The final reply brief from the ACA troofers has been filed. The first thing you’ll notice is that — once again — the brief gives off the aura of flop sweat because it italicizes a ludicrous number of words for no obvious reason. (Maybe Carvin bills extra for every word he can emphasize.) The content, alas, deserves no better.
Of the many bad arguments in the brief, this one is already getting attention for good reason:
The Government emphasizes that subsidies help expand the risk pool. If the IRS Rule is vacated, it claims, states served by HHS Exchanges would see increased premiums, reduced enrollment, and ultimately “death spirals.” Even if that were true (but see p.20, infra), these consequences are the result of the IRS Rule, not the statute. Had the IRS from the start made clear that subsidies were limited to state Exchanges, states would not have overwhelmingly refused to establish them. Indeed, Congress had no reason to doubt that all (or virtually all) states would establish Exchanges to ensure citizens’ eligibility for subsidies.”
This is some world-class ass covering — if millions of people lose their insurance, don’t like at us, we didn’t do it! It would have worked without the I.R.S.! (Perhaps it was the I.R.S. paying Michael Cannon to travel all over the country telling states not to establish exchanges too.) The problem, as Ian says, it that this is absolutely absurd. The idea that states that turned down the Medicaid money wouldn’t have refused to establish exchanges doesn’t make any sense. And there’s the additional remaining problem that these “threats” were not communicated to the states by anybody, and nor did any states receive them, even though everyone understood the consequences of refusing the Medicaid expansion.
In addition, Carvin continues to argue that “the Government claims it was “clear” that some States would not establish Exchange, but that is false.” The sole relevant piece of evidence for this is the Robert Pear story we’ve discussed before — in other words, all they have is an unsupported bare assertion that makes no sense on its face and has been disproven repeatedly. (They also mention that the federal exchanges weren’t funded, but explain themselves why this is irrelevant when they note that HHS was able “to turn to a general “administrative expenses” fund.) But, hell, don’t believe me — believe what Carvin wrote in his first brief:
Section 1321 of the Act therefore recognizes that some states may not be “electing State[s],” because they may choose not “to apply therequirements” for an Exchange or otherwise “fai[l] to establish [an] Exchange.” To address that scenario, ACA § 1321(c) directs the Department of Health and Human Services (“HHS”) to “establish and operate such Exchange within the State.”
So Carvin initially acknowledged the obvious — that the federal backstop was established because Congress anticipated that some states would not establish their own exchanges — but handwaved it away by inventing a farcical just-so story in which Ben Nelson demanded that the federal exchanges not be allowed to work. With that bit of magical realism having been foreclosed by Nelson himself, Carvin is reduced to arguing that a federal backstop was established…for no reason whatsoever. Sure.
Also consider this bit of nonsense:
In stark contrast, no member of the ACA Congress identified subsidies as critical to a “three-legged stool” or said that Exchanges absent subsidies would cause “adverse selection” or trigger “death spirals.” Rather, as the Government emphasized in NFIB, the individual mandate was justified on these grounds, “[a]s demonstrated by the experience of States that attempted [insurance] reforms without a minimum coverage provision.”
First of all, as Hogan observes, Jonathan Gruber’s 2012 YouTube videos are considered by Carvin to offer an authoritative interpretation of the statute even though they contradict the interpretations of every other relevant actor (including the non-2012 Gruber.) But when it comes to what was necessary for the exchanges to work — something far more relevant to Gruber’s expertise than the policy choice of whether the default exchanges should be state or federal — apparently his views are irrelevant. The only questions he can’t be cited on, apparently, are those respecting the concept he invented.
But let’s say we should ignore Gruber, which I certainly wouldn’t object to. The rather obvious problem is that even if you make the assumption that only the mandate and not the subsidy is necessary to the “three-legged stool” necessary to prevent a death spiral, it’s beside the point given that eliminating the tax credits effectively eliminates the mandate, since the vast majority of people subject to the mandate would have to pay more than 8% of their household incomes without the subsidy. So, in fact, subsidies are crucial to the three-legged stool either way, and it’s absurd to assume that Congress set up a federal backstop that was intended not to work.
I’ll have a longer piece tomorrow about why the ACA’s opponents persist with a narrative about the statute that’s obviously untrue, but their continued (if muted) reliance on the Moops-invaded-Spain theory is profoundly embarrassing.
…so, so hacky:
— Brian Beutler (@brianbeutler) February 19, 2015