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Title Judicial Decision in the Final Hurdle of the Affordable Care Act

November 24, 2015
After undergoing political deliberation and social controversy, the Affordable Care Act has become better known as Obamacare. The Affordable Care Act is the most comprehensive overhaul of health insurance since the New Deal. The bill had three main requirements: insurance had to cover people with pre-existing conditions; almost all individuals had to buy some form of healthcare insurance; and the government had to help people who couldn’t afford insurance buy insurance through federal tax subsidies.[1]

By Cassie Sun, W’18

Both Congress and the White House intended all fifty states to receive federal funds for subsidies on health insurance. The bill was set up so that if individual states did not create an exchange through which their residents could receive federal tax subsidies on healthcare, the United States Department of Health and Human Services would create the exchange. Of the fifty states, sixteen choose to set up their own exchange through which federal subsidies would flow to citizens, and thirty-four states opted to use the exchange set up by the federal government.[1] This is established in Sections 1321 and 1311 of the Affordable Care Act.[2]

The constitutional question of the Affordable Care Act come from four simple words in Section 36B(a) of the thousand page long bill. Michael Cannon of the Cato Institute, a libertarian think tank, and Jonathan Adler, a professor at Case Western Reserve Law School, first pointed this issue out in an op-ed on the Washington Post.[3] Section 36B is primary an outline for the lengthy and complicated method that federal tax subsidies were to be calculated. However, within the section contained a statement claiming federal subsidies were only available to individuals who purchased their insurance from an “exchange established by the state.”[4] Thus, individual states must establish the program, and it is illegal for any federal department to establish the exchange. The argument started out as a “glitch” with the Affordable Care Act, gathering little attention from legal experts and politicians.[5]  Political opposition to the bill coupled with Cannon and Adler’s efforts to make their argument increasingly visible soon gave rise to several lawsuits that used the ambiguous phrase as its basis for overturning part of the Affordable Care Act.

King vs. Burwell did not deal with a constitutional matter but with a statutory one, questioning whether or not tax subsidies were available to individuals living in one of the thirty-four states that opted to use an exchange established by United States Department of Health and Human Services. A ruling in favor of the challenger would have undone a large part of the Affordable Care Act. Many taxpayers who could not afford health insurance would be left without any means to buy health insurance, defeating the purpose of the bill. It is widely believed that members of Congress and the White House Administration intended for the Affordable Care Act was to give all United States residence access to health care coverage. Its purpose was to grant residents in all fifty states access to federal tax subsidies regardless of whether or not that state had established its own exchange. Defendants of the bill point to Sections 1321 and 1311 as evidence that the bill was intended to allow the federal government to create an exchange.[6] However, challengers of the bill claim that the clause “established by the state” in Section 36B(a) was put there as a political move by conservatives or either incentivize states to comply with the Affordable Care Act or to undo the bill entirely.

In Chief Justice Robert’s majority opinion, he claimed that the “Affordable Care Act contains more than a few examples of inartful drafting,”[7] citing the complicated budgetary procedure, reconciliation, as the cause of such ambiguous wording. Because “Congress wrote key parts of the act behind closed doors, rather than through ‘the traditional legislative process,’” there were limited opportunities to debate and amend the bill.[8] However, Justice Roberts also cited the 1988 case United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd. as precedent for interpreting the text of the law in context of the broader meaning of the bill.[9]  Given that Section 36B(a) of the Affordable Care Act contains text that is ambiguous, Justice Roberts argues that it is then reasonable to look towards the intention of Congress when interpreting the law.

The dissenting opinion of Justice Scalia, Justice Thomas, and Justice Alito, nevertheless, contains a strong criticism of the way the court had interpreted the law. Justice Scalia claimed that the Supreme Court had no right to rewrite the law and that words must only be used “in ‘their natural and ordinary signification.’”[10] Section 36B(a) or the law makes it clear that federal tax subsidies were only available to individuals who purchased insurance through an exchange “established by the state,”[11]  and the United States by United States Department of Health and Human Services is not a state.  Six other areas of the Affordable Care Act uses the phrase “established by the state” in reference to only the fifty states and not the federal government[12]. Thus, to claim that the phrase can be used to include all fifty states as well as the federal government in only one section of the bill is an inconsistent and flawed interpretation[13]. Under the dissenting opinion’s interpretation, an estimated six point four million people would lose a total of about 1.7 billion dollars of insurance subsidies.[14] However, Justice Scalia argues that it is not the court’s job to speculate the intentions of Congress when creating the law or the consequences of its decision. Claiming “no law pursues one purpose at all costs,” Justice Scalia insists that it is Congress’s duty to deal with the limitations of providing tax subsidies.[15]

 While the majority opinion did not strictly interpret the text of Affordable Care Act, it ruled that the law should be enacted as Congress had meant for it to. The dissenting opinion may hold a legitimate claim, but it is clear that six out of nine Supreme Court justices do not believe that “inartful drafting” should void a law and leave six point four million individuals without health insurance. Looking at the history, structure, and writing process of the bill, traditionally conservative Chief Justice Roberts refused to undermine lawmakers’ efforts and intentions to grant universal healthcare coverage. A “glitch” within the piece of legislation should not cause the entire healthcare reform legislation to crumble. Thus, the Supreme Court exercised its power to interpret laws while also respecting Congress’s role in making those laws.[16]

  [1] http://kff.org/interactive/king-v-burwell-effects/

  [2] http://www.theatlantic.com/politics/archive/2015/05/the-soundbite-strategy-in-king-v-burwell/394328/


  [4] http://housedocs.house.gov/energycommerce/ppacacon.pdf

  [5] http://www.theatlantic.com/politics/archive/2015/05/the-soundbite-strategy-in-king-v-burwell/394328/

  [6] http://www.theatlantic.com/politics/archive/2015/05/the-soundbite-strategy-in-king-v-burwell/394328/

  [7] http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf

  [8] http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf



  [11] http://housedocs.house.gov/energycommerce/ppacacon.pdf

  [12] http://housedocs.house.gov/energycommerce/ppacacon.pdf





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