With the president mobilizing for a barnstorming tour in support of massive tax hikes and to, in effect, overturn last week’s vote to keep the House in GOP hands and the gavel in John Boehner’s —details here on the president’s plan— the GOP is getting organized in the House and laying down markers.
The media is focused on speculation about the “big deal” and the various scandals, but a huge story is brewing that few are watching.
The deadline for the most important political and legal decisions of the near term is being made in every state: Whether or not to establish a state health insurance exchange pursuant to Obamacare. The original deadline for each governor to decide was this Friday, but HHS has graciously given the states another month to decide which poison to pick: Subservience via establishment of a puppet exchange or takeover of the state’s insurance business via a big foot federal health exchange. The rules the feds have dictated the states must follow in making their choice are here.
Yesterday, Governor Robert Bentley of Alabama announced that Alabama would not be establishing the exchange or expanding Medicaid. The latter is not surprising, as the expansion will quickly eat away at state budgets.
But Bentley’s position on the exchange –he joins at least Alaska, Florida and Texas in just saying no– is very welcome and hopefully a model for other Republican governors who must by law indicate their decisions on the exchange set-up by mid-December. Other states ought also to study the example set by Oklahoma, and sue to overturn the Hobbesian choice on exchanges being forced on them.
Only one state lawsuit against the forced choice on health exchanges has been filed —by the Sooners’ AG, and the amended complaint is here— and the national opposition to Obamacare should be looking for other governors to say no and other attorneys general to file similar challenges to the health exchange jam down.
II. The New Claims8. In addition to that claim, Plaintiff raises new claims seeking declaratory and injunctive relief with respect to final federal regulations (the “Final Rule”) that were issued under Internal Revenue Code Section 36B, as added by Section 1401 of the Act, while proceedings in this action were stayed. The Final Rule was issued in contravention of the procedural and substantive requirements of the Administrative Procedures Act (“the APA”), 5 U.S.C. § 702; has no basis in any law of the United States; and directly conflicts with the unambiguous language of the very provision of the Internal Revenue Code it purports to interpret.
9. More specifically, Sections 1311 and 1321(c) of the Act allows States to choose to establish an “American Health Benefit Exchange” to operate in the State to facilitate execution of the Act’s key provisions. If a State elects not to establish an Exchange under Section 1311, Section 1321(b) authorizes the Secretary of Health and Human Services to create an Exchange to operate in that state.
10. Under the Act, this choice has important consequences for the State’s people and the State’s economy, because health insurance premium tax credits for low-income employed individuals and employer obligations under the Act both depend on which alternative the State chooses. If the State elects to establish its own Exchange, the Federal Government will make “advance payments” of premium tax credits to insurance companies on behalf of some of the State’s residents to subsidize health insurance enrollment through the State-created Exchange, but the payment of the subsidy for even one employee triggers costly obligations on the part of the employer that would not be triggered in a non-electing State, placing the electing State at a competitive disadvantage for jobs and job growth.
11. The Act leaves this policy judgment to each State and provides a mechanism for each State to choose the alternative it thinks is better for its people. The Final Rule upsets this balance by providing, contrary to the Act, that qualifying taxpayers are eligible for premium tax credits and “advance payments” if they enroll for health insurance through the Exchange where they live, regardless of whether it is a State-established Exchange or an HHS-established Exchange. Thus, if the Final Rule is permitted to stand, federal subsidies will be paid under circumstances not authorized by the Congress; employers will be subjected to liabilities and obligations under circumstances not authorized by Congress; and States will be deprived of the opportunity created by the Act to choose for itself whether creating a competitive environment to promote economic and job growth is better for its people than access to federal subsidies.
12. Oklahoma has not established or elected to establish an Exchange, and does not expect to do so. As a result, under the plain terms of the Act, employers in Oklahoma should not be subject to the Employer Mandate because of a determination that an Oklahoma resident employed by the employer in Oklahoma is entitled to advance payment of a premium tax credit because of enrolling for coverage through an Exchange established by HHS to operate in Oklahoma. However, the Final Rule purports to make such an individual eligible for a premium tax credit based on enrolling for coverage through an Exchange established by HHS to operate in Oklahoma, with the result that an Oklahoma employer employing such an individual will be exposed to liability under the Employer Mandate under circumstances not provided for under the Act. Thus, Plaintiff seeks declaratory and injunctive relief declaring the Final Rule invalid.
This is a narrow argument aimed at a specific rule, but there are other arguments to make, including the damage done to federalism when, upon saying no, the enormous supertanker of Obamacare sails into a state’s legal harbor via the federal exchange and smashes all the docks and other ships, displacing not merely the opportunity to run an exchange but destroying countless other state-administered relationships and regulatory balances.
States have to defend themselves against the giant takeover of states’ powers and duties by Obamacare. The decision to “just say no” so has to be taken by mid-December. Encourage your governor to say no and to sue alongside of Oklahoma, perhaps engaging one of the country’s leading experts on structural federalism like Georgetown’s Randy Barnett or my own colleague at Chapman John Eastman to make the arguments to preserve the state’s legislative integrity and their independence from D.C. Not only is this the right way to proceed for a state intent on protecting its citizens from an ever-expanding federal government, it may also present the Supreme Court with a second bite at the Obamacare apple via a different set of issues not dependent on the “is the penalty a tax” debate.
Some states are tired of the fight and their law departments not eager to spend another year battling the DOJ.
But that isn’t their choice. That choice belongs to their governor and their attorney general. Those who don’t choose to fight now cannot expect conservatives to fight for them in the future. Go Churchill or go home.
The left is attempting to declare the Obamacare fight over. It isn’t. It is a 15 round fight. Conservatives won rounds when they elected Chris Christie, Bob McDonnell and then Scott Brown after the debate was begun. The left won a round when the law passed was passed, and it won a round when the Supreme Court upheld the individual mandate, but conservatives won in that opinion as well, on Medicaid and on the reach of the Commerce Clause.
The left scored a knock-down with the president’s re-election, but the fight isn’t over if the conservatives opposed to the law get up off the canvas and fight on. Oklahoma has, and some states have joined them, though not yet in the courts. They should, and soon. Obamacare was nightmare before the election, and it is a nightmare still. The president’s re-election was manifestly not about Obamacare, and the decision is not final and won’t be until every good argument is made and every opportunity given the Supreme Court to review the law in full.
Even if the legal fight should fail, it is important for federalism that many states pass on becoming puppets of the feds via the state exchanges. The fiasco-in-waiting of the federal exchange should be on the president’s head, with blame not easily shifted to bungling governors. The president broke it, so he should buy and operate it.
But only after every argument has been made, and the Supreme Court offered the opportunity to rule on the law as a whole.