Since my last post on this topic in the wake of the NFIB v. Sibelius decision was taken by some as an overall defense of Obamacare, let me begin by stating clearly that I think the ACA is a horrible law, horribly written and horribly implemented. It is a disaster of epic proportions that is approximately the last thing this country needs during an extended economic downturn. From the perspective of policy and practicality, I think it’s one of the worst things enacted by Congress in my lifetime.
I’ll caveat what follows by noting that I am not a lawyer. What follows is nothing more or less than my personal opinion, based on a thorough reading of the ACA and the Supreme Court opinions that relate to it. It is the opinion of a layman – albeit one who loves studying this stuff. Feel free to disagree with it in the comments below.
Despite the fact that the law itself is truly awful, I think Chief Justice Roberts’ handling of it at the Supreme Court has been superb. I gave my reasons for agreeing with his decision in NFIB v. Sibelius here, and at least some of his reasoning has proven equally persuasive to some of the front-page writers on this site, such as Leon Wolf, who nevertheless vigorously and articulately disagrees with Roberts’ latest decision in King v. Burwell.
Of course, NFIB v. Sibelius is old news. What about this morning’s decision?
I’m not a lawyer by profession, I’m an editor. That being the case, I cringe every single time I read through any portion of the badly mis-labeled Affordable Care Act, because the thing is replete with drafting errors, typos, contradictions, and ambiguities. This part, though, is pretty straightforward:
42 U.S. Code § 18041 (ACA Section 1321)
“Each State that elects, at such time and in such manner as the Secretary may prescribe, to apply the requirements described . . . shall, not later than January 1, 2014, adopt and have in effect the Federal standards . . . or a State law or regulation that the Secretary determines implements the standards within the State. If a State is not an electing State . . . the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” [emphasis mine]
Taking out all the flowery legislative language, the meaning of the above three sentences (yes, in Plain English, all that mishmash plus the portions omitted by ellipses amounts to only three sentences) is quite simple. Here’s my attempt to paraphrase as succinctly as possible:
“The HHS Secretary will establish rules for setting up an exchange. Each state can choose whether to set up an exchange. If a state chooses not to set up an exchange, the HHS Secretary will do it for them.”
In the cases where that happened, one plausible interpretation of the text (Scalia’s) is that, by the state’s choice, there is no “exchange established by the state” in that state.
Another plausible interpretation of the text (Roberts’) is that, by the state’s choice, The HHS Secretary has performed the task of setting up an “exchange established by the state.”
You can argue plausibly that Roberts’ interpretation is contradicted by other language elsewhere in the statute. But so is Scalia’s. What you can’t plausibly argue (though Scalia certainly tried) is that Roberts came up with his interpretation out of whole cloth. He didn’t. It’s there in the text, at least as plainly as Scalia’s interpretation (although it would be too much to claim that either approach is clearly stated. The words “clearly stated” should probably not be applied to anything in the ACA). We’ll look more at the specific textual justification in a bit.
These sorts of ambiguities are the things that drive editors crazy. At its root, this is as much a question of English as it is a question of law. Scalia’s interpretation is certainly one way to read the statute. Roberts’ is another. But it’s important to understand that both interpretations can be supported by the text. Of course, anyone – legal scholar or not – is certainly free to disagree with the Chief Justice’s reading of the law, but that’s very different than declaring – as Scalia did in his dissent – that Roberts is making up new law out of whole cloth. He’s just not.
Let’s look at Scalia’s thoughts in more detail . . .
Quin Hillyer over at National Review had harsh words for the Chief this morning. He wrote:
“John Roberts confirms that he has completely jettisoned all pretense of textualism. He is a results-oriented judge, period, ruling on big cases based on what he thinks the policy result should be or what the political stakes are for the court itself. He is a disgrace. That is all.”
Hillyer has it exactly backward. As noted above, the Chief did not rewrite the law, he adopted one of two reasonable interpretations from mildly contradictory portions of it.
There was one paragraph in particular in Roberts’ opinion that made me literally laugh out loud:
It is implausible that Congress meant the Act to operate in this manner. See National Federation of Independent Business v. Sebelius, 567 U. S. ___, ___ (2012) (SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting) (slip op.,at 60) (“Without the federal subsidies . . . the exchanges would not operate as Congress intended and may not operate at all.”). Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation. But those requirements only work when combined with the coverage requirement and the tax credits. So it stands to reason that Congress meant for those provisions to apply in every State as well.
Here Roberts notes that the joint dissent in NFIB v. Sibelius, signed by all the dissenters in King v. Burwell as well as Justice Kennedy, explicitly stated that Congress intended to provide federal subsidies for all exchanges, and that in fact the entire law hinged on those subsidies. The NFIB dissenters needed to make that claim in order to argue against the law’s constitutionality, noting that if the individual mandate failed, all of the law’s interlocking parts (including the subsidies) fell with it.
Roberts correctly tweaks the NFIB dissenters (save Kennedy), noting that they, not he, are the ones focused on the result rather than the text. When they can undermine the ACA as a whole by arguing that Congress intended subsidies for all exchanges, that’s what they claim. When they can undermine the ACA as a whole by arguing that Congress never intended subsidies for the federal exchange, that’s what they claim.
Roberts is not the one focused on the end result here.
Those who disagree with the Chief will highlight, as Scalia did, Section 1401(a) of the Affordable Care Act – specifically this part:
The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent . . . of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or the excess (if any) of the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year.
In particular, those who hoped for the Court to rule the other way in King v. Burwell have relied on the phrase “an Exchange established by the state under 1311 of the Patient Protection and Affordable Care Act.” The idea is that states operating under the federal exchange are not using “an Exchange established by the state under 1311.”
There are two pieces to this. Scalia focused on the latter, but I’ll address them both here:
Scalia didn’t dwell on this, but many other critics of the ACA have done so as the case wound its way through the courts. The argument here is that Section 1311 of the law outlines the rules for establishing state exchanges, while another section deals with the Federal exchange. That argument is not entirely true.
In particular, Section 1311(f)(1), says:
“An Exchange may operate in more than one State if each State in which such Exchange operates permits such operation; and the Secretary approves such regional or interstate Exchange.”
That is, to put it quite simply, an entirely accurate description of the federal exchange, which is established by a state’s decision not to proactively set one up themselves. Thus, the federal exchange is in fact covered by Section 1311, just as the state exchanges are.
The federal exchange, then, is: (a) an interstate exchange, that is (b) established under Section 1311, (c) by a state’s deciding to use it instead of a single-state exchange.
“Established by the State”
This is the crux of the whole thing. It’s the core of Scalia’s dissent, and the root of all the criticism that Roberts is “rewriting” the law.
The key here is to note that, when Congress passes a law, it can legally define the terms of that law however it wishes, common sense be d***ed. So let’s say Congress passes a law, to wit:
“Failure to keep one’s dog on a leash at all times when walking on the National Mall in Washington, D.C., shall be punishable by a fine not to exceed fifty dollars. For the purposes of this title the word ‘dog’ shall refer to any member of the genus felis catus.”
It doesn’t matter what your – or anybody else’s – common sense definition of the word “dog” is. If you want to take your cat for a walk on the Mall, you’d best have it on a leash or have your wallet handy.
So Justice Scalia may not be wrong when he says that “it is hard to come up with a reason to include the words ‘by the State’ other than the purpose of limiting credits to state Exchanges.” Nevertheless, that’s precisely what Congress, in its infinite wisdom, did. Congress’ definition of an Exchange is found in Section 1311(b).
“Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘Exchange’) for the State”
Got that? According to the text of the law itself, whenever it uses the word “Exchange,” in “this title” (Title I of the law, which contains all the relevant sections we’re discussing here), what it means is an American Health Benefit Exchange established by a State not later than January 1, 2014.
So the phrase “Exchange established by the state” is entirely redundant – not because of Roberts, but because the Congressional staffers who drafted the darn thing apparently can’t write (this is nothing against Congressional staffers in general. Some of my very best friends are Congressional staffers who are also stellar writers).
The point, though, is that Justice Scalia is exactly right when he complains that the majority’s interpretation renders the phrase “established by the state” moot. But that’s not Roberts’ error. It’s Congress’ error. According to the text of the law an exchange, in order to be an exchange at all, is by definition established by the state.
As any technical editor can tell you, having a unique and idiosyncratic definition for a particular term is hardly unusual in any given publication – especially, perhaps, one written by Congress. Words have meanings to be sure, but those meanings depend on the intentions of their authors and the definitions they are given within a particular document. Common sense quite frequently has little or nothing to do with it (again, perhaps especially where Congress is concerned). Roberts was simply working with what he was given.
So while Scalia may claim to “agree with the Court that sound interpretation requires paying attention to the whole law,” that’s not what he’s doing here. What Scalia is doing is perfectly clear: He’s trying to get an odious law off the books by any means available to him. That is, he’s focusing like a laser on the end result, just as he accused Roberts of doing.
The Long Game
But what is Roberts doing? I hypothesized, in writing about NFIB v. Sibelius, that Roberts was willing to trade a slight expansion of the taxation power in exchange for gathering the liberal wing of the court behind some of the most significant limiting language that has ever been applied to the much-abused commerce clause. It’s entirely possible that some similar calculations went into his decision today. The real answer, of course, is known only to Roberts, and perhaps in part to his eight colleagues on the court. But here are some things that may have been on his mind:
In King v. Burwell’s oral arguments, a novel idea came up that I for one hadn’t come across reviewing lower court arguments. Justice Kennedy in particular seemed to believe that if the subsidies were declared illegal, the law as a whole would have been unconstitutionally coercive on the states by denying subsidies to any that refused to set up an exchange, much as the court in NFIB v. Sibelius found unconstitutional the threat of states losing all Medicaid subsidies if they didn’t play ball. Unlike some of the other justices, Kennedy doesn’t tend to play “Devil’s Advocate” in oral arguments. His questions usually reflect his thoughts as they play out later in his written opinions. As he noted in oral arguments, when one of two possible interpretations requires the court to find a law unconstitutional, precedent requires them to choose the other interpretation.
That makes a counterfactual scenario easy to imagine: If Roberts sides with the dissenters in King vs. Burwell, that leaves Kennedy as the senior justice in the majority. The senior justice gets to assign the writing of the opinion, and Kennedy is free to assign it to himself. So instead of getting Roberts’ straightforward defense of the statute based on textual interpretation, we get Kennedy’s “saving construction” of the law based on the notion that Congress withholding subsidies from the states using the federal exchange would be unconstitutionally coercive.
It could very well be that Roberts didn’t want such an opinion to see the light of day.
Another common defense of the law is rooted in the left’s willful misunderstanding of federalism. Justice Kennedy, again, is particularly susceptible to some odd ideas of what federalism is and isn’t. And again, he would have been responsible for assigning (and perhaps writing) the court’s opinion had Roberts voted the other way. Ilya Somin at the Volokh Conspiracy gives a great rundown of why a decision upholding subsidies rooted in “federalism” (scare quotes intended) would have been a disaster.
Finally, the easiest road to upholding the subsidies would have been through the use of “Chevron” deference, named after the 1984 Supreme Court case, Chevron v. Natural Resources Defense Council.
The crux of Chevron deference is simple: In short, the text of a law means whatever the executive agency responsible for implementing it says it means, unless there’s a d*** good reason to believe that it means something else. (such as, for example, a sentence in the law that explicitly says what it means.)
In this particular instance, the implementing agency is the IRS. That being the case, a ruling based on Chevron deference would have basically invited the IRS to invent whatever interpretation it chose for any law it was charged with implementing from here on out. The Obama administration’s IRS does not need any more encouragement to quite literally take the law into its own hands, thank you very much, and Roberts’ opinion in King v. Burwell explicitly told the agency so.
So to put it quite simply, with or without Roberts, there were enough votes to sustain the subsidies. By joining the majority and assigning the opinion to himself, the Chief Justice was able to decide the case on the narrowest ground possible, avoiding some dangerous pitfalls about which his colleagues might not have been so careful.
The End Game
Ultimately, though, I think Roberts was pretty clear about his intentions here. Echoing words from both his opinion in NFIB and his own confirmation hearings, Roberts wrote in King v. Burwell:
“In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined—’to say what the law is.’ Marbury v. Madison, 1 Cranch 137, 177 (1803). That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done.”
That’s his real message: “Ok, people of America, you elected the folks responsible for this law’s ‘inartful drafting’ (his words). Don’t expect us to save you from the results of your own bad decisions. That’s not our job.”
Shorter Roberts: If you want to get rid of the policy, get rid of the people who wrote it.
Shorter mjdaniels: If you believe Congress, not SCOTUS or the executive bureaucracy, ought to take the lead in deciding what is or is not “good policy,” Chief Justice Roberts appears to agree with you.
It’s a healthy reminder going into the 2016 elections. Let’s elect a President and Congress with the backbone to rid us of this disastrous law.
EDIT: Removed two erroneous references to an “unconstitutional” law, as this case revolved around statutory, not constitutional, interpretation.