D.C. District Court Judge Friedman (Clinton Appointee) Rejects Challenge to Obamacare Federal Exchange Subsidies

There’s a lot to absorb in Wednesday’s opinion, but I can’t get past this analysis:

Why would Congress have inserted the phrase “established by the State under [42 U.S.C. § 18031]” if it intended to refer to Exchanges created by a state or by HHS? But defendants [the government] provide a plausible and persuasive answer: Because the ACA takes a state-established Exchange as a given and directs the Secretary of HHS to establish such Exchange and bring it into operation if the state does not do so. See 42 U.S.C. §§ 18031(b)–(d), 18041(c). In other words, even where a state does not actually establish an Exchange, the federal government can create “an Exchange established by the State under [42 U.S.C. § 18031]” on behalf of that state.

I’m certainly no expert at this point on the relevant provisions, and maybe if I went back and read all the cited language this would make more sense to me. But for now, the idea that “an exchange established by a state” can in practice be “an exchange established by the Federal Government on behalf of a state” seems to me to do violence to the English language. Of course, after C.J. Roberts’ opinion in NFIB, such concerns may no longer be decisive. Or maybe this is why the Democrats were so intent on getting three new nominees on to the D.C. Circuit?

UPDATE: This, from the comments, seems right to me: “A s1321 Fed Exchange is a s1311 Exchange. But it still isn’t a s1311 exchange established by the state, which is what is necessary to get the tax relief. It’s a s1311 exchange established by the Feds, because the state has failed to … establish an exchange.”

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