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I hope to get to the SSM decision in a later post, but for now let me recap the result in yesterday’s decision in King v. Burwell: Obama 1, Rule of Law 0. I have a slightly longer analysis over at City Journal, but here’s the gist.
By a margin of 6-to-3, the Court upheld an IRS rule that supposedly implements the Affordable Care Act — Obamacare — by extending health insurance tax credits to taxpayers in states that have no health insurance exchange of their own, but rather rely on the federal healthcare.gov exchange. The problem with this rule, as the plaintiffs in King pointed out, is that it flatly contradicts the ACA. The statute clearly limits tax credits to taxpayers who use state insurance exchanges, not the federal one. A majority of the Court, therefore, simply rewrote the ACA.
This should have been an easy case. Obamacare provides two different mechanisms for establishing a health insurance exchange. A state can establish an exchange under Section 1311 of the Act. And in states that “fail” to establish an exchange, the secretary of Health and Human Services must establish an exchange under Section 1321. When discussing eligibility for those all-important tax credits, the ACA says that they are available only to taxpayers who enroll in a qualified health plan “through an Exchange established by the State.”
This limitation on tax credits was not a drafting oversight, Congress deliberately limited tax credits in order to pressure states into creating their own exchanges (constitutionally, the federal government cannot force states to create health care exchanges). At the time of the law’s passage, its congressional backers assumed that each state would buckle under and create its own exchange. Of course, that’s not how things ended up. Enter the IRS, which expanded tax credits to all exchanges in order to guarantee the viability of the Obamacare project.
The court’s majority opinion, written by Chief Justice John Roberts, has a surreal, through-the-looking glass quality about it. The phrase “an Exchange established by the State under Section 1311,” he says, is “ambiguous.” Actually, the phrase is crystal clear, including the word “state” which the ACA defines as “each of the 50 States and the District of Columbia.” If anything is unambiguous about Obamacare, it’s that tax credits are available only to those who purchase insurance through an exchange established by one of the 50 states or the District of Columbia.
No matter: the finding of “ambiguity” gives the Court license to interpret the law, rather than simply applying it. In the name of interpreting the supposedly ambiguous language, Roberts looks to the overall purpose of Obamacare which, he decides, is the avoidance of the dreaded “death spiral” of rising premiums and falling enrollments that could destabilize the individual market. His opinion is peppered with references to “death spirals”—one could almost make a drinking game out of it—and Congress’s desire to avoid them. And so, in order to effectuate the law’s higher purpose, the Court decrees that “an Exchange established by the State under Section 1311” includes “an Exchange established by the Secretary of HHS under Section 1321.” Curiouser and curiouser, as Alice said.
The Supreme Court’s decision, and its reasoning, strikes a blow against the rule of law. Among other things, it ratifies the executive branch’s unconstitutional usurpation of legislative power. When an administrative agency unilaterally rewrites the terms of a statute, it violates Article II’s command that the executive must “faithfully execute” the laws passed by Congress. Compounding the problem, the Court engages in its own power grab—declaring a seemingly limitless right to refashion statutes to suit the Court’s policy preferences.
In dissent, Justice Scalia—joined by Justices Thomas and Alito—rightly accuses the majority of ignoring the rule of law; “that ours is a government of laws and not of men.” Given the judicial makeover of the ACA, Scalia suggests that “we should start calling this law SCOTUSCare.”
You can read the full analysis over at City Journal.Published in