Full of holes

Republican Judge Orders Obamacare Defunded

by Ian Millhiser

Much of the Affordable Care Act must be defunded and millions of Americans must lose their health insurance, according to an opinion issued Tuesday by Judge Ronald A. White, an Oklahoma federal judge appointed to the bench by George W. Bush. White’s opinion reaches the same result reached by two Republican appeals court judges in a similar case, although that decision was later withdrawn by the full appeals court. To date, nine federal judges have considered this question of whether much of the law should be defunded. Only three — all of whom are Republicans — have agreed that it should be.

The theory behind this lawsuit, Pruitt v. Burwell, is that although the Affordable Care Act gives states a choice between setting up their own health insurance marketplaces or permitting the federal government to do it for them, health exchanges run by the federal government cannot provide subsidies to help insurance customers pay for their insurance. Should this theory ultimately be embraced by the courts, it will likely trigger a “death spiral” of premium spikes that will drive more and more consumers out of the insurance market, until the markets eventually collapse. As ThinkProgress previously explained, the thrust of the plaintiffs legal argument in this and similar cases is that Obamacare “is supposed to create barren health exchanges where little or no health insurers offer exorbitantly priced insurance that hardly anyone can afford,” and that it was supposed to create these useless exchanges despite the fact that the law explicitly states that it will achieve “near-universal coverage by building upon and strengthening the private employer-based health insurance system.”

There are many flaws in this legal theory, and we lay out several of them here and here. Nevertheless, it is worth noting a few flaws in Judge White’s legal reasoning that appear unique to his own opinion.

One thing that immediately stands out in White’s opinion is just how thin his legal reasoning is. Despite the fact that this case concerns a matter of life and death for the millions of Americans he orders uninsured, his actual discussion of the merits of this case comprises less than 7 double-spaced pages of his opinion. In that brief analysis he quotes the two other Republican judges who ordered Obamacare defunded, claiming that “the government offers no textual basis” in the Affordable Care Act itself for treating federally-run exchanges the same as those run by states. In fact, the government has identified numerous provisions of the law which cut against the argument that only some exchanges should provide subsidies.

Even more significantly, White’s opinion does not at any point acknowledge the legal standard that applies when a statute contains language that is at odds with other provisions of the law. As the Supreme Court explained in 2007, “a reviewing court should not confine itself to examining a particular statutory provision in isolation” as the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” White, by contrast, relies entirely a passage that supports the plaintiffs’ arguments while ignoring the much more prevalent statutory language that supports the government’s argument.

Instead of following Supreme Court precedent, White relies heavily on analysis from a very ideological law professor. Though White’s analysis is quite short, he devotes much of it to a lengthy quote by Professor Richard Epstein, a prominent conservative academic who agrees that Obamacare should be defunded. Epstein has also described Supreme Court opinions establishing the fact that Medicare is constitutional as “catastrophic, ignorant, and uninformed decisions.” So he is a very odd source for a federal judge to rely upon in assessing the correct state of the law.

Towards the end of his opinion, White claims that the reading he gives to the Affordable Care Act — a reading which assumes that the lawmakers who enacted this politically contentious law intended to give every Republican governor in the country the power to blow up one of its central functions in their state — is not “absurd” because “it could reflect the sort of compromise that attends legislative endeavor.” Yet the only evidence he provides that Congress may have intended to “compromise” by giving Rick Perry the power to destroy Obamacare in Texas is a now-infamous quote by Professor Jonathan Gruber. Gruber is an economist who consulted with Congress in designing the law. In 2012, nearly two years after the Affordable Care Act became law, Gruber was recorded giving a talk where he said that “if you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.”

Yet, while Gruber did indeed utter these words and they may seem damning out of context — to the extent that a statement made by a non-lawmaker long after a statute becomes law is useful in assessing the lawmakers’ intent — Judge White probably should have watched the entire video where Gruber made this statement before he cited the statement as evidence of how Obamacare was supposed to function. Here is the Gruber quote in context:

Yes, so these health insurance exchanges . . . will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law it says if the states don’t provide them the federal backstop will. The federal government has been sort of slow in putting up its backstop, I think, partly because I think they want to sort of squeeze the states to do it. 

I think what’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits — but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges.

Read in context, Gruber’s infamous quote takes on an entirely different meaning. It suggests that he was concerned that some people may not get insurance subsides because “federal government has been sort of slow in putting up its backstop” not because the law forbids federally-run exchanges from providing subsidies. To the contrary, Gruber explains, “[i]n the law it says if the states don’t provide them the federal backstop will.”

So White’s opinion is poorly reasoned. It ignores binding Supreme Court precedent. And it engages in selective quotation to support his conclusion. If it is reviewed by a panel of judges interested in neutrally applying the law, White will be reversed.

There is no guarantee, however, that the judges who review White’s decision will be able to set aside their partisan preferences, whatever they may be. Indeed, one of the leading attorneys spearheading these attacks on the Affordable Care Act recently told a reporter that he believes he is going to win because he does not expect to “lose any Republican-appointed judges’ votes.”

White’s opinion suggests that this attorney may be correct that judges will vote their political party, rather than voting the law when they decide this and similar cases.