King vs. Burwell: Supreme Court Backs Federal Health Law Subsidies

Screen Shot 2015-06-25 at 10.44.49 AMIn a 6-3 ruling, the Supreme Court ruled that the federal health law may provide subsidies to help Americans buy insurance on the state exchanges, officially putting a stop to one of the slowest-moving and arguably most mind-numbingly boring — if important — news stories in recent history (with all due apologies to tax credit enthusiasts and the American Academy of Actuaries).

More importantly, the ruling means that 30 million Americans will continue to be eligible for health insurance through the exchanges. Practically speaking, the decision eliminates the last major challenge to the Affordable Care Act.

Health stocks rose on the news, as the uncertainty that has been shadowing hospital and health plan stocks for months was eliminated.

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The dissenting opinion in King, authored by Justice Scalia, is already being called an “instant classic*,” is replete with memorable zingers such as:

“Words no longer have meaning if an Exchange that is not established by a State is “established by the State” and “..It is bad enough for a court to cross out “by the State” once. But seven times?

Dissenting opinions in important cases, of course, are almost always hailed as “instant classics” by supporters, just as they are thrashed as “incoherent judge-babble” by critics.

So to be taken with a grain of salt. Or not.

The line that is likely to be remembered, and quoted most widely by opponents of the Affordable Care Act, however, is this one:

“The Act that Congress passed makes tax credits available only on an ‘Exchange established by the State.’ This Court, however, concludes that this limitation would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.”

We present the Scalia opinion in full for its sheer entertainment value (which is high) and for its evidentiary value as a historic example of judicial persnicketiness. The PDF of the court’s ruling is here.

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The Patient Protection and Affordable Care Act makes major reforms to the American health-insurance market. It provides, among other things, that every State “shall . . . establish an American Health Benefit Exchange”—a marketplace where people can shop for health-insurance plans. 42 U. S. C. §18031(b)(1). And it provides that if a State does not comply with this instruction, the Secretary of Health and Human Services must “establish and operate such Exchange within the State.” §18041(c)(1). A separate part of the Act—housed in §36B of the Internal Revenue Code—grants “premium tax credits” to subsidize certain purchases of health insurance made on Exchanges. The tax credit consists of “premium assistance amounts” for “coverage months.” 26 U. S. C. §36B(b)(1). An individual has a coverage month only when he is covered by an insurance plan “that was enrolled in through an Exchange established by the State under [§18031].” §36B(c)(2)(A).

And the law ties the size of the premium assistance amount to the premiums for health plans which cover the individual “and which were enrolled in through an Exchange established by the State under [§18031].” §36B(b)(2)(A). The premium assistance amount further depends on the cost of certain other insurance plans “offered through the same Exchange.” §36B(b)(3)(B)(i).

This case requires us to decide whether someone who buys insurance on an Exchange established by the Secretary gets tax credits. You would think the answer would be obvious—so obvious there would hardly be a need for the Supreme Court to hear a case about it. In order to receive any money under §36B, an individual must enroll in an insurance plan through an “Exchange established by the State.” The Secretary of Health and Human Services is not a State. So an Exchange established by the Secretary is not an Exchange established by the State—which means people who buy health insurance through such an Exchange get no money under §36B. Words no longer have meaning if an Exchange that is not established by a State is “established by the State.”

It is hard to come up with a clearer way to limit tax credits to state Exchanges than to use the words “established by the State.” And it is hard to come up with a reason to include the words “by the State” other than the purpose of limiting credits to state Exchanges. “[T]he plain, obvious, and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.” Lynch v. Alworth-Stephens Co., 267 U. S. 364, 370 (1925) (internal quotation marks omitted). Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.

II The Court interprets §36B to award tax credits on both federal and state Exchanges. It accepts that the “most natural sense” of the phrase “Exchange established by the State” is an Exchange established by a State. Ante, at 11. (Understatement, thy name is an opinion on the Affordable Care Act!) Yet the opinion continues, with no semblance of shame, that “it is also possible that the phrase refers to all Exchanges—both State and Federal.”

Ante, at 13. (Impossible possibility, thy name is an opinion on the Affordable Care Act!) The Court claims that “the context and structure of the Act compel [it] to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.”

Ante, at 21. I wholeheartedly agree with the Court that sound interpretation requires paying attention to the whole law, not homing in on isolated words or even isolated sections. Context always matters. Let us not forget, however, why context matters: It is a tool for understanding the terms of the law, not an excuse for rewriting them. Any effort to understand rather than to rewrite a law must accept and apply the presumption that lawmakers use words in “their natural and ordinary signification.” Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1, 12 (1878). Ordinary connotation does not always prevail, but the more unnatural the proposed interpretation of a law, the more compelling the contextual evidence must be to show that it is correct. Today’s interpretation is not merely unnatural; it is unheard of. Who would ever have dreamt that “Exchange established by the State” means “Exchange established by the State or the Federal Government”? Little short of an express statutory definition could justify adopting this singular reading.

4 Yet the only pertinent definition here provides that “State” means “each of the 50 States and the District of Columbia.” 42 U. S. C. §18024(d). Because the Secretary is neither one of the 50 States nor the District of Columbia, that definition positively contradicts the eccentric theory that an Exchange established by the Secretary has been established by the State. Far from offering the overwhelming evidence of meaning needed to justify the Court’s interpretation, other contextual clues undermine it at every turn. To begin with, other parts of the Act sharply distinguish between the establishment of an Exchange by a State and the establishment of an Exchange by the Federal Government. The States’ authority to set up Exchanges comes from one provision, §18031(b); the Secretary’s authority comes from an entirely different provision, §18041(c). Funding for States to establish Exchanges comes from one part of the law, §18031(a); funding for the Secretary to establish Exchanges comes from an entirely different part of the law, §18121. States generally run state-created Exchanges; the Secretary generally runs federally created Exchanges. §18041(b)–(c). And the Secretary’s authority to set up an Exchange in a State depends upon the State’s “[f]ailure to establish [an] Exchange.” §18041(c) (emphasis added).

Provisions such as these destroy any pretense that a federal Exchange is in some sense also established by a State. Reading the rest of the Act also confirms that, as relevant here, there are only two ways to set up an Exchange in a State: establishment by a State and establishment by the Secretary. §§18031(b), 18041(c). So saying that an Exchange established by the Federal Government is “established by the State” goes beyond giving words bizarre meanings; it leaves the limiting phrase “by the State” with no operative effect at all. That is a stark violation of the elementary principle that requires an interpreter “to give dissenting effect, if possible, to every clause and word of a statute.” Montclair v. Ramsdell, 107 U. S. 147, 152 (1883).

In weighing this argument, it is well to remember the difference between giving a term a meaning that duplicates another part of the law, and giving a term no meaning at all. Lawmakers sometimes repeat themselves—whether out of a desire to add emphasis, a sense of belt-andsuspenders caution, or a lawyerly penchant for doublets (aid and abet, cease and desist, null and void). Lawmakers do not, however, tend to use terms that “have no operation at all.” Marbury v. Madison, 1 Cranch 137, 174 (1803). So while the rule against treating a term as a redundancy is far from categorical, the rule against treating it as a nullity is as close to absolute as interpretive principles get. The Court’s reading does not merely give “by the State” a duplicative effect; it causes the phrase to have no effect whatever. Making matters worse, the reader of the whole Act will come across a number of provisions beyond §36B that refer to the establishment of Exchanges by States. Adopting the Court’s interpretation means nullifying the term “by the State” not just once, but again and again throughout the Act. Consider for the moment only those parts of the Act that mention an “Exchange established by the State” in connection with tax credits:  The formula for calculating the amount of the tax credit, as already explained, twice mentions “an Exchange established by the State.” 26 U. S. C. §36B(b)(2)(A), (c)(2)(A)(i).

 The Act directs States to screen children for eligibility for “[tax credits] under section 36B” and for “any other assistance or subsidies available for coverage obtained through” an “Exchange established by the State.” 42 U. S. C. §1396w–3(b)(1)(B)–(C).

 The Act requires “an Exchange established by the 6 KING v. BURWELL SCALIA, J., dissenting State” to use a “secure electronic interface” to determine eligibility for (among other things) tax credits. §1396w–3(b)(1)(D).

 The Act authorizes “an Exchange established by the State” to make arrangements under which other state agencies “determine whether a State resident is eligible for [tax credits] under section 36B.” §1396w– 3(b)(2).

 The Act directs States to operate Web sites that allow anyone “who is eligible to receive [tax credits] under section 36B” to compare insurance plans offered through “an Exchange established by the State.” §1396w–3(b)(4).

 One of the Act’s provisions addresses the enrollment of certain children in health plans “offered through an Exchange established by the State” and then discusses the eligibility of these children for tax credits. §1397ee(d)(3)(B).

It is bad enough for a court to cross out “by the State” once. But seven times? Congress did not, by the way, repeat “Exchange established by the State under [§18031]” by rote throughout the Act. Quite the contrary, clause after clause of the law uses a more general term such as “Exchange” or “Exchange established under [§18031].” See, e.g., 42 U. S. C. §§18031(k), 18033; 26 U. S. C. §6055.

It is common sense that any speaker who says “Exchange” some of the time, but “Exchange established by the State” the rest of the time, probably means something by the contrast. Equating establishment “by the State” with establishment by the Federal Government makes nonsense of other parts of the Act. The Act requires States to ensure (on pain of losing Medicaid funding) that any “Exchange established by the State” uses a “secure electronic interface” to determine an individual’s eligibility for various benefits (including tax credits). 42 U. S. C. §1396w– 3(b)(1)(D).

How could a State control the type of electronic interface used by a federal Exchange? The Act allows a State to control contracting decisions made by “an Exchange established by the State.” §18031(f)(3). Why would a State get to control the contracting decisions of a federal Exchange? The Act also provides “Assistance to States to establish American Health Benefit Exchanges” and directs the Secretary to renew this funding “if the State . . . is making progress . . . toward . . . establishing an Exchange.” §18031(a).

Does a State that refuses to set up an Exchange still receive this funding, on the premise that Exchanges established by the Federal Government are really established by States? It is presumably in order to avoid these questions that the Court concludes that federal Exchanges count as state Exchanges only “for purposes of the tax credits.” Ante, at 13. (Contrivance, thy name is an opinion on the Affordable Care Act!) It is probably piling on to add that the Congress that wrote the Affordable Care Act knew how to equate two different types of Exchanges when it wanted to do so. The Act includes a clause providing that “[a] territory that . . . establishes . . . an Exchange . . . shall be treated as a State” for certain purposes. §18043(a) (emphasis added).

Tellingly, it does not include a comparable clause providing that the Secretary shall be treated as a State for purposes of §36B when she establishes an Exchange. Faced with overwhelming confirmation that “Exchange established by the State” means what it looks like it means, the Court comes up with argument after feeble argument to support its contrary interpretation. None of its tries comes close to establishing the implausible conclusion that Congress used “by the State” to mean “by the State or not by the State.” The Court emphasizes that if a State does not set up an 8 KING v. BURWELL SCALIA, J., dissenting Exchange, the Secretary must establish “such Exchange.” §18041(c). It claims that the word “such” implies that federal and state Exchanges are “the same.” Ante, at 13.

To see the error in this reasoning, one need only consider a parallel provision from our Constitution: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations.” Art. I, §4, cl. 1 (emphasis added). Just as the Affordable Care Act directs States to establish Exchanges while allowing the Secretary to establish “such Exchange” as a fallback, the Elections Clause directs state legislatures to prescribe election regulations while allowing Congress to make “such Regulations” as a fallback. Would anybody refer to an election regulation made by Congress as a “regulation prescribed by the state legislature”? Would anybody say that a federal election law and a state election law are in all respects equivalent? Of course not.

The word “such” does not help the Court one whit. The Court’s argument also overlooks the rudimentary principle that a specific provision governs a general one. Even if it were true that the term “such Exchange” in §18041(c) implies that federal and state Exchanges are the same in general, the term “established by the State” in §36B makes plain that they differ when it comes to tax credits in particular. The Court’s next bit of interpretive jiggery-pokery involves other parts of the Act that purportedly presuppose the availability of tax credits on both federal and state Exchanges. Ante, at 13–14. It is curious that the Court is willing to subordinate the express words of the section that grants tax credits to the mere implications of other provisions with only tangential connections to tax credits. One would think that interpretation would work the other way around. In any event, each of the provisions mentioned by the Court is perfectly consistent with limiting tax credits to state Exchanges.

One of them says that the minimum functions of an Exchange include (alongside several tasks that have nothing to do with tax credits) setting up an electronic calculator that shows “the actual cost of coverage after the application of any premium tax credit.” 42 U. S. C. §18031(d)(4)(G). What stops a federal Exchange’s electronic calculator from telling a customer that his tax credit is zero? Another provision requires an Exchange’s outreach program to educate the public about health plans, to facilitate enrollment, and to “distribute fair and impartial information” about enrollment and “the availability of premium tax credits.” §18031(i)(3)(B). What stops a federal Exchange’s outreach program from fairly and impartially telling customers that no tax credits are available?

A third provision requires an Exchange to report information about each insurance plan sold— including level of coverage, premium, name of the insured, and “amount of any advance payment” of the tax credit. 26 U. S. C. §36B(f)(3). What stops a federal Exchange’s report from confirming that no tax credits have been paid out? The Court persists that these provisions “would make little sense” if no tax credits were available on federal Exchanges. Ante, at 14. Even if that observation were true, it would show only oddity, not ambiguity. Laws often include unusual or mismatched provisions. The Affordable Care Act spans 900 pages; it would be amazing if its provisions all lined up perfectly with each other. This Court “does not revise legislation . . . just because the text as written creates an apparent anomaly.” Michigan v. Bay Mills Indian Community, 572 U. S. ___, ___ (2014) (slip op., at 10). At any rate, the provisions cited by the Court are not particularly unusual. Each requires an Exchange to perform a standardized series of tasks, some aspects of which relate in some way to tax credits. It is entirely natural for slight mismatches to occur when, as here, lawmakers draft “a single statutory provision” to cover “different kinds” of situations. Robers v. United States, 572 U. S. ___, ___ (2014) (slip op., at 4). Lawmakers need not, and often do not, “write extra language specifically exempting, phrase by phrase, applications in respect to which a portion of a phrase is not needed.” Ibid. Roaming even farther afield from §36B, the Court turns to the Act’s provisions about “qualified individuals.” Ante, at 10–11. Qualified individuals receive favored treatment on Exchanges, although customers who are not qualified individuals may also shop there. See Halbig v. Burwell, 758 F. 3d 390, 404–405 (CADC 2014).

The Court claims that the Act must equate federal and state establishment of Exchanges when it defines a qualified individual as someone who (among other things) lives in the “State that established the Exchange,” 42 U. S. C. §18032(f)(1)(A). Otherwise, the Court says, there would be no qualified individuals on federal Exchanges, contradicting (for example) the provision requiring every Exchange to take the “‘interests of qualified individuals’” into account when selecting health plans. Ante, at 11 (quoting §18031(e)(1)(b)). Pure applesauce. Imagine that a university sends around a bulletin reminding every professor to take the “interests of graduate students” into account when setting office hours, but that some professors teach only undergraduates. Would anybody reason that the bulletin implicitly presupposes that every professor has “graduate students,” so that “graduate students” must really mean “graduate or undergraduate students”? Surely not. Just as one naturally reads instructions about graduate students to be inapplicable to the extent a particular professor has no such students, so too would one naturally read instructions about qualified individuals to be inapplicable to the extent a particular Exchange has no such individuals. There is no need to rewrite the term “State that established the Exchange” in the definition of Cite as dissenting “qualified individual,” much less a need to rewrite the separate term “Exchange established by the State” in a separate part of the Act.

Least convincing of all, however, is the Court’s attempt to uncover support for its interpretation in “the structure of Section 36B itself.” Ante, at 19. The Court finds it strange that Congress limited the tax credit to state Exchanges in the formula for calculating the amount of the credit, rather than in the provision defining the range of taxpayers eligible for the credit.

Had the Court bothered to look at the rest of the Tax Code, it would have seen that the structure it finds strange is in fact quite common. Consider, for example, the many provisions that initially make taxpayers of all incomes eligible for a tax credit, only to provide later that the amount of the credit is zero if the taxpayer’s income exceeds a specified threshold. See, e.g., 26 U. S. C. §24 (child tax credit); §32 (earned-income tax credit); §36 (first-time-homebuyer tax credit).

Or consider, for an even closer parallel, a neighboring provision that initially makes taxpayers of all States eligible for a credit, only to provide later that the amount of the credit may be zero if the taxpayer’s State does not satisfy certain requirements. See §35 (health-insurance-costs tax credit). One begins to get the sense that the Court’s insistence on reading things in context applies to “established by the State,” but to nothing else. For what it is worth, lawmakers usually draft tax-credit provisions the way they do—i.e., the way they drafted §36B—because the mechanics of the credit require it. Many Americans move to new States in the middle of the year. Mentioning state Exchanges in the definition of “coverage month”—rather than (as the Court proposes) in the provisions concerning taxpayers’ eligibility for the credit—accounts for taxpayers who live in a State with a state Exchange for a part of the year, but a State with a federal Exchange for the rest of the year. In addition, dissenting §36B awards a credit with respect to insurance plans “which cover the taxpayer, the taxpayer’s spouse, or any dependent . . . of the taxpayer and which were enrolled in through an Exchange established by the State.” §36B(b)(2)(A) (emphasis added).

If Congress had mentioned state Exchanges in the provisions discussing taxpayers’ eligibility for the credit, a taxpayer who buys insurance from a federal Exchange would get no money, even if he has a spouse or dependent who buys insurance from a state Exchange—say a child attending college in a different State. It thus makes perfect sense for “Exchange established by the State” to appear where it does, rather than where the Court suggests. Even if that were not so, of course, its location would not make it any less clear. The Court has not come close to presenting the compelling contextual case necessary to justify departing from the ordinary meaning of the terms of the law. Quite the contrary, context only underscores the outlandishness of the Court’s interpretation. Reading the Act as a whole leaves no doubt about the matter: “Exchange established by the State” means what it looks like it means. III For its next defense of the indefensible, the Court turns to the Affordable Care Act’s design and purposes. As relevant here, the Act makes three major reforms. The guaranteed-issue and community-rating requirements prohibit insurers from considering a customer’s health when deciding whether to sell insurance and how much to charge, 42 U. S. C. §§300gg, 300gg–1; its famous individual mandate requires everyone to maintain insurance coverage or to pay what the Act calls a “penalty,” 26 U. S. C. §5000A(b)(1), and what we have nonetheless called a tax, see National Federation of Independent Business v. Sebelius, 567 U. S. ___, ___ (2012) (slip op., at 39); and its tax credits help make insurance more affordable. The Court reasons that Congress intended these three reforms to “work together to expand insurance coverage”; and because the first two apply in every State, so must the third. Ante, at 16. This reasoning suffers from no shortage of flaws. To begin with, “even the most formidable argument concerning the statute’s purposes could not overcome the clarity [of] the statute’s text.” Kloeckner v. Solis, 568 U. S. ___, ___, n. 4 (2012) (slip op., at 14, n. 4). Statutory design and purpose matter only to the extent they help clarify an otherwise ambiguous provision. Could anyone maintain with a straight face that §36B is unclear?

To mention just the highlights, the Court’s interpretation clashes with a statutory definition, renders words inoperative in at least seven separate provisions of the Act, overlooks the contrast between provisions that say “Exchange” and those that say “Exchange established by the State,” gives the same phrase one meaning for purposes of tax credits but an entirely different meaning for other purposes, and (let us not forget) contradicts the ordinary meaning of the words Congress used. On the other side of the ledger, the Court has come up with nothing more than a general provision that turns out to be controlled by a specific one, a handful of clauses that are consistent with either understanding of establishment by the State, and a resemblance between the tax-credit provision and the rest of the Tax Code. If that is all it takes to make something ambiguous, everything is ambiguous. Having gone wrong in consulting statutory purpose at all, the Court goes wrong again in analyzing it. The purposes of a law must be “collected chiefly from its words,” not “from extrinsic circumstances.” Sturges v. Crowninshield, 4 Wheat. 122, 202 (1819) (Marshall, C. J.). Only by concentrating on the law’s terms can a judge hope to uncover the scheme of the statute, rather than some other scheme that the judge thinks desirable.

Like it or not, the express terms of the Affordable Care Act make only two of the three reforms mentioned by the Court applicable in States that do not establish Exchanges. It is perfectly possible for them to operate independently of tax credits. The guaranteed-issue and community-rating requirements continue to ensure that insurance companies treat all customers the same no matter their health, and the individual mandate continues to encourage people to maintain coverage, lest they be “taxed.” The Court protests that without the tax credits, the number of people covered by the individual mandate shrinks, and without a broadly applicable individual mandate the guaranteed-issue and community-rating requirements “would destabilize the individual insurance market.” Ante, at 15. If true, these projections would show only that the statutory scheme contains a flaw; they would not show that the statute means the opposite of what it says. Moreover, it is a flaw that appeared as well in other parts of the Act. A different title established a long-term-care insurance program with guaranteed-issue and community-rating requirements, but without an individual mandate or subsidies. §§8001–8002, 124 Stat. 828–847 (2010). This program never came into effect “only because Congress, in response to actuarial analyses predicting that the [program] would be fiscally unsustainable, repealed the provision in 2013.” Halbig, 758 F. 3d, at 410. How could the Court say that Congress would never dream of combining guaranteed-issue and community rating requirements with a narrow individual mandate, when it combined those requirements with no individual mandate in the context of long-term-care insurance? Similarly, the Department of Health and Human Services originally interpreted the Act to impose guaranteed issue and community-rating requirements in the Federal Territories, even though the Act plainly does not make the individual mandate applicable there. Ibid.; see 26 U. S. C. C§5000A(f)(4); 42 U. S. C. §201(f). “This combination, predictably, [threw] individual insurance markets in the territories into turmoil.” Halbig, supra, at 410. Responding to complaints from the Territories, the Department at first insisted that it had “no statutory authority” to address the problem and suggested that the Territories “seek legislative relief from Congress” instead. Letter from G. Cohen, Director of the Center for Consumer Information and Insurance Oversight, to S. Igisomar, Secretary of Commerce of the Commonwealth of Northern Mariana Islands (July 12, 2013).

The Department changed its mind a year later, after what it described as “a careful review of [the] situation and the relevant statutory language.” Letter from M. Tavenner, Administrator of the Centers for Medicare and Medicaid Services, to G. Francis, Insurance Commissioner of the Virgin Islands (July 16, 2014). How could the Court pronounce it “implausible” for Congress to have tolerated instability in insurance markets in States with federal Exchanges, ante, at 17, when even the Government maintained until recently that Congress did exactly that in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands? Compounding its errors, the Court forgets that it is no more appropriate to consider one of a statute’s purposes in isolation than it is to consider one of its words that way. No law pursues just one purpose at all costs, and no statutory scheme encompasses just one element. Most relevant here, the Affordable Care Act displays a congressional preference for state participation in the establishment of Exchanges: Each State gets the first opportunity to set up its Exchange, 42 U. S. C. §18031(b); States that take up the opportunity receive federal funding for “activities . . . related to establishing” an Exchange, §18031(a)(3); and the Secretary may establish an Exchange in a State only as a fallback, §18041(c). But setting up and running an dissenting Exchange involve significant burdens—meeting strict deadlines, §18041(b), implementing requirements related to the offering of insurance plans, §18031(d)(4), setting up outreach programs, §18031(i), and ensuring that the Exchange is self-sustaining by 2015, §18031(d)(5)(A).

A State would have much less reason to take on these burdens if its citizens could receive tax credits no matter who establishes its Exchange. (Now that the Internal Revenue Service has interpreted §36B to authorize tax credits everywhere, by the way, 34 States have failed to set up their own Exchanges. Ante, at 6.) So even if making credits available on all Exchanges advances the goal of improving healthcare markets, it frustrates the goal of encouraging state involvement in the implementation of the Act. This is what justifies going out of our way to read “established by the State” to mean “established by the State or not established by the State”? Worst of all for the repute of today’s decision, the Court’s reasoning is largely self-defeating. The Court predicts that making tax credits unavailable in States that do not set up their own Exchanges would cause disastrous economic consequences there. If that is so, however, wouldn’t one expect States to react by setting up their own Exchanges? And wouldn’t that outcome satisfy two of the Act’s goals rather than just one: enabling the Act’s reforms to work and promoting state involvement in the Act’s implementation? The Court protests that the very existence of a federal fallback shows that Congress expected that some States might fail to set up their own Exchanges. Ante, at 19. So it does. It does not show, however, that Congress expected the number of recalcitrant States to be particularly large. The more accurate the Court’s dire economic predictions, the smaller that number is likely to be. That reality destroys the Court’s pretense that applying the law as written would imperil “the viability of the entire Affordable Care Act.” Ante, at 20. All in all, the Court’s arguments about the law’s purpose and design are no more convincing than its arguments about context.


Perhaps sensing the dismal failure of its efforts to show that “established by the State” means “established by the State or the Federal Government,” the Court tries to palm off the pertinent statutory phrase as “inartful drafting.” Ante, at 14. This Court, however, has no free-floating power “to rescue Congress from its drafting errors.” Lamie v. United States Trustee, 540 U. S. 526, 542 (2004) (internal quotation marks omitted). Only when it is patently obvious to a reasonable reader that a drafting mistake has occurred may a court correct the mistake. The occurrence of a misprint may be apparent from the face of the law, as it is where the Affordable Care Act “creates three separate Section 1563s.” Ante, at 14.

But the Court does not pretend that there is any such indication of a drafting error on the face of §36B. The occurrence of a misprint may also be apparent because a provision decrees an absurd result—a consequence “so monstrous, that all mankind would, without hesitation, unite in rejecting the application.” Sturges, 4 Wheat., at 203. But §36B does not come remotely close to satisfying that demanding standard. It is entirely plausible that tax credits were restricted to state Exchanges deliberately—for example, in order to encourage States to establish their own Exchanges. We therefore have no authority to dismiss the terms of the law as a drafting fumble. Let us not forget that the term “Exchange established by the State” appears twice in §36B and five more times in other parts of the Act that mention tax credits. What are the odds, do you think, that the same slip of the pen occurred in seven separate places? No provision of the Act— none at all—contradicts the limitation of tax credits to state Exchanges. And as I have already explained, uses the term “Exchange established by the State” beyond the context of tax credits look anything but accidental. Supra, at 6. If there was a mistake here, context suggests it was a substantive mistake in designing this part of the law, not a technical mistake in transcribing it. The Court’s decision reflects the philosophy that judges should endure whatever interpretive distortions it takes in order to correct a supposed flaw in the statutory machinery. That philosophy ignores the American people’s decision to give Congress “[a]ll legislative Powers” enumerated in the Constitution. Art. I, §1. They made Congress, not this Court, responsible for both making laws and mending them. This Court holds only the judicial power—the power to pronounce the law as Congress has enacted it. We lack the prerogative to repair laws that do not work out in practice, just as the people lack the ability to throw us out of office if they dislike the solutions we concoct. We must always remember, therefore, that “[o]ur task is to apply the text, not to improve upon it.” Pavelic & LeFlore v. Marvel Entertainment Group, Div. of Cadence Industries Corp., 493 U. S. 120, 126 (1989).

Trying to make its judge-empowering approach seem respectful of congressional authority, the Court asserts that its decision merely ensures that the Affordable Care Act operates the way Congress “meant [it] to operate.” Ante, at 17. First of all, what makes the Court so sure that Congress “meant” tax credits to be available everywhere? Our only evidence of what Congress meant comes from the terms of the law, and those terms show beyond all question that tax credits are available only on state Exchanges. More importantly, the Court forgets that ours is a government of laws and not of men. That means we are governed by the terms of our laws, not by the unenacted will of our lawmakers. “If Congress enacted into law Cite as: 576 U. S. ____ (2015) 19 SCALIA, J., dissenting something different from what it intended, then it should amend the statute to conform to its intent.” Lamie, supra, at 542. In the meantime, this Court “has no roving license . . . to disregard clear language simply on the view that . . . Congress ‘must have intended’ something broader.” Bay Mills, 572 U. S., at ___ (slip op., at 11). Even less defensible, if possible, is the Court’s claim that its interpretive approach is justified because this Act “does not reflect the type of care and deliberation that one might expect of such significant legislation.” Ante, at 14– 15.

It is not our place to judge the quality of the care and deliberation that went into this or any other law. A law enacted by voice vote with no deliberation whatever is fully as binding upon us as one enacted after years of study, months of committee hearings, and weeks of debate. Much less is it our place to make everything come out right when Congress does not do its job properly. It is up to Congress to design its laws with care, and it is up to the people to hold them to account if they fail to carry out that responsibility. Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitation of tax credits to state Exchanges. If Congress values above everything else the Act’s applicability across the country, it could make tax credits available in every Exchange. If it prizes state involvement in the Act’s implementation, it could continue to limit tax credits to state Exchanges while taking other steps to mitigate the economic consequences predicted by the Court. If Congress wants to accommodate both goals, it could make tax credits available everywhere while offering new incentives for States to set up their own Exchanges. And if Congress thinks that the present design of the Act works well enough, it could do nothing. Congress could also do something else altogether, entirely abandoning the structure of the Affordable Care Act. The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude. Just ponder the significance of the Court’s decision to take matters into its own hands. The Court’s revision of the law authorizes the Internal Revenue Service to spend tens of billions of dollars every year in tax credits on federal Exchanges. It affects the price of insurance for millions of Americans. It diminishes the participation of the States in the implementation of the Act. It vastly expands the reach of the Act’s individual mandate, whose scope depends in part on the availability of credits. What a parody today’s decision makes of Hamilton’s assurances to the people of New York: “The legislature not only commands the purse but prescribes the rules by which the duties and rights of every citizen are to be regulated. The judiciary, on the contrary, has no influence over . . . the purse; no direction . . . of the wealth of society, and can take no active resolution whatever. It may truly be said to have neither FORCE nor WILL but merely judgment.” The Federalist No. 78, p. 465 (C. Rossiter ed. 1961). * * * Today’s opinion changes the usual rules of statutory interpretation for the sake of the Affordable Care Act. That, alas, is not a novelty. In National Federation of Independent Business v. Sebelius, 567 U. S. ___, this Court revised major components of the statute in order to save them from unconstitutionality. The Act that Congress passed provides that every individual “shall” maintain insurance or else pay a “penalty.” 26 U. S. C. §5000A. This Court, however, saw that the Commerce Clause does not authorize a federal mandate to buy health insurance. So it rewrote the mandate-cum-penalty as a tax. 567 U. S., at ___–___ (principal opinion) (slip op., at 15–45). The Act that Congress passed also requires every State to  accept an expansion of its Medicaid program, or else risk losing all Medicaid funding. 42 U. S. C. §1396c. This Court, however, saw that the Spending Clause does not authorize this coercive condition. So it rewrote the law to withhold only the incremental funds associated with the Medicaid expansion. 567 U. S., at ___–___ (principal opinion) (slip op., at 45–58). Having transformed two major parts of the law, the Court today has turned its attention to a third. The Act that Congress passed makes tax credits available only on an “Exchange established by the State.” This Court, however, concludes that this limitation would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.

Perhaps the Patient Protection and Affordable Care Act will attain the enduring status of the Social Security Act or the Taft-Hartley Act; perhaps not. But this Court’s two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed (“penalty” means tax, “further [Medicaid] payments to the State” means only incremental Medicaid payments to the State, “established by the State” means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites. I dissent.

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7 replies »

  1. You, like Legend-In-His-Own-Mind Scalia, choose to willfully ignore the clear, trumping plain English words of ACA Section 1321, which spell out what the feds are to do in the face of state inaction under 1311(d). Calling Scalia’s incoherent, disingenous rant “brilliant” speaks volumes about you.

  2. As Justice Scalia points out in his brilliant, scathing dissent, the U.S. Supreme Court has turned somersaults to ‘defend the indefensible’ and uphold Obamacare at any cost to the rule of law. In deciding that ‘established by the State’ means the same thing as ‘not established by the State,’ it brings to three the number of major provisions it has rewritten to sustain the abomination of Obamacare.

  3. Seems if Republicans were hung up on the wording they could have offered to legislatively fix it – if it needed it so bad. No, all these efforts to strike down the ACA were Republicans waving the confederate flag in Obama’s face to deny him any victory.

    If the Supreme Court ruling was wrong then it was wrong for all the right reasons. But looking at who offered the dissent we see the usual conspirators.

  4. They tried to make it an issue of the meaning of the word “state.” But 1311 starts out “IN GENERAL” and then Section 1321 sets forth the federal authority in the event actual “states” (meaning those of the 50) fail to act on HIXs.

    BTW: I’d like to see the aggregate financial tally of what it cost to entertain this specious case. Would have paid for a LOT of actual health care.

  5. The primary issue is that there was never a legal argument that held water. It hinged on ‘what the meaning of the word state is.’ The earlier rulings were actually pretty clear and unambiguous except for the one lower court that was clearly politically driven (note the 3 votes against in today’s SCOTUS decision). Legal, vs. political, pundits have mostly held that the case was absurd and the only thing the Supreme Court was resolving was the political noise, not legal. If they opened this up then any law that had a single ambiguous use of a word in any congressional program, left or right, would be fair game for a challenge.