Kevin Gutzman – The DC Court Just Killed Obamacare

Mandeville, LA – Exclusive Transcript – “It’s not yet known whether the Obama administration is going to ask that all 13 judges on the DC Circuit Court reconsider the three-judge panel’s decision, or if it’s going to appeal to the Supreme Court.  I think the ultimate implication here is, unless the Halbig decision is reversed, that Obamacare has to go.  There’s no way the Democrats who live outside those 14 states with state exchanges are going to be able to continue to support the existence of Obamacare if all it means in their state is that poor people now are going to be penalized if they don’t buy health insurance, which is where we’re left by the ruling at the moment.”  Check out today’s transcript for the rest…

Begin Mike Church Show Transcript

Mike:  Victory for the rule of law or tragedy?  What does the case cover?

Kevin Gutzman:  Well, what this is about is the question of the availability of federal subsidies to people under Obamacare.  Essentially the question was: Suppose you live in a state that does not establish a state insurance exchange.  Then are you able to get a subsidy under Obamacare.  One side in the case said you’re not because the law says, that is the Obamacare statutory language says that these subsidies will be available to people from the state exchanges.  What happened was the federal government, the Obama administration had decided, since only 14 states established state exchanges and the other 36 decided they didn’t want to, that we’ll go ahead and set up a federal exchange and we’ll subsidize your healthcare.  What the court said was no, you can’t do that, federal executive branch, because the law says that these subsidies will be available only to people who have purchased their insurance on the state exchange.

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The practical effect of all this is that there are 36 states in the United States where, if the Halbig ruling stands, you won’t be able to get subsidy under Obamacare.  So if you’re one of those people who thought that Obamacare was going to mean the federal government was picking up part of the expense of your insurance, that’s only going to be true if you live in one of the 14 bluest states in the country where they set up the Obamacare exchanges.  Virtually all of the states have decided not to do that.  California, New York, Massachusetts, Connecticut, Maryland, the usual offenders, have set up exchanges, but most of the states haven’t.

Essentially what the Halbig decision was saying was that the federal government could not go ahead and provide subsidies to the people in the other states anyway.  Those people are going to be out of luck.  In fact, those people are going to be facing the Obamacare mandate to buy insurance, which they had not been buying before.  They didn’t think it was worth the money to them to be insured.  Essentially you’re not going to get any help in paying for it from the federal government.  It’s a whammy for people of lower income who live in one of the, essentially the red states, or the purple states who have decided not to set up the Obamacare exchanges.

I think the ultimate implication here is, unless the Halbig decision is reversed, that Obamacare has to go.  There’s no way the Democrats who live outside those 14 states with state exchanges are going to be able to continue to support the existence of Obamacare if all it means in their state is that poor people now are going to be penalized if they don’t buy health insurance, which is where we’re left by the ruling at the moment.

People may not know the way that the federal court system is set up, so let me give a brief explanation of what the significance of this ruling is.  Of course, there’s the federal Supreme Court and there are federal trial courts called District Courts.  There are at least one of those in every state.  Then between the Supreme Court and the District Courts there are what are called Circuit Courts of Appeal.  Of course, everybody knows, if you’re an American, you’re entitled to appeal a court decision you don’t like.  You’re not entitled to have the Supreme Court take your case.  They probably won’t even if you appeal to them even after you get through with the intermediate Court of Appeals.  That intermediate level Court of Appeals is called the Circuit Court of Appeals.

Most of the Circuit Courts of Appeal have jurisdiction over a handful of states.  The DC Circuit Court of Appeals, on the other hand, is often called the second-most important court in America.  The reason is that since it’s in DC, it’s the one with appellate jurisdiction over all the administrative agencies like the EPA and IRS and all those.  Essentially it’s the one that Health and Human Services — it’s the one that issued this Halbig ruling about the federal government not being able to give people subsidies in states that don’t have state health insurance exchanged under Obamacare.

A three-judge panel at the DC Circuit Court of Appeals, which is the typical appellate panel of a Circuit Court of Appeals, decided this case.  Now, if you’re the administration, what you can do from there is you can either appeal that ruling to the Supreme Court, or you can appeal it to what’s called the DC Circuit Court [unintelligible].  Instead of just letting the decision from the three judges of the DC Circuit Court stand, you can appeal to all the judges on the DC Circuit Court.  I want to say there are 13 judges on the DC Circuit Court of Appeals.  When the DC Circuit Court or any other federal circuit court gets an appeal, what happens is that three of the judges on that court are randomly selected to be the ones who decide the case.  Again, if you’re the losing party after the appeal, you can ask that all the judges on that court hear the case.

It’s not yet known whether the Obama administration is going to ask that all 13 judges on the DC Circuit Court reconsider the three-judge panel’s decision, or if it’s going to appeal to the Supreme Court.  I think it’s pretty obvious one thing, the Obama administration is definitely going to appeal this.  There’s no way they’re going to say: Okay, 36 states don’t have any exchanges and there’s no subsidy available to people there under Obamacare.  This isn’t the end of it, but it’s a very bad omen for the Obama administration.

It seems to me very obvious that the panel got the case right.  The language of the Obamacare statute does say that subsidies will be available to people that purchase insurance from the state exchanges.  It doesn’t say anything about a federal exchange.  The idea here was supposed to be that the Obamacare statute would encourage states to set up state insurance exchanges to be the mechanism for granting these subsidies and it came back to bite them.

End Mike Church Show Transcript