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Halbig v. Sebelius: The Case that Threatens that ACA’s Survival You Probably Haven’t Heard About

As an income-less medical student, I would be one of the now 7.1 million people who have signed up for Obamacare for this year. Except I live in Texas, one of nearly half of all states that elected to not expand Medicaid. At the same time, I don’t have enough of an income to qualify for federal subsidies, making insurance from the Marketplace unaffordable. As such, the individual mandate — the part of the law that taxes those without insurance as a motivator to get insured — does not apply to me. Putting aside the irony of the medical student unable to pay for medical insurance, nearly five million people also fall in the same coverage gap.  Now, that coverage gap faces a very real risk of growing to a coverage Grand Canyon, engulfing those who qualify for federal subsidies.

A group of small business owners funded by the conservative nonprofit public policy organization the Competitive Enterprise Institute, is fighting a battle in courts that would deny the federal subsidies that are the main driver of the ACA, affordable insurance, to 12.5 million Americans that qualify for the subsidies of an average of $5,290 per person.

The case, Halbig v. Sebelius, ostensibly supports the cause of small businesses who face penalties if they don’t provide employee insurance, and thus they argue, economic development. They claim that the IRS did not have the rights to extend the federal penalty nor subsidy, a federal tax credit, to states which did not create their own state run health insurance marketplace. The case is made on the wobbly stalk of evidence that the congressional intent was only for the subsidy to be available to the states because of one quote from the law that authorizes federal subsidies for coverage from an “Exchange established by the State under section 1311.” Only 14 states have managed to do so, which would leave the majority of states with hollow shells of a federally managed insurance marketplace if there were not a federal subsidy. On top of that nonsensical establishment of an exchange which offers no subsidy, 87% of federal exchange participants in 34 states are receiving federal financial assistance. If Halbig v. Sebelius were to ruled in favor of the plaintiffs, these millions of people would lose the assistance, joining me in the group of people pondering what a waste of time this political maneuvering is when effectively no new options are on the table.

Although the federal subsidies survived the first round of litigation in a district court this January where the court ruled in favor of the IRS, the fate of the ACA now rests in the hands of the three judges of the D.C. Court of Appeals. A ruling is expected later this spring.  Never mind that the fate of the massive investments of political willpower to overhaul the biggest health system in the world rests in the hands of 3 district court judges.  Never mind the polarizing ideologies of the groups behind the case: that the owner of the plaintiff restaurant companies is president of the San Antonio Tea Party. Never mind that amidst the years of confusion about the legality, implementation and rumors, the majority of the uninsured and likely missed the enrollment deadline. Never mind that we now live in an age when our elected officials are quoting the Machiavellian puppet master of “House of Cards” when referencing the disingenuous congressional mishandling of Medicare reimbursement.   What we should mind is that while the chaos of health system reform stymies the country, the powers continue to rest on their laurels with the notion that America has the best health care in the world.  But really what they should say is that they will not rest until the bounty of America’s health care remains restricted solely to those with money.

Rachel Solnick Rachel Solnick (2 Posts)

Contributing Writer Emeritus

Baylor College of Medicine

Rachel is a Class of 2015 medical student at the Baylor College of Medicine in Houston, Texas.