by Rob Weiner, formerly Associate Deputy Attorney General In the United States Department of Justice, is a partner at Arnold & Porter LLP.
*This post is part of the ACSblog King v. Burwell symposium.
In King v. Burwell, the Petitioners challenge an IRS rule granting tax subsidies under the Affordable Care Act to low income families in states with federal insurance Exchanges so that those families can buy health insurance. The Government’s brief to the Supreme Court predicted that without the subsidies, insurance markets in the states with federal Exchanges would descend into death spirals. Petitioners’ reply brief countered that even if this prediction were true:
[T]hese consequences are the result of the IRS Rule [allowing the subsidies], not the statute. Had the IRS from the start made clear that subsidies were limited to state Exchanges, states would not have overwhelmingly refused to establish them.
The irony of this claim is thick. From the start, opponents of the ACA mounted a campaign against the Exchanges, going so far as to dispatch traveling road shows in 2011-12 to lobby state legislatures against establishing them. Ultimately, 34 states did as urged and declined to set up their own Exchanges. Nonetheless, Petitioners now blame the IRS rule for that result.
The accusation is especially brazen because the opponents did not base these pitches on the IRS rule. The American Legislative Exchange Council (ALEC), an influential right-wing group that focuses on state legislation and that commissioned its own anti-Exchange road show, adopted a resolution in October 2011 entreating states not to establish Exchanges. Notably, the resolution assured the states that, “There is no penalty for a state in allowing the federal government to implement an Exchange.” But the resolution mentioned neither the tax subsidies nor the IRS rule proposed two months earlier. Likewise, the Heritage Foundation exhorted states to refuse to establish Exchanges, and it, too, did not base its argument on subsidies and the IRS rule.