Obamacare Subsidies Upheld By Supreme Court Ruling
The highest court handed down a 6-3 ruling upholding one of the crucial components of the Affordable Care Act, preserving the subsidies for Americans receiving insurance on the federal exchange, and dealing a decisive blow to Republican opponents of the law, for whom the case, King v. Burwell, was a last-ditch effort to kill the legislation.
The majority opinion, authored by Chief Justice John Roberts, said, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”
This latest — and presumably final significant — challenge to the ACA was a nakedly political case that hinged on four words of the law that were widely acknowledged to be a careless, sloppy mistake.
The plaintiffs in King v. Burwell alleged that subsidies offered to low- and middle-income Americans buying insurance on federal exchanges were not permitted under the legislation as it was passed. The exact wording of the statute says subsidies are only available to those who purchase insurance on exchanges “established by the State.”
The words make little sense in context with the rest of the legislation — since the federal exchanges only exist for people who live in states that did not set up their own exchanges.
“The Affordable Care Act contains more than a few examples of inartful drafting,” according to the majority opinion. “When read in context, the phrase ‘an Exchange established by the State […]’ is properly viewed as ambiguous.”
The majority opinion found that:
the Act’s context and structure compel the conclusion that … [the section in question] allows tax credits for insurance purchased on any Exchange created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.
In his dissent, Justice Antonin Scalia wrote that to interpret the phrase “Exchange established by the State” to mean “Exchange established by the State or the Federal Government […] is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.” Further, the majority opinion was a “defense of the indefensible.”
Words no longer have meaning if an Exchange that is not established by a State is “established by the State.”
[…] Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.
Scalia accused the six Justices in the majority of performing “somersaults of statutory interpretation” in defense of the law.
This is a characteristic backflip from Scalia, who in a 1989 concurrence in the case of Green v. Bock Laundry, had no trouble justifying a departure from the strict definition of a word, when interpreting the phrasing literally produced an undesirable and unintended result:
We are confronted here with a statute which, if interpreted literally, produces an absurd, and perhaps unconstitutional, result. […]
I think it entirely appropriate to consult all public materials, including the background of [the Rule at issue] and the legislative history of its adoption, to verify that what seems to us an unthinkable disposition […] was indeed unthought of, and thus to justify a departure from the ordinary meaning of the word “defendant” in the Rule.
Photo: Will O’Neill via Flickr
This story has been updated.