Halbig and King: a timeline

11/19/2014 10:00:00 AM
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You've probably heard about the Halbig and King lawsuits over Obamacare. These are two lawsuits arguing that because the section of the ACA that specifies the formulas for calculating subsidies says "Exchange established by the State"--with no mention one way or another of exchanges established by the federal government for states that opt not to do it themselves--the law prohibits subsidies from being paid to customers on any federally-administered ACA exchange. King v Burwell is now headed to the Supreme Court, and the impact on the US healthcare system could be huge and immediate.

A big part of the public argument on Halbig and King (though perhaps less important as far as actual legal arguments go) is whether Congress intended for customers on federal exchanges to be eligible for the subsidies. I'm not sure I've seen anyone actually cross the political aisle here: Democrats think Congress intended for them to get the subsidies, Republicans think that denying them subsidies was intended as a way to incentivize states to create their own exchanges. I take issue with debates over what Congress "intended" because Congress is not a person, so lets amend this to an answerable question: at the time the bill passed the Senate, did any individuals believe that the subsidies would not be available on the exchanges, and did any people believe that they would?

What's weird about this question is that there's basically no evidence. I searched the google archives from 2009 and 2010. Not one result about the ACA included an explicit comment about the availability subsidies on the federal exchanges. As best I can tell, not one person in the English-speaking world had even considered the question at the time the bill was signed into law. So while it is false to say that Congress (or anyone) intended to deny subsidies on the federal exchanges, it is equally false to say that they intended to provide subsidies on the exchanges. No one had considered what would happen to subsidies if any states opted not to establish an exchange. So when did Halbig first become a thing?

Sarah Kliff's interview with Michael Cannon, who helped craft the argument that would become the plaintiffs' cases in Halbig and King, helps shed some light on the timeline here.

23 March 2010
President Obama signs the Patient Protection and Affordable Care Act into law. It's language provides formulas for subsidies for plans purchased on "an Exchange established by the State"--there having been no mention anywhere of whether or not this provision applies to federal exchanges as well.

December 2011
More than a year after the law has passed, conservative activists meet at the American Enterprise Institute to brainstorm legal strategies to weaken the ACA. One attendee presents on the faulty language in the section that explains the formulas for calculating subsidies. To Michael Cannon's recollection, this is the first ever mention of that.

March 2011
Jonathan Adler does a presentation on the same theme at the University of Kansas. According to Cannon, many health economists and experts were in attendance at Adler's presentation (Was Jonathan Gruber?).

15 July 2011
HHS issues the first draft of ACA regulations for public comment. One of those regulations is a clarification on the calculation of subsidies in ACA exchanges, saying that:
"The definition for an “Exchange” in §155.20 is drawn from the statutory text in section 1311(d)(1) and 1311(d)(2)(A). We interpret section 1321(c) of the Affordable Care Act to mean that this definition includes an Exchange established or operated by the Federal government if a State does not establish an Exchange."

January 2012
Jonathan Gruber, architect of the Massachusetts health reform and econometric consultant for part of the ACA, gives a talk in which he mentions that the subsidies would not be available on federal exchanges, and implies that this was intended to incentivize states to create exchanges.

16 July 2012
Jonathan Adler and Michael Cannon coauthor a paper laying out the legal case against subsidies on federal exchanges.

2 May 2013
Several businesses file a law suit that would become known as Halbig v Burwell.

16 September 2013
Several Virginia residents file the lawsuit that would become known as King v Burwell.

7 November 2014
The Supreme Court grants certiorari in the King v Burwell case.

Update: Adrianna McIntyre pointed me to this from a while back, where she already covered most of the points above.