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Halbig And King: A Simple Case Of IRS Overreach


May 22nd, 2014

On March 25, a three-judge panel of the D.C. Circuit heard oral arguments in Halbig v. Sebelius, one of four lawsuits challenging the legality of implementing certain ACA provisions in the 34 states with federally established health insurance Exchanges. On May 14, a panel of the Fourth Circuit heard arguments in a related case, King v. Sebelius. Rulings in these cases could come at any time.

Washington & Lee University law professor Timothy Jost recently provided commentary on Halbig, King, and two similar cases. Since our research helped to generate these lawsuits, Health Affairs Blog invited us to respond, as we have responded to Jost’s previous commentary on this issue.

The ACA Authorizes Certain Provisions Only in States that Establish Exchanges

The Halbig cases, as we will call them, are simple and straightforward.

Prof. Jost has written, and we agree, that the statutory eligibility rules for the ACA’s premium-assistance tax credits “clearly say” that eligibility “depends on the applicant being enrolled in a qualified health plan ‘through an Exchange established by the State.’” The rules employ that restrictive phrase nine times, without deviation. Since the Act explicitly ties its cost-sharing subsidies, employer-mandate penalties, and (in many cases) individual-mandate penalties to the availability of these tax credits, it therefore also authorizes those provisions only in states that establish Exchanges. Congress simply did not authorize those spending and revenue measures in the 34 states that opted for a federal Exchange.

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The Illegal IRS Rule To Expand Tax Credits Under The PPACA: A Response To Timothy Jost


August 1st, 2012

Last week, we posted a draft of our forthcoming Health Matrix article, “Taxation without Representation: the Illegal IRS Rule to Expand Tax Credits under the PPACA,” at the Social Sciences Research Network web site. Here’s the abstract: The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying […]

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