ACA

  • March 7, 2015
    Guest Post

    by Rob Weiner, formerly Associate Deputy Attorney General In the United States Department of Justice, is a partner at Arnold & Porter LLP. This post first appeared at Balkinization.

    During the Supreme Court oral argument in King v. Burwell, the challengers persisted in claiming that the language of the Affordable Care Act is absolutely clear, that the principle of constitutional avoidance, as well as Chevron deference and any other relevant interpretive presumptions are unavailing because there is one and only one possible interpretation of the key provision at issue, Section 36B of the Internal Revenue Code.  That is in fact what the challengers must show—that their reading of the statute to deny subsidies in States with Federal Exchanges is incontrovertible. 

    But four Justices (apparently), the IRS, the Solicitor General, 22 States, and leading academic experts in statutory interpretation applying the definitions in the Act have read this same language to mean that tax subsidies are available in all States.  They have drawn this conclusion from the text of the Act itself, not by rewriting the language to promote the statutory purpose, but by giving it what they have concluded is a reasonable—in fact, compelling—interpretation.  Of course, the fact of a dispute regarding the meaning of statutory provisions does not by itself show the issue to be contestable.  But here, there is a critical mass of able, respected readers of the statute who differ with the challengers’ conclusion.  To label the interpretation by these readers as impossible, at odds with the English language, or nonsensical is to deny either their literacy or their candor.  Neither is in doubt. 

    As Justice Kennedy suggested during the argument, the clarity of the statute is also measured against the constitutional requisites of cooperative federalism.  That is another reason the Government should prevail in King.  As the challengers read the law, residents of States that fail to set up insurance Exchanges do not receive tax subsidies to help them afford health insurance, but those States remain subject to the insurance market reforms requiring insurance companies to offer insurance without regard to preexisting conditions and to price insurance based on community characteristics rather than the individual customer’s health situation.  If adopted, the challengers’ interpretation would send insurance markets in those States into a death spiral and impose hardships on millions of people. 

  • February 26, 2015
    Guest Post

    by Eric J. Segall, the Kathy and Lawrence Ashe Professor of Law, Georgia State University College of Law

    *This post is part of the ACSblog King v. Burwell symposium.

    The plaintiffs in the latest Obamacare case, King v. Burwell, to be argued next Wednesday in the Supreme Court, have (so far) pulled off an amazing magic trick right in front of the eyes of the American people and possibly the Supreme Court of the United States. They, along with Professor Jonathan Adler, the architect of the litigation strategy, have focused their audiences’ attention on one part of a 900 page law that, read in isolation, supports their case while masterfully diverting the audience’s attention away from the part of the law that shows why their claims have no merit. They have crated this illusion not simply by focusing on one specific statutory provision (as others have shown), but based on the order in which they have asked the Court to interpret the statutory provisions at issue. This may seem too obvious but the best magic tricks are often based on a single instance of substantial misdirection.

    The plaintiffs and Professor Adler tell the following story: They start with Section 1311 of the Affordable Care Act (“ACA”) and argue that it requires “qualified individuals” eligible for federal health insurance subsidies to purchase their insurance from an “exchange established by the state.” The federal government is not a “state,” they argue (persuasively) and therefore the plain text of Section 1311 forbids subsidies on federal exchanges. That common-sense interpretation, they claim, can only be overcome if the result is absurd. They argue that it is not absurd, and thus the plaintiffs have to win.

    This discussion of the issue, set up by the plaintiffs, and their lawyers and allies through lower court briefs, social media, and newspaper op-eds, while successful at putting the government on the defensive, is wildly out of touch with the true legal nature of the case.

    The question whether the Secretary of the IRS exceeded his legal authority by interpreting the ACA to allow subsidies on federal exchanges starts, not with Section 1311 as the plaintiffs would have you believe, but instead with the  section of the law actually relied on by the Secretary for that authority--Section 1321.  If we start there, with that baseline, it is easy to see why the plaintiffs’ claims have no merit.

  • February 26, 2015
    Guest Post

    by Douglas L. McSwain, Partner, Wyatt, Tarrant & Combs LLP

    *This post is part of the ACSblog King v. Burwell symposium.

    On March 4, 2015, the Supreme Court of the United States (SCOTUS) will hear King v. Burwell, a lawsuit attacking premium assistance tax credits under the Affordable Care Act (ACA) for those who live in states where the only Obamacare health insurance marketplace is the federal “exchange,” i.e., Healthcare.gov.

    The King v. Burwell Dispute:  Text vs. Context

    Background:  The ACA grants tax credits, based on income level, for individual health insurance purchased in the Obamacare marketplaces, also known as “exchanges.”  These credits may be claimed as premium assistance subsidies for a health plan selected by the taxpayer. In 2015’s open enrollment, over 9 million people purchased plans in the federal exchange, and of those about 87 percent, or over 7.5 million, purchased with premium subsidies. The King case questions the legality of these subsidies, and its outcome may determine whether 7.5 million or more taxpayers can continue to purchase insurance.

    There are two types of Obamacare marketplaces: state exchanges and the federal exchange. The ACA created the federal exchange for individuals who live in states that refuse or fail to set up their own state exchange. Currently, a total of 37 states do not have state exchanges, and those states’ taxpayers must use the federal exchange.  

    The King Challengers’ Argument: Premium subsidies are not allowed in the federal exchange.  The ACA’s text[1] creating the tax credit only provides for subsidies in “an Exchange established by the State.” The federal exchange has not been established by any state.  So, no tax subsidies can be provided in it, and taxpayers who live in the federal-exchange states cannot benefit from subsidies. 

    The King challengers’ argument is simple: “textualism” is supreme, and the specific statutory text creating the tax credit is controlling!

    The Obama Administration’s Response: The text creating the tax credit cannot be taken out of context. The challengers read it myopically, in spite of the ACA’s whole text and meaning, and in disregard of the law’s overall intent.

  • December 18, 2014

    by Jeremy Leaming

    In a surprising, unsettling move late in the year, the U.S. Supreme Court decided to hear a challenge to an Obamacare provision integral to keeping the popular health care law functional.

    In case you missed them, we suggest some more interesting, persuasive and measured responses to the statutory challenge below. We provided other noteworthy and powerful articles, earlier in the fall, which are available in this post.

    The material we’re highlighting now is from legal scholars, who in different ways have examined the legal argument against crucial language in the Affordable Care Act meant to help low-income Americans afford health care coverage. (Also see the Dec. 18 piece for ACSblog by Georgia State University law school Professor Neil Kinkopf.)

    Andrew Koppelman, the John Paul Stevens Professor of Law and Professor of Political Science at Northwestern University, in a piece for the New Republic looks at the efforts to topple the ACA. A legal argument aside, Koppelman writes, “When is it acceptable to deliberately aim to harm huge numbers of people in order to score a symbolic point?” If the argument were to win at the Supreme Court, which is likely to hear oral argument early in 2015, “about 4.5 million low-and-middle workers” in numerous states would lose health care coverage, he notes.

    At The Incidental Economist, University of Michigan law school professor Nicholas Bagley, who posted for ACSblog earlier this year on the argument when it was before the D.C. Circuit, provides a grouping of his articles, posts and podcast discussions about the matter now before the Supreme Court.  “My first post,” he wrote was devoted to showing why “the government’s contextual reading of the ACA makes better sense of the statute than the challengers’ cramped reading of a single provision. A district court judge in D.C. endorsed that reasoning the day after I wrote the post; I wrote about his decision here.”

    A compelling and accessible look at the statutory challenge to the ACA comes from Professor David Ziff, a Law Lecturer at the University of Washington School of Law. Ziff focuses on the legal argument being made against the ACA, and the need to seriously engage it.

  • December 18, 2014

    by Neil Kinkopf, Professor of Law, Georgia State University.

    The House of Representatives has passed over 50 measures to repeal the Affordable Care Act. The Supreme Court hasn’t yet entertained quite that many challenges, but it seems intent on catching up. Having resolved the major constitutional controversies, the latest challenge, King v. Burwell, is statutory. 

    To understand the arguments and the stakes in this case, we have to first take a step back and review how the ACA works. The ACA requires (almost) all individuals to have qualified health insurance. This requirement of nearly universal coverage is crucial to making the Act work. To make health insurance affordable, the Act provides subsidies to income-eligible individuals. To make health insurance available, the ACA seeks to establish a marketplace – an exchange, in the terms of the Act – in each state. The Act contemplates that each state government will establish an exchange. If a state government fails to establish an exchange, the federal government is mandated to step in and establish an exchange for the state.  

    The ACA grants subsidies to income-eligible individuals who purchase insurance on “an exchange established by the state.” This is the key phrase, for the challengers assert that it refers exclusively to exchanges established by state governments. If that interpretation is correct, the consequence is that individuals in states whose exchange is established by the federal government (because their state government refused or failed to establish one) are ineligible for the insurance subsidy. This, according to the law’s proponents, would gut the ACA, rendering health insurance unaffordable for millions of Americans. The law’s challengers reply that the meaning of the phrase is plain and that meaning must prevail.  There are many excellent posts demonstrating that the challengers’ plain meaning reading is inconsistent with the text and structure, not to mention the purpose and intent, of the ACA. I do not wish to repeat those arguments. Instead, I want to examine whether the challengers’ reading of the statute actually captures the plain meaning of the key phrase without resorting to the ACA’s broader structure and context (which, I hasten to add, are essential components of proper textualist, plain meaning analysis).