King v. Burwell, the recently argued Supreme Court appeal, puts at issue five words hidden away in a subsection of the 2,000 page Affordable Care Act: “Exchange established by the State”. The Act’s opponents contend that these words deny the Act’s insurance subsidies to the 7 million people purchasing health insurance through federally-facilitated exchanges established pursuant to the Act in the 34 states that for various reasons did not set up their own online marketplaces where insurance company offerings are presented in apples-to-apples formats. They are in court for the announced political purpose of blotting out Obamacare. A ruling in their favor would do just that.
A RAND Corporation report estimates that approximately 13.7 million people, two-thirds of all those enrolled nationwide in the ACA-compliant individual market, are in the 34 states with federally-facilitated Exchanges. If subsidies are eliminated in those states, RAND projects that enrollment in the ACA-compliant individual market will decline in federally-facilitated states by 70-percent from 9.6 million to 4.1 million enrollees. The RAND study concluded that “the elimination of subsidies in [federally-facilitated] states would result in sharp premium increases and enrollment declines in the ACA-compliant individual market, causing significant instability and threatening the viability of the market”; a so-called insurance death spiral. The New York Times goes further, pointing out that “With people thrown off insurance, the states and their hard-pressed hospitals and doctors would also have to absorb much of the cost of uncompensated care… [and that] the lack of insurance almost always means that sick people get less care, with greater risk of death.”
The five words that the opponents have weaponized to achieve their goal, when read in a vacuum, can be read to deny subsidies to otherwise eligible federally-facilitated exchange enrollees. The correct reading depends on the extent to which the Court’s textualists – Justice Scalia chief among them – hold to their theory that ordinary meaning of a statute’s wording governs its interpretation. Strict adherence would exclude sources of legislative intent that might be found in legislative history, consideration of the problem the statute was intended to remedy or the IRS interpretation making tax credits available to eligible enrollees through both state-based and federally facilitated marketplaces.
Textualism is a prevalent conservative judicial theory. However, even Justice Scalia has emphasized “the fundamental canon of statutory construction that the words of a statute must be read in the context of the entire statute with a view to their place in the overall statutory scheme”.
If the Supreme Court applies Justice Scalia’s basic canon of statutory interpretation, King v. Burwell isn’t malignant. If not, the prognosis is dire. There is a simple legislative way to avoid these consequences: amend the the offending ACA subsection. Except, maybe not so simple. On February 3, the House of Representatives, where Obamacare is despised by its opponents, voted to repeal it for the 56th time and with it, “health care that is accessible and affordable for all.”
Thus, King, a case as much about the rules of textual interpretation of five words in a lengthy and complex statute as about the politics of healthcare reform in a polarized environment, becomes decisive. There is no ignoring that 2the political objective of crippling Obamacare will be achieved if the Court rules for the opponents.
Will Textualism prove to be an objective interpretive tool or will King v. Burwell announce achievement of the political objective of Obamacare’s destruction? The Court’s answer is expected in June.