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Bracing for King v. Burwell
By the end of this week, we’ll have a Supreme Court decision on King v. Burwell, the latest “challenge to Obamacare,” as the headlines put it. The first thing you need to know is that the headlines are all wrong: King v. Burwell is not a “challenge” to Obamacare, and the plaintiffs do not seek to overturn a single sentence of the Affordable Care Act. Rather, they are challenging an IRS rule that is blatantly unfaithful to the ACA (but happens to be politically expedient for the administration).
Quick background: one section of the ACA says that “States” shall establish “Exchanges” to regulate the health insurance market within their borders (§1311). Another section says — for states that “fail” to establish Exchanges — the Secretary of HHS can establish a federal Exchange (§1321). And then, in another section, the ACA says that low-income citizens can be eligible for tax credits if they purchase health insurance “through an Exchange established by the State” (§36B).
The whole point of this structure was to pressure the states into establishing exchanges. States that failed to do so would face the wrath of voters who didn’t get their subsidies. The administration and its congressional allies assumed that the states would knuckle-under and create exchanges. In the end, 36 states did not set up exchanges.
Having failed to coerce the states, the administration lost all interest in actually implementing the coercive measures. Instead, the IRS rewrote the statute by rule, saying that tax credits are now available for anyone who buys insurance through an exchange, be it state or federal. King v. Burwell seeks to strike down the IRS rule and force the administration to live by the political bargain struck by Congress.
As the decision nears, speculation is mounting that Justice Kennedy might provide the swing vote in favor of the administration out of “federalism” concerns. In other words, Kennedy is worried that if the IRS enforced that statute as it is actually written, it would be unduly coercive on the states. That concern surfaced only briefly during oral argument, but if Kennedy — or any other justice — votes for the administration out of respect for federalism, there is something seriously wrong with his analysis.
First, the idea that you should interpret a statute so as to avoid constitutional problems is legitimate only when the statute is ambiguous; the idea is that you resolve ambiguities in a way that is consistent with the Constitution. But here there is no ambiguity. Tax credits are available only through an exchange “established by the State.”
Second, the coercion is exactly what Congress intended, and only because the Pelosi forces couldn’t get away with something even more coercive: i.e., creating only a federal exchange and forcing each state to sign up for it. Instead, they had to settle for a system of voluntary state cooperation, but with plenty of federal carrots and sticks to achieve state cooperation. Keep in mind that this is the same legislation that threatened to withhold each state’s entire Medicaid funding if they failed to expand Medicaid eligibility (a condition that was struck down in NFIB v. Sebelius — against the wishes of Justices Ginsburg and Sotomayor).
The task before the Supreme Court is to apply the text as written. Once the court confirms the meaning of the text, some other litigant can challenge the statutory provision as unconstitutionally coercive on the states. That will be Justice Kennedy’s opportunity to show concern for federalism.
Image Credit: “Obama signs health care-20100323” by Pete Souza – President Obama Signs Health Insurance Legislation Into Law. Licensed under CC BY 2.0 via Wikimedia Commons.
Published in Law
thank you for explaining this.
This is a timely and succinct summary. I hope the Republicans in Congress are better prepared for their response than they seem to be if SCOTUS rules against the way that the ACA has been implemented
In a world where being charged for not entering into a transaction is a tax and not a penalty, unfortunately any Court decision becomes possible.
Based on the siren on Drudge apparently what’s written in a law doesn’t matter.
It’s times like this when I wonder why I should have to follow any laws if our “leaders” don’t have to. Since the rule of law clearly doesn’t mean anything, I guess it just comes down to that whole monopoly on force thing the government has.
So it’s official, 6-3 with Roberts writing the majority opinion.
You’d better, unless you have the machinery of the State to back you up . Like Glenn Reynolds keeps saying — “Laws are for the little people.”
Gentlemen,
I’ve got to say my rating of the current Supreme Court is now incredibly low. Roberts rewrites a law on absurd grounds. Next the law is caught red handed trying to extort the states into compliance. The whole package is so bad that the states say no thank you anyway. However, incompetent extortionists always get a second chance.
Insurance rates are skyrocketing, wait times at emergency rooms are going way up. There are no such thing as “subsidies”, it’s a tax credit. 2600 pages of law and 90,000 plus pages of regulation to offer a tax credit!?
We are in an Idiocracy and the Supreme Court is proving itself to be the Supreme Idiot.
Regards,
Jim
Tell me again why it’s so important to stick with the GOP “because SCOTUS appointments!”.
So that’s it. The rule of law means nothing. We are truly a third world, caudillo run banana republic now.
Scalia’s dissent will be our epitaph.
Soon the right wing spin doctors will be out in force explaining how Roberts affirmed the ruling against his better instincts so that he could craft the majority opinion. I’m no legal scholar, so maybe there is some merit to this, but as far as I can tell, the right is pretty routinely getting their collective butts handed to them on the court.
I fear you’re right. Ugh. Still digesting the decision. I will be back with a new post as soon as possible.
Will a future plaintiff be able to make similar arguments but introduce Grubergate information?
The Court will then say that, although the evidence shows that King v. Burwell was wrongly decided, it will not be judicially overturned because Congress could have overturned King but didn’t.
Quoth Emperor Palpatine: “I’ll make it legal.”
Echo Mr. Justice Scalia: “Words no longer have meaning.”
Scalia’s dissent has some howlers…
I gotta laugh or I will cry.
related
http://ricochet.com/i-am-relieved-by-burwell-decision/
http://ricochet.com/supremes-uphold-king-v-burwell/
http://ricochet.com/supreme-court-upholds-obamacare-subsidies/
Is there a faster record for the time between when a Ricochet post is written and it is rendered inoperable by the Court?
I know the Tenth Amendment hasn’t been operable for a while anyway, but apparently now it reads:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people… or to the United States.
Damn.
That particular picture always ticked me off , why is that kid in there? He’s a prop, the only reason he’s in there is to give the Democrats a three-fer , a black child whose mother had passed away. Thus anyone who’s against Obamacare hates blacks, children and orphans. They are masters at that kind of stuff. There is no evidence that Obamacare could have saved his mother, she didn’t die from a lack of health care.
It’ll all be a lot easier if you just remember that the law is whatever Liberalism says it is.