In King v. Burwell in my opinion, we have an instance where individuals are trying to use an Obamacare loophole to their advantage, a nice change from the other stakeholders that have been using loopholes up till now (providers, government, insurance companies). The case is going to be considered by the Supreme Court.
Loopholes are in the law, Cons are tricks persuading someone through deception: Loopholes are nouns describing ambiguities in laws that are used to achieve a person’s desired outcome whereas CONS essentially trick people. For me, King v. Burwell is a measure of whether a consumer loophole or a government con will prevail.
Loopholes are Nothing New In Obamacare: When it comes to Obamacare, there’s been no shortage of loopholes used by other stakeholders to promote their self-interests. From insurers finding ways to increase costs for their bottom lines (as in the case of the family glitch) to employers avoiding providing health insurance options to their employees by reducing employee hours, to providers raising their prices and requiring more up-front payments from consumers or opting out of Obamacare plans, we’ve already lived the experience of other stakeholders’ workarounds to get their way with Obamacare.
Cons are Nothing New in Obamacare: One could argue as I often do that the entire Obamacare was “sold” to us through a series of selective truths and significant omissions and even outright lies…THE CON.
At this point few would argue that consumers were well-informed about Obamacare and what it would really mean for consumers as we listened to the repetition of the new Utopia where most people would be able to purchase insurance, no one could be denied health insurance because of pre-existing conditions and how such insurance would be “better” with its new preventive care and essential benefits provisions in health insurance policies.
In 2013 many of us had a rude awakening as provisions of Obamacare for 2014 began coming into play, conveniently after the President’s re-election, with the imposition of the individual mandate, the new expenses we faced with insurance policies that raised deductibles, copayments and/or coinsurance, lost access to plans we formerly had, and so on.
Loopholes and Unintended Consequences are Nothing New in Obamacare: King v. Burwell is NOT the first time we’ve seen allegedly unanticipated consequences of the PPACA, (Affordable Care Act, Obamacare) where the text of the law and its results supposedly didn’t match up with the law’s intent…The LOOPHOLE. In those prior instances we saw no governmental rush to fix the loophole but instead actually saw the government DEFEND THE UNINTENDED CONSEQUENCE BY SAYING THAT IT WAS JUST FOLLOWING THE LAW.
So it was in 2013 when Harry Reid, Obamacare zealot had his staff enroll in Obamacare plans but managed to preserve the federal contribution to such plans which is about 72 percent reimbursement of premiums, not quite what the rest of us see. Reid’s defense was, “We are just following the law,” (See CNN, 12/4/2013, “Some Reid staffers exempt from Obamacare exchanges,” Chris Frates.)
So it was in 2013 when the Obamacare “Family Glitch” surfaced that was used by insurance companies to make the purchase of family health insurance unaffordable to some individuals, “The Obama administration says its hands were tied by the way Congress wrote the law,” “Obamacare 'Glitch' Allows Some Families To Be Priced Out Of Health Insurance,” Ricardo Alonso-Zaldivar, 1/30/2013, Huffington Post.
So it was even when the President was called on the failure of the “Keep your plan if you like it provision,” his solution was a plan that “…does not require the insurance companies to take back the Americans they kicked off, but does give them the option of taking the customers back if they want,” “Obama announces 'keep your plan' Obamacare fix,” Liz Goodwin and Olivier Knox, 11/14/2013, Yahoo News, basically saying, “Do what you want,” to insurance companies.
Yet, in King v. Burwell, the government is attempting to deny the use of a loophole to consumers through the con of saying it’s not a loophole at all. Suddenly the what-can-we-do-it’s-what-the-law-says approach is no longer reasonable.
The Con and the Loophole are both driven by self-interest: One of the benefits the Obamacare zealots have enjoyed when it comes to Obamacare publicity is that they manage to frame and defend government action in some romantic Robin Hood-y inaccurate way claiming they’re on the side of citizens.
But the Robin Hood scenario has not played out in reality for consumers when it comes to Obamacare. Instead, the individual responsibility aspects of Obamacare designed to save insurance payers whether the government or private insurers have hammered many of us who face higher premiums, higher copayments, higher coinsurance payments and higher deductibles…Our increased cost is called our “individual responsibility,” hardly Robin Hood-y.
Consistent with the reality versus the promise of Obamacare, the con, there must be something we missed, something we were tricked about when we were being told about the new Utopia with everyone having affordable health insurance, never being denied for pre-existing conditions, saving money on health insurance, blah, blah.
And of course there was PLENTY that we missed like all those increased payments, the individual tax penalty, the increase in payroll taxes by letting previous tax breaks expire, the increase in thresholds necessary to obtain the medical deduction, and on and on, all making health insurance coverage more affordable for the GOVERNMENT as payer, not for us.
As a matter of fact we realized that the individuals who were newly entitled to federal premium tax credits and those covered by Medicaid expansion who were going to be financed by the federal government by getting additional money from the rest of us were just about the only ones benefiting from Obamacare financially.
Similarly, the seeming utopia of more people getting free money under the IRS’ “interpretation” of its own provision allowing it to pay federal subsidies for enrollees through federally facilitated exchanges is being explained in Robin Hood-y terms by the government…The government doesn’t want to deny individuals this money. Does that make sense without looking at the government’s self-interest based on how Obamacare has unfolded to date? It does not.
And naturally there is enormous government self-interest in their argument in Burwell. This isn’t a conspiracy theory but was laid out in the January 2015 Congressional Budget Office Report, “Updated Estimates of the Insurance Coverage Provisions of the Affordable Care Act,” where we find on page two that the report states:
“The estimated net costs in 2015 stem almost entirely from spending for subsidies that are provided through insurance exchanges and from an increase in spending for Medicaid,” but “An offsetting amount…from penalty payments, additional revenues resulting from the excise tax on certain high-premium insurance plans, and the effects on income and payroll tax revenues and associated outlays arising from projected changes in coverage offered through employers.” (CBO report page 2).
So to offset the government’s subsidy and Medicaid costs of Obamacare the government gets money from penalty payments…That’s why the government doesn’t want the loophole in the ACA, because it would REDUCE the number of people who would be bound by the individual mandate (penalty, tax revenue to the government) if they didn’t buy health insurance if those individuals were not obliged to include the amounts they could get in federal premium subsidy dollars to help them exceed the income/cost of health insurance threshold. Without those premium subsidies these individuals would be exempt from having to purchase health insurance…The individual mandate.
But, couldn’t one argue that the government is in King v. Burwell advocating paying out MORE in premium tax credits which is good for consumers even if it is just to keep enrollment and the pool of potential penalty payers up, you know a Robin Hood-y argument? No, for two reasons.
First because the ACA has limits to how much money the government will spend on subsidies so even if enrollment keeps growing subsidy payments will not keep going up. [“The ACA specifies that if total exchange subsidies exceed a certain threshold in any year after 2017—a condition that CBO and JCT expect may be satisfied in some years—people will be required to pay a larger share of premiums in the following year than would otherwise be the case, thus restraining the amount that the federal government pays in subsidies,”] CBO report page 3, http://www.cbo.gov/sites/default/files/cbofiles/attachments/49892-breakout-AppendixB.pdf).
The second reason is that right now the government has EXTRA MONEY for premium payments because according to the CBO, “Lower estimated enrollment in coverage obtained through the exchanges in every year accounts for the majority of the $28 billion reduction in the estimated cost of premium assistance tax credits.”(CBO report page 11, http://www.cbo.gov/sites/default/files/cbofiles/attachments/49892-breakout-AppendixB.pdf).
That’s the con, it’s not about the government wanting to pay people subsidies but about getting people into Obamacare which after 2017 they’ll still be in and will possibly be paying greater amounts in premiums anyway and if they choose not to buy health insurance they’ll be on the hook for the individual tax penalty payment.
The consumers in Burwell are also pursuing self-interest. They want to use the text of the ACA to apply a loophole in order to obtain their personal goal of not having to purchase health insurance or face the individual tax penalty. Currently, the only way to avoid the penalty is if you qualify for one of the many exemptions under the Act. These consumers want to be included in an exemption based on the fact they can’t afford health insurance by stating that even though they can afford health insurance with premium tax credits they shouldn’t be getting those tax credits and therefore they actually cannot afford health insurance.
SELF-INTEREST NOT NOBILITY: In King v. Burwell, neither side has “noble” goals when it comes to King v. Burwell, it’s simply a selection of whether the loophole or the con gets its way.
The loophole is the consumer trying to avoid the individual mandate by saying he/she shouldn’t have been eligible for premium tax credits to begin with and the con is the government’s claim that it doesn’t want people to “lose” health insurance because of the lack of premium tax credits rather than admitting that those premium tax credits are a way of bringing more people into the net of individuals covered by the individual mandate which supplies revenue for the Affordable Care Act.
Intent May Be Relevant But it Doesn’t Change the Law, Or DOES IT?: In the King v. Burwell case the issue is whether the language of the IRS Rule 36B can be “interpreted” by the IRS to extend premium tax credits to enrollees via any Exchange in spite of the language of 36B. While intent may or may not be relevant, the government’s argument of intent that it suddenly goes with in spite of other instances where the government claimed the text of the law prevailed is not only inconsistent and unfair but deceptive, and therefore part of the CON because the language is clear in IRS 36B and was composed by the IRS and should not therefore be “expanded” by the IRS just because it wants to implement the law differently from the way it was written.
Can a government that couldn’t do anything about the family glitch, or the if you like your plan you can keep it, or the Harry Reid situation suddenly claim that intent is paramount in the case of the clear language of IRS Rule 36B? It can only if it’s perpetrating a con for its own benefit.
IF YOU’RE PRO-CONSUMER YOU SHOULD SUPPORT THE NON-AVAILABLITY OF PREMIUM TAX CREDITS UNDER THE ACA FOR INDIVIDUALS ENROLLED THROUGH FEDERALLY FACILITATED EXCHANGES:
King v. Burwell is an instance where David, the individual is going up against Goliath, the government and where though neither have “noble” intentions, I side on the side of the consumer. We need to know how our laws are implemented and if loopholes can only be used by every other stakeholder besides consumers.
