Home » Uncategorized » The losing end in Obamacare 2.0

The losing end in Obamacare 2.0

As the Supreme Court began to take up the question of whether the Affordable Care Act properly allowed subsidies to go to those purchasing insurance on the federal health exchange, as opposed to state-run exchanges, two lines of argument began to emerge. One focused on the plain language of the phrase “Exchange established by the State,” which, according to the petitioners, clearly meant that only purchasers at state exchanges could receive subsidies. This interpretation required a studied disregard for the ACA’s broader purpose of expanding health care access, as well as other textual provisions that appear not to distinguish between purchasers at state exchanges and purchasers at healthcare.gov. But it allowed ACA opponents to blame Congress for sloppy drafting and to hold Congress responsible for fixing it.

A second line of argument claimed that the the disputed language was not a bug, but a feature of the ACA. By this account, Congress deliberately limited subsidies to states with their own exchanges, as a way of strong-arming recalcitrant states into participating. This claim had little support from the historical record, as no one involved with the ACA negotiations thought that subsidies were being withheld as a means of commandeering states to create exchanges. (Indeed, the dissenting opinion in the first ACA Supreme Court case worked on the assumption that eligibility for subsidies did not hinge on your home state’s decision to create its own exchange.) It also lacked any logical foundation: Why would Congress, on the cusp of achieving the century-old dream of national health insurance, include a feature that, if triggered, would sabotage the ACA altogether? Whether it could convince five justices, however, remained an open question that provoked no small amount of agonizing from ACA supporters.

Justice Antonin Scalia’s dissent, while not as dyspeptic as what followed the next day, is caustic in presenting its application of textualism to the ACA’s subsidy language. The bulk of the opinion focuses on what he sees as the absurdity in holding that “Exchange established by the State” can encompass the federal exchange. While paying lip service to the need to interpret contextually, he considers the relevant text so clear in its meaning that no consideration of context can compel a contrary result. After all, why bother including “by the State” if you intend to make subsidies available to all, irrespective of who created the exchange? If you wish to consider this phrase a drafting error–and Scalia’s not convinced that it is–then Congress, and not five justices, should be the actor to fix it.

As for the alternative history of the ACA presented by the petitioners, Scalia does not rely much on it. He does refer to the theory as “plausible,” but that’s about as far as he goes. The bulk of the opinion pits Scalia’s textualism against the purposive approach favored by the majority. It is noteworthy that in a case holding such policy and political (if not legal) significance, Scalia was unable to convince two fellow conservatives on the Court to join a textualist opinion against the Obama administration’s interpretation of the ACA’s subsidy language.

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1 Comment

  1. liscw says:

    Very clear explanation!

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