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How Four Words in Affordable Care Act Divide the Supreme Court

Does section 36B mean what it says?

The Supreme Court is poised to issue a decision this month in a case that could again threaten a key aspect of the Patient Protection and Affordable Care Act (PPACA). But this time, unlike 3 years ago when the court rejected a constitutional challenge to the law’s individual mandate, the case, King v. Burwell, focuses primarily on statutory interpretation.

The issue is whether section 36B means what it seems to say if read literally and in isolation from the rest of the law: that PPACA subsidies are available only to people “enrolled … through an exchange established by the state.”

Plaintiffs in the case suggest that the drafters inserted these words in order to pressure states to establish their own exchanges, but the legislative history offers scant evidence of this intent. And the three dozen states in question either failed to notice or disregarded it.

How this explanation sways the justices will determine whether the language drafted by Congress means that nearly 6.4 million low- and middle-income people are not eligible for the overhaul’s tax subsidies because they live in a state that chose to rely on the federal government’s, rather than to establish its own online insurance marketplace.

Many opponents of the PPACA say that section 36B “means what it says,” as conservative Justice Antonin Scalia implied at the March 4 oral argument, even if the wording “may not be the statute [Congress] intended” and even assuming that it might “produce disastrous consequences.”

To the contrary, say supporters, the law’s overall text, structure, design, and history make it clear that Congress intended to make subsidies available in all 50 states. They say the challengers’ interpretation would defeat the law’s purpose of making health insurance widely affordable. The Internal Revenue Service came to the same conclusion in an interpretive rule.

Justice Samuel Alito has suggested the possibility of delaying until 2016 the effective date of any decision against the Act. Such a delay, he said, would give the states and Congress time to avoid the disruption that would be caused if the court ruled that the premium subsidies now available in the three-dozen states using are illegal.

Justice Clarence Thomas is expected to vote with Scalia and Alito. The four liberal justices — Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan — seemed poised to line up with President Obama. So the president will win if either Chief Justice John Roberts or Justice Anthony Kennedy sides with him.

While Kennedy’s vote is still up in the air, PPACA supporters were cheered by his assertion to the lawyer challenging the subsidies that “there’s a serious constitutional problem if we adopt your argument.” Kennedy reasoned that the states are being unconstitutionally “coerced” if, as the challengers argue, the law requires them either to establish their own exchanges or see their residents disqualified from the subsidies.

The only way to avoid constitutional problems, suggested Kennedy, may be to resolve any ambiguities in President Obama’s favor. This seemed inconsistent with the suggestions by Scalia, Alito, and the challengers that the relevant language is free of ambiguity and without constitutional problems.

As for Chief Justice Roberts, court-watchers were stunned when he joined the four liberal justices and upheld the individual mandate in the 2012 decision National Federation of Independent Business v. Sebelius.

Source: Kaiser Health News; June 17, 2015.

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