Passions flew in yesterday’s 6-3 King v. Burwell decision, as Supreme Court justices writing for the majority and the dissent let their clashing positions shine through regarding the fate of health insurance subsidies mandated in the Affordable Care Act. Let’s explore some of their more interesting points, but first some background:
What was happening in King v. Burwell?
The ACA works by using three fundamental pillars: 1) health insurance companies must sell coverage to anyone, no matter how sick they may be; 2) to ensure sure that healthy people don’t just wait until they get sick to buy the insurance, the individual mandate requires that everyone purchase coverage; 3) to ensure that everyone can afford to buy insurance, the ACA provides subsidies so that no individuals contributes more than eight percent of their income towards health insurance.
The plaintiffs in this case argued that one clause in the ACA’s tax provisions – which states that subsidies are available on an exchange “established by the State” – should be interpreted so that subsidies may only be provided to residents of the handful of states that set up their own health care marketplaces, and not to states using the federal exchanges. Striking down this provision would mean that millions would be unable to afford insurance, which would reverse the law’s original intent and cause the entire system to collapse.
As we know, the court ruled that subsidies are legal and the opinion matched the dissent in its biting commentary.
Chief Justice John Roberts’ Majority Opinion
Joined by Justices Kennedy, Breyer, Ginsburg, Sotomayor and Kagan
Citing the Dissent
Chief Justice John Roberts, recognizing how politically divided his court was, began his decision with flare: in upholding the ACA’s fundamental pillar, he actually cited Scalia’s dissent from the last high-profile ACA case.
Scalia had recognized that “Without the federal subsidies . . . the exchanges would not operate as Congress intended and may not operate at all.” Roberts remarked that Congress could not have intended to undermine its own law by removing a vital pillar from its structure. If Scalia’s assumption was valid, he argued, then it made Congress’ intent to provide subsidies nationwide inescapably clear.
One of the GOP’s favorite criticisms of the ACA is its sheer length. The law spends hundreds of pages iterating and reiterating its intent. Roberts turns the usual critique on its head, ridiculing the idea that the law would spend 900 pages of text detailing a system before undermining the entire thing in “a sub-sub-sub section of the Tax Code.” No self-respecting lawmaker would “have used such a winding path of connect-the-dots provisions” to form the basic pillar of a law.
The lower court had upheld the subsidies using the “Chevron” method of judicial interpretation: if a law is ambiguous, then the court should defer to the government’s understanding of it. If the Supreme Court held up this standard, it would allow a new administration – say, a President Cruz or Walker – to reinterpret the law on their first day in office and remove the subsidies. Roberts forcefully rejects this argument, recognizing that “if Congress wished to assign that question to an agency, it surely would have done so expressly.” If a future President wants to change the law, they’ll have to sign a bill from congress the old-fashioned way.
Acknowledging that the ACA is not simplistic
The plaintiffs claim that the sentence in question is a simple matter of dictionary definitions. If the law says “state”, they say, it must refer to only one of the 50 states or DC.
But Roberts asserts that such a rudimentary interpretation cannot be the intent of congress, since this would undermine just about every clause of the law. “That’s a problem,” he says: “if we give the phrase “the State that established the Exchange” its most natural meaning, there would be no “qualified individuals” on Federal Exchanges. But the Act clearly contemplates that there will be qualified individuals on every Exchange.” Opening a dictionary and immediately declaring the case resolved would mean steamrolling the legislature’s intent, which Roberts claims is judicial overreach. (Scalia responds directly to this argument in his dissent, referring to this idea as “pure applesauce”).
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”
The Chief Justice closes by reminding the court that the legislature made the ACA for a reason, and it’s not the court’s job to parse words to reverse the entire purpose of their lawmaking. “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” he says, and if the court reshapes the law to do the opposite then they are overreaching into the legislature’s territory.
Justice Antonin Scalia’s Dissent
Joined by Justices Thomas and Alito
The Secretary of Health and Human Services is not a State.
Justice Scalia believes that the language of our laws must be directly tied to their dictionary definition, otherwise there’s no point in writing them at all. He jumps in right off the bat: if subsidies are available in exchanges “established by the State”, and the federal government has established its own exchanges, then in Scalia’s view we must recognize the illegality of these subsidies on their face. “State” means “each of the 50 States and the District of Columbia,” he says. “Because the Secretary is neither one of the 50 States nor the District of Columbia, that definition positively contradicts the eccentric theory that an Exchange established by the Secretary has been established by the State.”
“Words no longer have meaning”
Frustrated by the idea that the intent of congress can supersede some confused language in the law, Scalia tells the majority that “if an Exchange that is not established by a State is ‘established by the State’” in their interpretation, then they are recklessly rewriting laws with no heed to what is on the page that passed congress and was signed into law. If we ignore such a clear sentence as “established by the State”, Scalia says, “words no longer have meaning.” If that’s’ the case, he implies, what are we even doing here?
Embracing his love of language – though somewhat contradicting his claims that we should adhere strictly to the dictionary as he uses terms like “applesauce” to describe the majority opinion (Scalia’s philosophy might remind us that the opinion is words on a page, not literal fruit soup) – Scalia lambasts the “jiggery-pokery” of the majority opinion, which he claims engage in “somersaults of statutory interpretation” to keep the bill functional. The court, in his eyes, wants to maintain the ACA and is performing acrobatics in order to do so.
Scalia is baffled – baffled I say! – at the majority’s ability to ignore the words sitting on the page in front of them. “Under all the usual rules of interpretation,” Scalia declares, “the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.” So frustrated is he at what he believes is the Court’s willingness rewrite the law, he suggests we call a spade a spade and “We should start calling this law SCOTUScare.” Roberts argues that using such a strict interpretation of the law that it changes its very purpose would make the court the very owner of the ACA that Scalia derides it as. They both resist judicial overreach, but each sees the other’s methods as active participation in shaping the law.
So in the end, the Administration prevails. Now if we can only get back all those hours – nay, days – spent debating what the Justices would do and what would happen if Kennedy voted one way or the other. Perhaps our time could be better spent actually explaining the Affordable Care Act to the American people. Enough applesauce.
The Initiative is a partnership between the Economic Studies program at Brookings and the USC Schaeffer Center for Health Policy & Economics, and aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings.