Arnold Buchman, a trusted Margolin Group Senior Advisor – and retired CIGNA Corp. financial and benefit-delivery group health insurance attorney – explores in his newest opinion the implications of the Supreme Court’s recent decision in the King v. Burwell case. Arnold’s commentary illuminates the impact of this landmark case and challenges Justice Antonin Scalia’s assertion that the majority opinion is mere “interpretive jiggery-pokery.”
Arnold writes:
In King v. Burwell, the Supreme Court rejected an interpretation of the Affordable Care Act that would have denied its premium subsidies to the millions of individuals who did not buy health insurance on exchanges “established by the State.” At issue was not the Act’s constitutionality, but the meaning of particular language.
Although four fateful words, “established by the state”, are clear when read in a vacuum, the Court, looking to the Act’s overall purpose, structure, and context, recognized that in providing a federal backup option, Congress intended to ensure that citizens of states unable or unwilling to construct exchange mechanisms would have the benefits of the Act. (As it happened, some 7 million people in 34 states.) Opponents argued that Congress restricted subsidies to exchanges established by the states to encourage states to create their own exchanges. But, as Chief Justice Roberts noted, limiting subsidies to state-established exchanges, could well push the individual insurance market of a state with a federally established exchange into a death spiral thereby undermining the ACA and risking its collapse.
The rejected interpretation was based on what at most is a four-word drafting error hidden in a subsection of the Act’s 2,000 pages; an oversight discovered by opponents long after ACA’s enactment. In ruling against the opponents, Chief Justice Roberts, writing for the majority, observed: “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.” He concluded: “A fair reading of legislation demands a fair understanding of the legislative plan.” Simply stated, the sum and substance of the Supreme Court’s decision is that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”
In legal-interpretation jargon, purposivism prevailed over textualism. In plain speak, the spirit of the law prevailed over its letter.
Despite cries from opponents that the sky is falling, the ACA’s purposes are being achieved. Its basic purpose is to cover the previously uninsured. After less than two years of operation, and even with a number of states refusing to expand Medicaid pursuant to the Act’s provisions, a greater percentage of Americans age 18 to 65 have health insurance than at any time since record-keeping began in 1997. So far, over 16 million Americans now have coverage under the Act. In states that have expanded Medicaid, the percentage of uninsured has fallen from more than 16 percent to just 7.5 percent.
The Act’s less expensive coverage plans, while better than no insurance and the limited coverage plans prohibited by the Act, do have relatively large deductibles and significant out-of-pocket costs. Still, studies show that now, the percentage of adults having problems paying family medical bills is down 21.3 percent from September 2013, just prior to the rollout of the Medicaid expansions and the exchanges. That works out to some 9.2 million people.
Surveys also show that more than six of 10 adults who used their exchange or Medicaid plans to obtain care reported that they could not have afforded or accessed it previously.
Through it all, premium increases have been lower than opponents warned, the growth of overall health spending has slowed, budget deficits have declined and, in the biggest gains since the 1990s, the U.S. economy has added a monthly average of 240,000 jobs since ACA went into effect.
In determining that, the apparent clarity of those four words notwithstanding, the law makes subsidies available on all exchanges, state and federal, the Supreme Court applied standard interpretive methods. Looking to context and structure is not the “interpretive jiggery-pokery” charged by Justice Antonin Scalia’s dissenting opinion. Rather, the Court’s majority was, in the words of the same Justice Scalia in an earlier case, honoring “the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”
The litigious shuck and jive that was at the core of King v. Burwell failed because, in providing subsidies in all exchanges, a majority of the Court applied judicial common sense rather than methodical literalism to the task of legislative interpretation.
As a result, ACA lives on. But, Obamacare remains controversial as opponents remain convinced that it is an alien approach that will undermine, if not destroy, the American economy and healthcare availability. The Republican-controlled Congress may attempt to repeal parts of the law using “reconciliation”, the procedure for changing a law to reduce spending. Obamacare is certain to be an issue in the 2016 elections and a Republican Congress with a Republican Presidency may well undo the law. But today, the 7 million who stood to lose their subsidies came out on top – thanks to the majority of justices who stood above politics by interpreting ACA, not as “Obamacare,” but as Congress wrote the Affordable Care Act it in its entirety.