As everyone is aware, the United States Supreme Court has decided to take a case that challenges the subsidies for health care plans purchased on the federal exchange- King vs. Burwell. This is not a constitutional challenge to the law, but the case is one of statutory interpretation. Such cases are common before the Supreme Court and, in fact, make up the bulk of their cases. This is to be expected given the complexity of modern laws, especially Obamacare, and the propensity of Congress to write sometimes vague or ambiguously worded laws, or extend powers to administrative agencies. For example, very few cases before the Court this term are constitutional in nature but instead are statutory interpretation or standing issues.
The main thrust of the argument is that the Affordable Care Act (ACA) does not authorize for the federal government to grant subsidies/tax credits to individuals who purchased health care insurance on the federal exchange. The government’s hope was that most states would establish exchanges and the subsidy would therefore be available. However, 34 states refused to establish exchanges for various reasons- some practical, some political- although the reasons make little difference for this argument.
The government today argues that the Congress intended to extend the subsidies for those who purchased insurance on the federal exchange despite the clear, express wording of the law in several places. Of course, they would have preferred that all 50 states established exchanges in which case there would be no problem as concerns the subsidies. But, the congressional record is replete with references to this issue. The Texas Democratic delegation, led by [mc_name name=’Rep. Lloyd Doggett (D-TX)’ chamber=’house’ mcid=’D000399′ ], argued that the subsidy should be offered despite which exchange the insurance was purchased on, yet that argument was defeated. Furthermore, the IRS- which was tasked with formulating rules in this area- initially decided that the subsidy could only be extended to those who purchased insurance on state exchanges. Only after it became apparent that the majority of states would not create exchanges and after considerable pressure from the White House did the IRS suddenly have an epiphany.
Last term, the Supreme Court was erroneously taken to task by the civil rights community/industry over another statutory interpretation case- the Voting Rights Act (VRA). That case was the Shelby County case. In that case, the majority did not strike down the VRA, but simply said that criteria for determining so-called “preclearance” of electoral changes in affected jurisdictions was out-dated and reliant on the reality of Alabama in 1964 rather than 2014. The outcome of this case was sort of presaged by another case in which the Supreme Court more or less warned Congress to update the VRA (they did not).
The intent of Congress with the VRA and its subsequent reauthorizations and amendments is certainly more clear than sections of the ACA regarding subsidies for health insurance purposes. The problem was not the intent of Congress with the VRA; the problem was the wording and reliance on a formula that did not reflect the reality of the present.
Courts cannot put themselves in the shoes and minds of members of Congress when a law was passed. They can and do often rely on the legislative record which is sometimes helpful in clearing up ambiguity. Although the Supreme Court did not strike down the VRA as some civil rights activists contend, they did upset the apple cart- an apple cart that was teetering and which the Court had previously warned should be righted. By upholding the VRA, but not the formulas for determining coverage, they left it to Congress to eventually fix the problem. A year later, several versions of a “fix” are languishing in the Senate.
With these ambiguously worded laws, or subsequent determinations by agencies, the courts must first look to the clear wording of the law. On several occasions, the ACA says that subsidies are to be offered only to plans purchased on a State exchange. The law also says the federal government can step in and offer insurance on a federal exchange if a state refuses to establish an exchange. Yet, in over 2,000 pages of law there is no mention of a federal income tax subsidy offer for insurance purchased on the federal exchange. In other words, the legislative record indicates this was a consideration, that it was rejected, and the law was written as it was.
Like the Shelby County case and countless others (Ledbetter vs. Goodyear comes immediately to mind) the Supreme Court has upheld the underlying law while striking down other provisions within the law. Instead, the preferred method of reconciliation is not to issue sweeping proclamations, but to pinpoint statutory interpretation claims, strike down subsequent actions based on the wording of the law, and leave it to Congress to fix the problem. For example, in the Ledbetter case, she lost because of a flaw in the wording of the original law which basically established a statute of limitations for the claiming of sex discrimination in pay cases. They reached that decision based on the wording of the law. This was a best case example of the solution- Congress merely passed the Ledbetter Act and Obama signed it into law.
And just like that case and Shelby County, Congress can simply “fix” the wording of the ACA with respect to the offer of subsidies. Whether they do or do not is another question altogether. After all, Obama has claimed this to be settled law as he did his nanny-nanny boo boo dance. If a Congressional fix to the Voting Rights Act is a problem more than a year after Shelby, one can imagine the magnitude of fixing the Affordable Care Act. It would reopen the entire debate, something Democrats and Obama clearly do not want especially with a Republican-controlled Congress.
This very well may be the solution to the problem should the Supreme Court agree with the petitioners in this case and this writer sees no way they can come to the opposite conclusion. In this way, Chief Justice John Roberts can essentially be responsible (if he is the fifth vote) for the ultimate demise of Obamacare despite his earlier decision. Without the subsidy offered to those on the federal exchange, many of those the administration now touts as new enrollees will be unable to afford health care insurance. One would be left with a worse off situation than before the passage of Obamacare as many who were insured would suddenly find themselves uninsured out of economic necessity. Without the subsidy, the federal government cannot enforce mandates either as the two go hand-in-hand and the whole tax scheme falls in on itself since the mandate is a source of funding for the subsidies.
Requiring a Congressional fix would be the correct thing for the Supreme Court to decide as it would push the debate back into the political process, something the Democrats and Obama do not want. Ironically, it was Roberts who set up this chain of events by phrasing- correctly in retrospect- that Obamacare was a massive taxing scheme, not a health insurance reform initiative. The government can claim no Chevron deference here given the clear wording of the law. This was not a typographical error as morons like Paul Krugman basically assert. For the Supreme Court to decide otherwise would be a huge grant of power to administrative agencies like the IRS where they would become the ultimate interpreters of the wording of laws.