Like the recent Supreme Court decision in Hobby Lobby, the D.C. Circuit’s ruling earlier this week in Halbig v. Burwell is being hailed by conservatives and bemoaned by liberals as a death knell for Obamacare. Unlike the decision in Hobby Lobby, however the D.C. Circuit’s ruling is not the end of the matter, and many liberals are finding hope in the ruling of the 4th Circuit the same day, the probability of an en banc hearing in the D.C. Circuit, and the ultimate possibility of a favorable Supreme Court decision. In an earlier post in HealthLawProf, I decided to take seriously the possibility of damage control from a limited reading of Hobby Lobby. It is pretty much universally agreed—and I believe correctly—that it is not possible to do similar damage control by giving a limited reading to Halbig v. Burwell. If the ruling stands, that tax subsidies are not available to people purchasing coverage through the exchanges in the states that are letting the federal government do the work, many important other provisions of the ACA will be untenable, including the penalties for large employers not offering insurance whose employees receive subsidies and likely the individual mandate itself. But I think it is possible to undermine Halbig in a way not generally recognized by the liberal critics who argue (correctly) that the statutory provision at issue is ambiguous: argue that the jurisprudence of the majority opinion in Halbig is internally inconsistent. Here’s how. Continue reading
By Guest Contributor Diana R. H. Winters
Legal commentators have spent a lot of time this week sparring over statutory interpretation and the contrasting readings of the ACA by the Halbig and King courts. The potential consequences of these cases demonstrate just how high the stakes of this enterprise can be.
With less fanfare, the Second Circuit decided a case yesterday that may too have large consequences for the health and welfare of the public. In NRDC v. EPA, the court reversed a district court’s decision to require FDA to hold hearings on the withdrawal of approval for the use of two antibiotics—penicillin and tetracyclines—in animal feed. This issue has enormous public health consequences, but the consequences of this case extend beyond antibiotic use, to agency practice in general. The opinion sanctions egregious agency delay and a tremendous lacuna in decision making.
By Greg Curfman and Holly Fernandez Lynch
It was as if lightning had struck twice in the same place.
On Tuesday two pivotal federal circuit court opinions that could dramatically impact the future of Obamacare were unexpectedly issued within hours of each other. And what’s more, the two opinions reached opposite conclusions on the same question, setting the stage for further appeals and possible Supreme Court review, potentially bringing the Affordable Care Act (ACA) before the high court for the third time since its passage.
At issue in both circuit court cases was the legality of providing subsidies in the form of Internal Revenue Service tax credits for the purchase of health insurance on the federal exchange (Healthcare.gov).
In a decision that stunned Obamacare supporters–but elated opponents–a three-judge panel of the Federal Appeals Court for the DC Circuit ruled in Halbig v. Burwell that the purchase of health insurance on the federal exchange may not be subsidized by IRS tax exemptions. This judgment would leave millions of Americans with earnings between 133% and 400% of the federal poverty level without affordable health insurance, and it would also threaten the viability of the employer mandate.
In contrast, in a unanimous (3-0) opinion in a nearly identical case, King v. Burwell, the Federal Appeals Court for the Fourth Circuit in Richmond, VA, came to the opposite conclusion.
By Abbe Gluck
I had hope to take a day off blogging about Halbig and King (the ObamaCare Subsidies cases), but I cannot allow another new, and inaccurate, narrative about ObamaCare to take hold. Over at Volokh, Ilya Somin argues that the holding in Halbig is not absurd because Congress uses statutory schemes all the time that try to incentivize states to administer federal law (and penalize them if they don’t). It is true we see schemes like that all the time–Medicaid is a prime example–but the insurance exchange design at issue in these cases is NOT one of them. This federalism argument was made before the D.C. Circuit and even Judge Griffith didn’t buy it in his ruling for the challengers. I tried to dispel this myth back in March, when I wrote the following on Balkanization. As I said there, this isn’t Medicaid—it’s the Clean Air Act.
As most readers know by now, two federal appeals courts on Tuesday reached the opposite conclusions about the validity of the critical financial subsidies on the ACA’s federal health insurance exchanges. The Fourth Circuit in Virginia upheld the subsidies—indicating the government had the better argument, but regardless applying the longstanding rule that when a statute is not clear, courts defer to the agency administering the statute (in this case, the IRS). The D.C. Circuit, however, ruled the other way, reading one provision of this massive and complex federal law out of context. That opinion not only misinterprets the statute—with enormous practical consequences—but also does a deep disservice to conservative jurists and lawyers who have spent the last 30 years arguing that text-based interpretation is sophisticated, not literalistic, and serves democracy.
The stakes are enormous: If the D.C. Circuit’s opinion ultimately carries the day, more than $36 billion dollars in financial relief will be denied to the approximately 7 million people expected to be insured with the help of this financial assistance. It also places Republicans in a real dilemma, especially as the election cycle heats up: The result, if the ruling stands, would be massive red-state/blue-state disparity, as millions of middle-class Americans are deprived in red states of access to medical care, because it is mostly the red states whose subsidies are now at issue.
As I wrote yesterday on Balkinzation, the opinion is terribly disappointing from a statutory interpretation perspective. It relies in part on irrelevant legislative history (from the HELP committee, whose bill wasn’t even the basis for these provisions–the Finance committee’s was) and gets it wrong anyway (as I argued here); it bends over backwards to come up with reasons why Congress might have intended this result (which we all know it certainly did not); and it attaches far too much significance to a line in the statute that expressly deems exchanges in the territories to be state exchanges and does not replicate the special deeming language for the federal exchanges. The territories language is boilerplate language used by Congress when talking about territories in statutes even beyond the ACA, and should have been attached no significance here.
For a more detailed legal and political analysis, check out my op-ed on the cases.
In a video interview with Reuters in conjunction with Harvard School of Public Heath’s Health Reform Watch, Petrie-Flom Center Executive Director Holly Fernandez Lynch analyzes the impact of the Supreme Court’s recent decisions in Hobby Lobby and Wheaton College.
To watch the interview please click here.
By Gregory Curfman
Tom Goldstein, Publisher of SCOTUSblog, has opined on why Justice Stephen Breyer apparently joined the majority opinion in Wheaton College v. Burwell, which the Court released last Thursday. The majority granted Wheaton a temporary injunction exempting the College from the contraceptive mandate, which was spawned by the Affordable Care Act and which the College claimed violates its religious principles. The vote was 6 to 3, with Justice Scalia filing a concurrence (agreeing “in the result”) and Justices Sotomayor, Ginsburg, and Kagan issuing a forceful dissent. The opinion was unsigned, leaving ambiguous whether Justice Breyer actually did join the majority, though the numbers leave little doubt that he did.
Tom Goldstein believes that Justice Breyer joined the majority because, in doing so, he gained more than he lost. In addition to granting the College an injunction, the majority opinion also states that nothing in the opinion prohibits the government from taking steps to provide women access to contraceptive agents without a copayment. The specific language in the opinion is:
“Nothing in this order precludes the Government from relying on this notice, to the extent it considers it necessary, to facilitate the provision of full contraceptive coverage under the Act.”
Thus, Tom Goldstein believes that in joining the majority, Justice Breyer accomplished the pragmatic objective of preventing the loss of contraceptive coverage for the nation’s women who are employed by nonprofit organizations.
Without comment from Justice Breyer himself, we of course cannot know why he (presumably) joined the majority in Wheaton College v. Burwell, despite the fact he dissented when the Court granted Wheaton College a brief (two-day) injunction earlier in the week. And despite the fact that he also joined Justices Ginsburg, Sotomayor, and Kagan in issuing a very strong dissent in Hobby Lobby v. Burwell. Continue reading
By Gregory Curfman and Holly Fernandez Lynch
[A quick follow up to our recent NEJM Perspective on the case, with I. Glenn Cohen]
Immediately after Justice Samuel Alito’s announcement on June 30 of the majority opinion in Burwell v. Hobby Lobby, the Supreme Court took further actions on the contraceptive mandate, and both supporters and opponents of the opinion were furiously assessing the implications and impact of what has proved to be a wild week for women’s access to contraception.
A report from the IMS Institute last April found that 24 million more prescriptions for oral contraceptives without a copayment were written in 2013 (when the contraceptive mandate was in full effect) than in 2012 (when it was not). This translates into a savings of $483 million for women (on average $269 per person). The percentage of women with no out-of-pocket costs for contraceptives increased from 14% to 56%. What will be the impact of the Supreme Court’s decision in Hobby Lobby on these trends?
The Hobby Lobby opinion is quite clear that the contraceptive mandate, spawned by the Affordable Care Act, may not be enforced against closely held, for-profit companies with religious objections to paying for contraceptives coverage. In other words, such companies will not face the hefty fines for noncompliance that would otherwise be imposed by the Department of Health and Human Services.
The opinion does not, however, apply to religious-affiliated, nonprofit organizations, such as Catholic schools or religious charities. For such organizations that object to paying for contraceptives coverage, the applicable regulation provided an accommodation by which the entities themselves were off the hook, but instead their insurers (or in the case of self-insured organizations, a third party administrator) would be required to provide free contraceptives coverage without cost to either the employee or the employer. In order to be eligible for this accommodation, the nonprofit entity must complete a form designating its objection and provide a copy to its health insurance issuer or a third party administrator. A number of nonprofits filed lawsuits asking that they be exempt from even this requirement, on the grounds that they were still being required to violate their religious beliefs by deputizing someone else to provide the objectionable services. One such group, the Little Sisters of the Poor in Colorado, a group of nuns who perform charity work, was granted an injunction by the Supreme Court last January.
Nadia N. Sawicki
Did HHS shoot itself in the foot by providing an accommodation to religious non-profits?
In holding that the contraceptive mandate imposed by HHS on Hobby Lobby and Conestoga Wood was not the “least restrictive alternative” for providing no-cost contraceptive coverage to women, the Supreme Court pointed to the accommodation HHS recently provided to religiously-affiliated non-profit corporations. Under the accommodation, “eligible organizations” such as religiously-affiliated hospitals and universities can avoid funding insurance coverage for contraceptives if they certify that they have a religious objection to providing such coverage. In such cases, the eligible organization’s insurance issuer must exclude contraception from the organization’s group health insurance plan, and instead provide a separate issuer-funded contraceptive plan directly to employees. Given that such an accommodation is already in place for some employers, the Supreme Court noted, “HHS itself has demonstrated that it has at its disposal an approach that is less restrictive than requiring employers to fund contraceptive methods that violate their religious beliefs.”
One obvious problem with the Court’s assertion, noted in Justice Ginsburg’s dissent, is that the Court expressly declined to determine whether such an accommodation would in fact be permissible under RFRA. Given the challenges to the accommodation-by-certification requirement already brought by organizations like Little Sisters of the Poor, it is far from clear that the current composition of the Supreme Court would uphold this requirement if faced with a direct challenge.
A second, perhaps less obvious, concern about the Court’s proposal that the eligible employer accommodation be extended to for-profit corporations is that HHS may now regret providing it – and as a result, HHS may refrain from making similar accommodations in the future, which would be a significant loss to defenders of religious freedom.
Nadia N. Sawicki
Courts evaluating First Amendment and RFRA claims have long held that they are in no position to evaluate the validity, centrality, or reasonableness of a claimant’s sincere religious beliefs. And while there is room for courts to evaluate whether a claimant’s beliefs are indeed “sincere,” many courts shy away from doing so because of a perceived overlap between judgments about centrality and about sincerity.
In Hobby Lobby, the sincerity of the corporation’s beliefs was not in dispute. Hobby Lobby asserted (and HHS accepted the claim) that it had a sincere religious belief that life begins at conception, and that this belief prohibited it from facilitating access to contraceptives that operate after that point.
But recent news reports have shown that Hobby Lobby has, in fact, been involved in activities that seemingly run afoul of this belief – including investing in pharmaceutical companies that manufacture the contraceptives they raise objections to in their lawsuit, as well as drugs commonly used for abortion; investing in insurance companies that cover abortion and emergency contraceptives; and actually providing coverage for emergency contraception in their own health plan until 2012.
While these facts were not raised before the courts hearing Hobby Lobby’s RFRA claims, First Amendment precedent suggests that they would be relevant to a judgment about the sincerity of Hobby Lobby’s religious beliefs. Surely a company that believes life begins at conception would have more difficulty demonstrating the sincerity of its beliefs when some of its conduct supports activities that are in direct opposition to this stated belief. This is not to say that a court would ultimately conclude that Hobby Lobby’s religious beliefs were insincere – but rather, that a court could legitimately consider these facts without treading into the dangerous territory of judging the merits and centrality of Hobby Lobby’s beliefs to the exercise of its faith.
The proponents of the Affordable Care Act (ACA) tax subsidies law suits (currently pending in both the D.C. and Fourth Circuits and which I have discussed here, here, here, and here) have seized on the Court’s recent decision in Utility Air Regulatory Group v. EPA—going so far as to file letters of supplemental authority with both courts highlighting the case as additional relevant authority for the subsidies suits. We should hope that the courts understand the ACA—and the specifics of the subsidies challenge—well enough to understand how different these cases are. There is also much in Utility Air, not mentioned by the challengers, that supports the Government’s position in the ACA case, and that should resonate with even the most textualist of judges.
The ACA challengers’ filings and blog posts highlight the part of Utility Air in which the Court refused to let EPA “tailor” the Clean Air Act’s explicit pollution thresholds (raising them higher than the statutory allowance because greenhouse gas emissions are much greater than conventional pollutants). They also highlight the Court’s invocation of the so-called “major questions” rule—the presumption that Congress does not delegate decisions to agencies of vast economic and political significance without making that delegation clear.
The subsidies challenges present completely different facts. The issue in those cases is whether a line in the ACA that provides that the subsidies shall be available to individuals enrolled in insurance “through an Exchange established by the State under section 1311,” clearly also excludes individuals enrolled through federally-operated exchanges. The challengers have made this argument because more than half of the states are using federal exchanges and denying the subsidies on those exchanges would be lethal to the ACA’s operation. Both HHS and the IRS have interpreted the statute as providing the subsidies on the insurance exchanges operated by both the state and the federal governments. Their interpretation is based on the fact that numerous other provisions of the statute, as elaborated in the government’s briefings, would be nonsense and superfluous under the challengers’ reading. One of many possible examples is ACA §36B(f), which provides that: Continue reading
Cross post from healthlawprof blog
Since the likelihood is that many readers of this blog will be asked to comment when the Supreme Court, some time this week, announces its decision in Hobby Lobby and Conestoga Wood Specialty cases here’s a brief refresher and some links. The cases are challenges to the Affordable Care Act’s requirement that employers who choose to offer health insurance to their employees must provide policies that include ten essential benefits-including contraception. The U.S. Supreme Court has heard oral arguments and read the briefs—it’s likely that whatever opinion is issued will reflect at least some of the arguments presented to the Court.
This case is about the Affordable Care Act’s requirement that employers who offer their employees health insurance must include ten essential benefits, including contraception. Hobby Lobby and Conestoga Wood are privately held, for-profit companies whose owners have sincerely held religious objections to providing four specific kinds of contraception. They believe these contraceptives terminate rather than prevent pregnancy. Many religious organizations and companies have gotten exemptions to these requirements, but this case considers whether private, for-profit companies should qualify as well.
The cases raise three major issues:
- Does the Religious Freedom Restoration Act apply to corporations even though it uses the word “person?” (Can companies have religious beliefs?)
- Is providing insurance that covers birth control a “substantial burden?” on these two company’s’ religious beliefs?
- Does the government have a compelling reason for requiring companies that provide insurance to have it cover birth control?
The Journal of Law and the Biosciences, the new open-access journal launched this year by the Petrie-Flom Center and Harvard Law School in partnership with Duke University and Stanford University, has published several articles in recent weeks by Harvard Law School students:
- Nicholas Meyers, Cook v. FDA and the importation and release of lethal injection drugs, J Law Biosci first published online May 2, 2014.
- Ashish M. Bakshi, Gene patents at the Supreme Court: Association for Molecular Pathology v. Myriad Genetics, J Law Biosci first published online May 2, 2014.
- Adriana Lee Benedict, State-level legislation on follow-on biologic substitution, J Law Biosci first published online May 2, 2014.
- Komal Karnik, FDA regulation of clinical decision support software, J Law Biosci first published online April 28, 2014.
Check out these articles, and learn more about the Journal of Law and the Biosciences!
Art Caplan has coauthored a new opinion piece in the journal Pediatrics on the controversy over the case of Sarah Murnaghan, in which a federal judge ordered the Secretary of Health to place a pediatric patient on the adult transplant list to increase her chances of receiving a donor organ. From the piece:
Lung transplantation is a potentially life-saving procedure for patients with irreversible lung failure. Five-year survival rates after lung transplantation are >50% for children and young adults. But there are not enough lungs to save everyone who could benefit. In 2005, the United Network for Organ Sharing developed a scoring system to prioritize patients for transplantation. That system considered transplant urgency as well as time on the waiting list and the likelihood that the patient would benefit from the transplant. At the time, there were so few pediatric lung transplants that the data that were used to develop the Lung Allocation Score were inadequate to analyze and prioritize children, so they were left out of the Lung Allocation Score system. In 2013, the family of a 10-year-old challenged this system, claiming that it was unjust to children. In the article, we asked experts in health policy, bioethics, and transplantation to discuss the issues in the Murnaghan case.
Read the full article.
Nonmedical sex selection is a thorny topic. Usually used to favor males, it has harmed women and resulted in sex ratio disparities in India, China, and other nations where son preference is strong. Sex selection is also troubling because it relies on infanticide, abortion, or the discarding of embryos based on their sex.
Since sex ratio imbalances are not a danger in the United States and equal rights and opportunities for women, though imperfect, are increasingly well-established, nonmedical sex selection in some circumstances, e.g., for gender variety in a family, may be more acceptable. That position, however, runs into the claim that any deliberate choice or preference about the sex/gender of offspring, even for a girl, is inherently sexist or gendered (see Glenn Cohen’s recent post). That position, however, is controversial.
Professors Nicholas Bagley and Jonathan Adler had a very interesting discussion on Halbig v. Sebelius — the case challenging the legality of offering premium tax credits through federally facilitated exchanges (about which I have written previously here and here) — in a recent Federalist Society Podcast. One particularly intriguing question that emerged concerned the peculiar legislative history of the ACA, and what role that should play in how courts read the text of the law.
As Professor Abbe Gluck has summarized well, the text of the ACA features some sloppy drafting errors, largely due to the manner in which the bill became law:
[T]he ACA is a very badly drafted statute. And it’s badly drafted for a simple reason that turns out to be important to understanding how the pending litigation should be resolved: Because Senator Ted Kennedy died in the middle of the legislative process and was replaced by Republican Scott Brown, the statute never went through the usual legislative process, including the usual legislative clean-up process. Instead, because the Democrats lost their 60th filibuster-preventing vote, the version that had passed the Senate before Brown took office, which everyone initially had thought would be a mere first salvo, had to effectively serve as the final version, unchangeable by the House, because nothing else could get through the Senate. In the end, the statute was synthesized across both chambers by an alternative process, called “reconciliation,” which allows for only limited changes but avoids a filibuster under Congress’s rules.
I think it’s fairly clear that the D.C. Circuit in Halbig (and the 4th Circuit in King) are encountering one such sloppy drafting error. Without any meaningful legislative history suggesting that tax credits would be denied to citizens in states with a federally facilitated exchange, the ACA authorizes tax credits for individuals purchasing insurance on an “Exchange established by the State.” While the provision of the law instructing HHS to create federally facilitated changes requires the Secretary to “establish and operate such Exchange within the State” (i.e., the state exchange), the challengers argue that the words “established by the State” in the tax-credit provision preclude an interpretation of the law that allows for tax credits to flow through federal exchanges as well.
The reason I call this “sloppy drafting” rather than a purposeful command is that, aside from the striking lack of historical support for an interpretation denying tax credits on federally facilitated exchanges, this interpretation would be nonsensical when read into the law as a whole. To take only one of many examples, section 1312 of the ACA defines qualified individuals (i.e. those people who can purchase health insurance through an exchange) as individuals “who . . . resides in the State that established the Exchange.” If “established” holds the exclusive meaning that the challengers in Halbig say it does, there could never be a qualified individual in the states with federally facilitated exchanges because the State didn’t “establish the Exchange” in the State in which these individuals reside. In other words, nobody could purchase insurance through a federally facilitated exchange because nobody would be qualified. This would leave the federally facilitated exchanges with no purpose. As Judge Friedman found in federal district court, conventional canons of statutory interpretation should preclude such an absurd reading of the law.
For more information, visit the conference website.
Join us at Northeastern University School of Law at 1 p.m. on April 25, 2014 as leading academics and practitioners discuss the tensions between free speech and reproductive rights.
For more information, see http://www.northeastern.edu/law/academics/institutes/health-law/events/clashing-rights/
The New England Journal of Medicine features two excellent articles discussing the legality of the Obama administration’s various delays of provisions of the ACA. Unlike a great deal of the debate over this issue, these articles are nuanced and measured, and I highly recommend them.
Nicholas Bagley, a Professor at the University of Michigan Law School (and the author of a terrific new article in the Harvard Law Review), contends that the delays “appear to exceed the traditional scope of the President’s enforcement discretion.” He distinguishes the ACA delays from traditional enforcement discretion, such as the discretion to allocate resources in a sensible manner, in part because the ACA delays were made public and therefore served the purpose of encouraging regulated parties to violate statutory requirements. While Bagley admits that the administration has some support for its delay of the employer mandate in the IRS’s longstanding practice of affording “transition relief” to taxpayers from newly imposed taxes, he notes that transition relief has typically been brief and covered taxes of “marginal importance.” Finally, Bagley argues that the Obama administration’s ACA delays set a “troubling precedent” for future administrations that may be hostile to the law and desire to use similar levels of “enforcement discretion” to decline to enforce portions of the ACA that are “essential to the proper functioning of the law.”
Timothy Jost, a Professor at Washington and Lee University School of Law, and Simon Lazarus, Senior Counsel at the Constitutional Accountability Center, argue that the ACA delays are not refusals to enforce the law, but rather are unexceptional timing adjustments that Democratic and Republican administrations have historically used when implementing new, complex regulatory schemes. For recent precedent from the Republican Party, Jost and Lazarus point to the George W. Bush administration’s decisions to delay or limit enforcement of various provisions of the 2003 Medicare Modernization Act. And while they find no legal issues with the ACA delays as a matter of administrative law under Heckler v. Chaney or constitutional law under the Take Care Clause, they are careful to distinguish the plans of 2012 Republican candidate Mitt Romney to suspend enforcement of (at least certain parts of) the ACA. Those plans, they write, “would have been the kind of diktat that King George III had imposed on the pre-Revolution colonies and that the framers of the Constitution were intent on denying to the new American presidency.”
This guest cross-post first appeared on Slate.com.
This week, the Supreme Court hears oral argument in two cases asking whether for-profit business corporations have religious liberty rights. Hobby Lobby, a group of craft stores with 13,000 employees, and Conestoga Wood, a small Mennonite furniture maker, want to be free of the Obamacare requirement that employer-provided health insurance plans need to provide certain forms of birth control. They argue that their religious convictions prohibit them from covering such items. Religious institutions, reproductive-rights advocates, and others have sparred over the conflicting rights claims, but one important part of the conversation has been missing almost completely: Why are American employers deciding the contents of our personal health insurance plans?