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What does cheap pizza have to do with health care — other than if you eat too much, you might need to see a doctor?
Apparently, it’s the perfect metaphor to explain why a key provision in the Affordable Care Act is legal.
That’s what we heard from Democratic National Committee Chairwoman Debbie Wasserman Schultz. During a July 22 Las Vegas TV appearance, the Florida congresswoman discussed two new dueling court decisions on the health care law.
She said the court that sided with President Barack Obama’s administration made a compelling, albeit cheesy, argument.
"The language in the Fourth Circuit actually compared if you buy a pizza from Pizza Hut to a pizza from Dominoes," Wasserman Schultz said. "And if you ask for ham and pepperoni on your Pizza Hut pizza, but then I actually go get your pizza from Domino’s, it’s implied if I bring back a pepperoni and ham pizza, then that’s what you asked for."
Hold the sauce! Is this really what the court said, or did Wasserman Schultz slice the ruling? Let’s take a look.
On Tuesday, two appeals courts issued rulings on whether the federal government had the authority to provide subsidies for people who purchased coverage on the federal government’s health insurance marketplace. Why is that an issue?
The government directed each state to set up a marketplace where insurance providers could sell policies to uninsured residents. But if a state decided not to take this step, the federal government said it would step in and do it for them. As it stands, only 14 states are operating their own exchanges.
Many of the people purchasing coverage in these marketplaces are low-income residents who are unable to afford policies without assistance. To help pay for coverage, the federal government provides subsidies in the form of tax credits to buy insurance.
But, as written, the law says that the subsidies apply to insurance bought on exchanges "established by the State." In a 2-1 decision, the U.S. Court of Appeals for the D.C. Circuit said that clause means people in the 36 states without state-based exchanges cannot buy discounted policies. If upheld, millions of people would have to pay more for their policies or lose their coverage.
Just hours later, however, the U.S. Court of Appeals for the Fourth Circuit issued its own decision in a similar case. In a 3-0 ruling, the court said that the way the law is written is at worst ambiguous, and that the Obama administration interpreted the law in a "permissible" fashion. That means everyone who’s bought the discounted policies would still get the credits.
In a concurring opinion, Judge Andre Davis said he supported the Fourth Circuit Court’s decision to side with the Obama administration.
But he didn’t see the law as that ambiguous.
Quoting from the law, Davis wrote that the Department of Health and Human Services was instructed to "establish and operate such exchange within the State and … take such actions as are necessary to implement such other requirements." Giving Health and Human services the power to operate "such" an exchange also gives them the ability to provide tax credits, Davis wrote.
Davis then served up this pizza-ordering scenario, presumably experienced by every college student at one time or another:
"If I ask for pizza from Pizza Hut for lunch but clarify that I would be fine with a pizza from Domino’s, and I then specify that I want ham and pepperoni on my pizza from Pizza Hut, my friend who returns from Domino’s with a ham and pepperoni pizza has still complied with a literal construction of my lunch order. That is this case: Congress specified that Exchanges should be established and run by the states, but the contingency provision permits federal officials to act in place of the state when it fails to establish an Exchange."
Got it? More importantly, did Wasserman Schultz get it?
First, and this is critical, Wasserman Schultz implied this was the opinion for the Fourth Circuit Court. It’s not. This is a concurring opinion from one judge who agreed with the ultimate decision, but added his own twist that wasn’t endorsed by the entire panel. That’s key.
The second issue is pizza semantics. Wasserman Schultz said that if you order a pizza from Pizza Hut, it doesn’t matter where it comes from, as long as you get the toppings — ham and pepperoni — on the pizza you ordered.
That’s not exactly what Judge Davis said. In Davis’ scenario, the person said in advance they wanted Pizza Hut, but they would be okay with Domino’s.
Without that distinction, the pizza could also come from Papa John’s. Davis did not say Papa John’s would be okay, and we also have to note that Papa John’s does not offer ham as a topping (though a spokesman said patrons could order its foreign brother, Canadian bacon).
Wasserman Schultz said the Fourth Circuit Court in its ruling wrote, "If you ask for ham and pepperoni on your Pizza Hut pizza but then I actually go get your pizza from Domino’s, it’s implied if I bring back a pepperoni and ham pizza then that’s what you asked for."
This wasn’t the ruling of the entire three-member court, just one judge’s concurring opinion. And she did miss the distinction that the person ordering the pizza said in advance they wanted Pizza Hut, but would be "fine with a pizza from Domino’s."
We rate the statement Mostly True.
NBC News 3, Ralston Report interview with Rep. Debbie Wasserman Schultz, July 22, 2014
United States Court of Appeals for the District of Columbia, Halbig v. Burwell, July 22, 2014
United States Court of Appeals for the Fourth Circuit, King et. al. v. Burwell, July 22, 2014
SCOTUS Blog, "Commentary: The fate of the Obamacare subsidies in the Supreme Court," July 23, 2014
Vox.com, "Why a federal court just ruled Obamacare subsidies are illegal in 36 states," July 22, 2014
Email interview with Darryl Carr, spokesman for Papa John’s International, July 23, 2014
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