'd have had to wait until July, because that's when they were published.

But what Adler's and Cannon's arguments were about in any case was never the content of the law itself—it was always as it started with Tom Christina about the strategy for getting to Justice Kennedy and throwing it out, regardless of what it said, pure, and purely cynical, maneuver.
Via Perez Hilton.

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