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Latest Supreme Court Decision on Obamacare: Chicanery at the Court

25 Jun 2015

Well, the Supreme Court has done it again.  By a vote of 6-3, including in the majority Chief Justice John Roberts, the court in the case of King v. Burwell, upheld the Obama administration’s reading of the Obamacare law that dealt with state exchanges.  You may remember, that this had been the subject of a lawsuit that said the language of the Affordable (sorry) Care Act did not allow the Federal government to step in to “save” subsidies in states that refused to establish health care exchanges.  The relevant language of the statute reads:

“each health insurance issuer that offers health insurance coverage in the individual . . . market in a State must accept every . . . individual in the State that applies for such coverage.” 42 U. S. C. §300gg–1(a).

In addition, the majority wrote “the Act seeks to make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty line. §36B. Individuals who meet the Act’s requirements may purchase insurance with the tax credits, which are provided in advance directly to the individual’s insurer. 42 U. S. C. §§18081, 18082.” (King v. Burwell, 4).

Now more language, as quoted and interpreted in the majority opinion”

In addition to those…reforms, the Act requires the creation of an “Exchange” in each State where people can shop for insurance, usually online. 42 U. S. C. §18031(b)(1). An Exchange may be created in one of two ways. First, the Act provides that “[e]ach State shall . . . establish an American Health Benefit Exchange . . . for the State.” Ibid. Second, if a State nonetheless chooses not to establish its own Exchange, the Act provides that the Secretary of Health and Human Services “shall . . . establish and operate such Exchange within the State.” (Ibid., 5)

Finally, the central issue before the court, and the statutory language quoted by it:

The issue in this case is whether the Act’s tax credits are available in States that have a Federal Exchange rather than a State Exchange. The Act initially provides that tax credits “shall be allowed” for any “applicable taxpayer.” 26 U. S. C. §36B(a). The Act then provides that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act [hereinafter 42 U. S. C. §18031].” 26 U. S. C. §§36B(b)–(c) (emphasis added). Ibid., 5, my emphasis in italics)

So there it is:  What happens if a state does not establish and exchange?  The language appears to say that if the state fails to establish and exchange then only the Federal government would be available as a second subsidy payer, but that the Federal government cannot require a state to set up an exchange and cannot itself then “take over” subsidies in that state and pay them anyway.  The opinion goes on to mention a few other provisions, and then reaches a tentative conclusion:

“These [other] provisions suggest that the Act may not always use the phrase “established by the State” in its most natural sense. Thus, the meaning of that phrase may not be as clear as it appears when read out of context.” (Ibid., 11)  Right here is the Court’s first huge and glaring failure.  Let’s assume that the phrase “the state” is used in different ways in different contexts in the statute, and therefore the main provision in this case is not so clear.  In that case the court ought to send the statute back to the Congress by refusing to give in to what the IRS or other agencies want it to mean.  It is a question to be clarified by the legislative branch, not the court.  But, alas, no.

The Court apparently wanted to save Obamacare.  So it said essentially that the term “state” the language above meant either a state or the Federal government.  This meant that it had to interpret the word state as “the state,” some government, any government, to get to the point of including the Federal government.  Roberts seemed to realize this, since he said it was not a natural interpretation.  But that didn’t stop him or the majority.  Here is what Roberts wrote in summary about the meaning of the central phrase:  “In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase. ” (Ibid., 20)  But the context does NOT support Roberts, nor does the “structure,” whatever that means I take it he is referring to the entire act and its various “interlocking” provisions).  Meaning is meaning, period.

Justice Scalia’s dissent was, as one person wrote, “blistering.”  I have to agree—and I agree with his dissent.  Do words have any meaning anymore?  Do we just change meaning whenever we want a particular outcome?  Perhaps, as Scalia said, there are some laws that the justices like better than others.  So what happened to objectivity, or even a semblance of it?  Is the Supreme Court now just another political branch?

Maybe in the grand scheme of things this decision is not all that significant.  But the principle emerging from it is incredibly significant—in a negative way.  If the Supreme Court wants to save a law, it will do whatever it must do to save it, regardless of any merit in the decision (Scalia said that too in his dissent).  Unfortunately the rest of us have to live with the results.  And will this decision “save” the Court’s reputation?  At the rate it is going it may have no reputation to save in a few years.