Myths & Facts: Half-Baked Obamacare Lawsuits Edition


Right-wing media continue to pretend that dozens of conservative lawsuits challenging various provisions of the Affordable Care Act (ACA) are principled legal challenges to supposed overreach from the Obama administration. In reality, these lawsuits are radical attacks on well-established law, and have been widely rejected by both legal experts and the courts.

Halbig v. Sebelius

MYTH: Exchange Lawsuits Are Not An Extreme Right-Wing Attempt To Destroy Obamacare

The Washington Post: New WaPo Blogger Takes Credit For "The Case That Could Topple Obamacare." After acquiring the conservative and libertarian legal blog "The Volokh Conspiracy" in the wake of losing Wonkblog's Ezra Klein, the new WaPo outlet immediately hyped right-wing lawsuits that argue the government doesn't have the authority to provide tax credits to consumers who purchase insurance through the federal exchange. Because many Republican-governed states refused to set up state-run healthcare exchanges, consumers in those states had to turn to the federal exchange for insurance plans, which could not function without tax credits:

These cases could also have a significant impact on PPACA implementation. Newseek labeled Halbig "the case the could topple Obamacare." That headline may have involved a bit of hyperbole, but only a bit.  The reason is that, contrary to the expectations of most PPACA supporters, a majority of states refused to set up their own health insurance exchanges. Thus, if the challenges succeed and the IRS rule is struck down, there will be no federal tax credits or cost-sharing subsidies for the purchase of qualifying health insurance plans in a majority of states.


It was only later that some, such as my co-author Michael Cannon, realized how these provisions interacted with other portions of the statutes, and how they could affect PPACA implementation if, as it came to pass, a majority of states refused to play along. And it was only after the IRS proposed its rule purporting to authorize tax credits in federal exchanges that Michael and I began making the case that the IRS was acting beyond the scope of its delegated authority. As has also become clear, the IRS only belatedly considered whether it actually had the authority to issue such a rule in light of the statutory text. Given the tension between the statutory text and the IRS rule, litigation was inevitable if (as we also argued) there were plaintiffs who could demonstrate standing to sue.

The IRS offered no meaningful defense when it promulgated its rule -- just a cursory and rather conclusory paragraph -- but several prominent academics and legal commentators offered defenses on the IRS's behalf, including Tim Jost, Abbe Gluck, Sam Bagenstos, and Simon Lazarus. [The Washington Post, The Volokh Conspiracy Blog, 1/22/14]

FACT: The Courts Agree, These Lawsuits Are An Absurd Distortion Of Law

Salon: Federal Judge Throws Out "Bogus, Opportunistic" Lawsuit. In a recent ruling, the judge in Halbig rejected the argument that it was unlawful for the IRS to provide subsidies in states that don't offer their own exchange:

[T]he short version is that if you take one phrase of the Affordable Care Act statute out of context, it appears as if the law does not provide for premium tax credits on federally facilitate exchanges. Conservatives are thus asking the courts to invalidate and prohibit Obamacare subsidies in all states.

Well, a D.C. District Court judge has looked at this argument, and concluded that it's total nonsense.

"In sum, while there is more than one plausible reading of the challenged phrase ... when viewed in isolation, the cross-referenced sections, the surrounding provisions, and the ACA's structure and purpose all evince Congress's intent to make premium tax credits available on both state-run and federally-facilitated Exchanges."

It's just one trial court opinion. But it's actually pretty embarrassing for the challengers.

In a case like this, courts use a two step test to determine whether a federal agency is faithfully administering a statute. First, they examine the text of the statute to determine whether there's any ambiguity to it. If there's no ambiguity, then the government must do what the law clearly states. If the text is ambiguous, though, judges must determine whether the agency's interpretation is plausible.

Obamacare opponents would have won if the judge in question -- a Clinton appointee -- had vouched for their interpretation of the statute, or had found the text ambiguous, but declared the IRS' reading impermissible.

But neither of those things happened. Instead, the judge didn't just rule that all exchanges qualify for subsidies, but that in full context there's no statutory ambiguity to begin with.

The challenge is based on a bogus, opportunistic characterization of the law. [Salon, 1/15/14]

See more on right-wing media's coverage of these exchange lawsuits herehereherehere, and here.

Little Sisters Of The Poor v. Sebelius

MYTH: Obama Is Forcing Catholic Nuns To Violate Their Faith

Fox News: Obama is a "Congressionally-Enabled Tyrant." In a January 16 segment on Fox & Friends, Fox's senior judicial analyst Judge Andrew Napolitano discussed Little Sisters of the Poor v. Sebelius, a lawsuit filed by Catholic nuns who believe the contraception mandate in the ACA violates their religious faith. Napolitano railed against the Obama administration for requiring religiously-affiliated organizations like Little Sisters of the Poor to sign a certification form that would confirm their exemption from the contraception mandate, calling it "reprehensible" and referred to the president as a "Congressionally-enabled tyrant":

FACT: Little Sisters For The Poor Are Already Eligible For A Religious Exemption From The Contraception Mandate

Constitutional Accountability Center: Little Sisters Are Exempted "With A Stroke Of The Pen." Despite what right-wing media have consistently suggested, the nuns at Little Sisters of the Poor are already exemptible from the contraception mandate -- all they need to do is sign a form asserting their religious and moral objections to the mandate:

Far from manifesting hostility to religion, the Affordable Care Act's contraceptive coverage rules offer generous accommodations to the tenets and practices of churches and religiously-affiliated non-profit organizations. 


The Obama Administration also crafted a second accommodation applicable to religiously-affiliated organizations, such as universities and health care and other service providers. Generally, the ACA requires employers that offer a group health plan to ensure that their plans provide coverage for certain preventive health care and services for their employees, without requiring plan participants to make copayments or pay deductibles or coinsurance. However, when it comes to contraceptives, any religiously-affiliated organization -- such as the University of Notre Dame or the Little Sisters -- may, with the stroke of a pen, exempt itself from the legal obligation to pay for contraceptive coverage to which it has a religious objection. The ACA regulations provide that, to obtain an exemption, the organization must (1) have "religious objections" to "providing coverage for some or all of any contraceptive services required to be covered;" (2) operate as a non-profit entity; (3) hold itself out as a "religious organization;" and (4) sign a self-certification. The organization's employees -- such as a physics professor at the University of Notre Dame or a physician at Georgetown University Hospital, who may not necessarily share in the employer's religious beliefs -- will still be entitled to contraceptive coverage, but the insurance company, not the religious organization, will be responsible for paying the insurance costs and administering the insurance plan.

The regulations further provide that, on signing the certification, a religious organization is not required to "contract, arrange, pay, or refer for contraceptive coverage." To that end, on receiving a signed certification, the health insurance carrier or third-party administrator must, on its own, "provide separate payments for any contraceptive services required to be covered ... for plan participants and beneficiaries" or, in the case of a self-insured group health plan, opt to arrange for a third-party to provide such payments. To further accommodate religiously-affiliated nonprofit organizations, the ACA regulations prohibit an insurance carrier from "impos[ing] any cost-sharing requirements" or "impos[ing] any premium, fee, or other charge" on the objecting organization. Under this accommodation, employees who want and need access to the full range of contraceptives will still obtain the health care coverage they need, but no religiously-affiliated organization will have to pay for or administer the coverage against its will. In short, by signing the certification, a religiously-affiliated organization can ensure, as the district court judge in the Notre Dame case put it, that "it will have nothing to do with providing contraception." [Constitutional Accountability Center, 1/16/14]

See more on right-wing media's coverage of the Little Sisters case here, here, and here.

Hobby Lobby / Conestoga Wood Specialties v. Sebelius

MYTH: Corporations Are "Persons" Capable Of Religious Belief And Conscience

Bloomberg: Contraception Mandate Is An "Attack On Religion." The question at issue in the Hobby Lobby and Conestoga cases is whether for-profit, secular corporations are exempt from the contraception mandate just because their owners are religious. Although the Supreme Court ruled in Citizens United that corporations do have limited constitutional rights, the Court has never held that they are "persons" capable of religious belief or worship. In an editorial for Bloomberg entitled "War on Contraception? No, an Attack on Religion," NRO editor Ramesh Ponnuru argued in favor of corporate religious freedom:

From reading the New York Times, you might think that religious conservatives had started a culture war over whether company health-insurance plans should cover contraception. What's at issue in two cases the Supreme Court has just agreed to hear, the Times editorializes, is "the assertion by private businesses and their owners of an unprecedented right to impose the owners' religious views on workers who do not share them."

That way of looking at the issue will be persuasive if your memory does not extend back two years. Up until 2012, no federal law or regulation required employers to cover contraception (or drugs that may cause abortion, which one of the cases involves). If 2011 was marked by a widespread crisis of employers' imposing their views on contraception on employees, nobody talked about it.

What's actually new here is the Obama administration's 2012 regulation requiring almost all employers to cover contraception, sterilization and drugs that may cause abortion. It issued that regulation under authority given in the Obamacare legislation.

The regulation runs afoul of the Religious Freedom Restoration Act, a Clinton-era law. That act says that the government may impose a substantial burden on the exercise of religious belief only if it's the least restrictive way to advance a compelling governmental interest. The act further says that no later law should be read to trump this protection unless it explicitly says it's doing that. The Affordable Care Act has no such language.

Is a marginal increase in access to contraception a compelling interest, and is levying steep fines on employers who refuse to provide it for religious reasons the least burdensome way to further it? It seems doubtful. [Bloomberg, 12/1/13]

FACT: Corporate Position Could Very Well Violate Religious Freedom of Employees

Washington Post: "These Cases Pose A Grave Threat To Religious Liberty" Of Employees, Not Corporations. According to Frederick Mark Gedicks, a law professor at Brigham Young University Law School, Hobby Lobby and Conestoga do have the potential to violate religious freedoms for Americans -- just not in the way right-wing media think:

The businesses in these cases are not churches, or even nonprofit hospitals or universities with religious affiliations. They are instead a construction company and a chain of arts and crafts stores. Nevertheless, their owners claim that contraceptive coverage poses a grave threat to their religious liberty.

These cases indeed pose a grave threat to religious liberty, but not to the owners of these businesses. Exempting ordinary, nonreligious, profit-seeking businesses from a general law because of the religious beliefs of their owners would be extraordinary, especially when doing so would shift the costs of observing those beliefs to those of other faiths or no faith. The threat to religious liberty, then, comes from the prospect that the court might permit a for-profit business to impose the costs of its owners' anti-contraception beliefs on employees who do not share them by forcing employees to pay hundreds of dollars or more out-of-pocket each year for contraception and related services that should be covered under the law.

The First Amendment's Establishment Clause prevents the government from requiring people to bear the burdens of religions to which they do not belong and whose teachings they do not practice. To be sure, the United States government should accommodate religious beliefs and practices, but only when doing so does not impose significant burdens on others. We accommodate, for example, those who religiously object to sending their children to public school; no one is hurt if these families opt for a private school or home-schooling.

On the other hand, the Supreme Court consistently has condemned government accommodations of religion that shift the cost of practicing a religion from those who believe it to others who don't. For example, the court struck down a state law that gave employees an absolute right not to work on their chosen Sabbath because of the burden it imposed on others. If most employees were Christian and took Sunday off, the statute would have forced the remaining non-Christian employees to work every Sunday. This, the court said, violated the Establishment Clause: "The First Amendment ... gives no one the right to insist that in pursuit of their own interests, others must conform their conduct to his own religious necessities."

If the court agrees and grants these businesses the religious exemption they seek, it essentially will be directing the women who work for these businesses to bear the cost of the owners' anti-contraception religion. [The Washington Post, 1/15/14]

See more on right-wing media's coverage of the corporate religion cases here, here, and here.

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