“Obamacare Survives! The King v. Burwell Saga Ctd.

In a 6-3 decision penned by Chief Justice John Roberts, the Supreme Court once again upheld the Affordable Care Act against attack by forces committed to its destruction–interest groups that seem absolutely convinced that our country is better off when millions and millions of people do not have health insurance.

The decision in King v. Burwell, about which I have previously blogged, rejects the argument of the attacking forces that the text of the ACA only permits the federal government to offer subsidies to people who buy their health insurance on state exchanges, not the federal exchange.  A contrary decision would have been a spear through the heart of the act, depriving millions of people who purchase insurance on the federal exchange of subsidies.

As expected, Justices Scalia, Thomas and Alito dissented.

I’ll have more on this very important decision later.

UPDATE:  The majority’s decision is fairly straightforward.

The issue in this case is whether the Act’s tax credits are available in States that have a Federal Exchange rather than a State Exchange.   The Act initially provides that tax credits “shall be allowed” for any “applicable taxpayer.”  26 U. S. C. §36B(a).  The Act then provides that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through “an Exchange  established by the State under section 1311 of the Patient Protection and Affordable Care Act [hereinafter 42 U. S. C. §18031].” 26 U. S. C. §§36B(b)–(c) (emphasis added).

The fight in the case was over whether the italicized language limited subsidies only to purchasers of insurance on state exchanges.  The majority agrees that the plain language of Section 36B, read in isolation, supports that proposition.  But statutory language must not be read in isolation; it must be interpreted in context.  The majority concludes that when interpreted in the context of the entire ACA, Section 36B is ambiguous.  The court then explains:

Given that the text is ambiguous, we must turn to the broader structure of the Act to determine the meaning of Section 36B. “A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme . . . because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.”  United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd., 484 U. S. 365, 371 (1988). Here, the statutory scheme compels us to reject petitioners’ interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very “death spirals” that Congress designed the Act to avoid. See New York State Dept. of Social Servs. v. Dublino, 413 U. S. 405, 419–420 (1973) (“We cannot interpret federal statutes to negate their own stated purposes.”). (Emphasis supplied.)

The court concludes with the following statement:

In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined—“to say what the law is.”  Marbury v. Madison, 1 Cranch 137, 177 (1803). That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done.  A fair reading of legislation demands a fair understanding of the legislative plan. Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.  If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.

The dissenters, led by Justice Scalia, accuse the justices in the majority of rewriting the ACA, not interpreting it.

The Court holds that when the Patient Protection and Affordable Care Act says “Exchange established by the State” it means “Exchange established by the State or the Federal Government.”  That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.

Of course, if you read Section 36B in isolation, Justice Scalia’s dissenting opinion has some merit.  But as he has said many times in many decision over his decades on the Supreme Court, statutory language must be interpreted in context.  For Justice Scalia and his dissenting colleagues, the prospect that their “plain meaning” interpretation of Section 36B would lead to the wholesale destruction of the act through “death spirals” was irrelevant.  Tough luck.  That’s a problem for Congress, not the Supreme Court to fix:

Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitation of tax credits to state Exchanges. If Congress values above everything else the Act’s applicability across the country, it could make tax credits available in every Exchange.  If it prizes state involvement in the Act’s implementation, it could continue to limit tax credits to state Exchanges while taking other steps to mitigate the economic consequences predicted by the Court.  If Congress wants to accommodate both goals, it could make tax credits available everywhere while offering new incentives for States to set up their own Exchanges.  And if Congress thinks that the present design of the Act works well enough, it could do nothing. Congress could also do something else altogether, entirely abandoning the structure of the Affordable Care Act. The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude.

* * *

The Act that Congress passed makes tax credits available only on an “Exchange established by the State.” This Court, however, concludes that this limitation would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.

“SCOTUScare.”  Nice touch Justice Scalia.  (I’m being facetious.)

FURTHER UPDATE:  Here are some links, listed by author, to commentaries on the Supreme Court’s decision.

1. The Supreme Court Reaffirms the Social Contract: The ACA as a Framework Statute (by Jack Balkin)

2. In King v. Burwell, Chief Justice Roberts rewrites the PPACA in order to save it (again) (by Jonathan Adler)

3. Is Judicial Restraint More of a Method, or an Effect? (by Richard Re)

4. Congress has a “plan” and the Court can understand it – The Court rises to the challenge of statutory complexity in King v. Burwell (by Abby Gluck)

And see the “snap symposium” on the decision at SCOTUSBlog.



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