My Reactions to King v. Burwell

I am a strong opponent of Obamacare.  But once I realized that a decision in King v. Burwell denying subsidies to people who purchase insurance under the federal exchanges would not help the cause of repealing Obamacare and might hurt it, my attitude towards the case changed.  I felt much less politically invested in the issue and could more easily view it in an impartial manner.

Thus, I read with a relatively open mind the opinions by Chief Justice Roberts and Justice Scalia in the case.  Although I am a formalist (albeit a soft formalist), I do believe that conflicting provisions in a statute can render it ambiguous and that purpose is permissibly used to resolve an ambiguity – two key premises of Chief Justice Roberts’s opinion.  But in the end, I concluded that Justice Scalia had the better of the argument by a significant margin. 

In my view, Justice Scalia effectively rebutted the claim that the Affordable Care Act contained contradictory provisions.  The provisions limiting subsidies to exchanges established by the state were clear.  The other provisions emphasized by Roberts that appeared to contemplate subsidies in federal exchanges could be reconciled with the “established by the state” provision.  The drafting was hardly exemplary, but there was no clear contradiction, especially when one considered the important canon that one should try to reconcile two apparently contradictory provisions.

Since there was no contradiction, one would only depart from the clear statutory language if there was an absurdity.  For those who are less formalistic, one might find Roberts’s meaning of the statute if there was a much stronger evidence of purpose for that interpretation than for Scalia’s.  But neither standard justifies Robert’s decision.

Roberts claims that the purpose of preventing adverse selection (“death spirals”) justifies providing subsidies on federal exchanges, but as Scalia points out there is another plausible purpose – providing states with an incentive to establish exchanges.  And Congress in at least one other place actually prohibited charging applicants for insurance more based on their health condition under conditions similar to those that would govern insureds under federal exchanges.  Thus, Congress cannot be seen as eschewing such a result.

I have been debating some of my colleagues about this opinion, and their main argument is that Congress would not have wanted to allow “death spirals” merely to provide the states with an incentive.  But I don’t know how they know this.  Certainly, Jonathan Gruber didn’t think this.  Given that my colleagues support subsidies on federal exchanges, it is awfully convenient that they find this purpose argument compelling, which is the basic problem with modern versions of purposivism (as opposed to the narrower version that Hart & Sachs advocated in the Legal Process).

But it seems to me that there is an even stronger argument against their view.  Under the ACA, Congress provided that if a state chose not to accept the New Medicaid program (which vastly expanded the old Medicaid program), the state would lose all of its federal Medicaid funding.  That would have had enormous consequences for the poor people of that state.  Yet, Congress allowed that to happen, because it wanted the state to choose the New Medicaid program.  If Congress allowed that choice under the ACA, I do not know why one would doubt it would also allow the similar choice at issue in King.

Reader Discussion

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on June 29, 2015 at 14:49:15 pm

Of course, the Court found losing all the Medicaid funding too coercive--would they have thought the same thing about losing subsidies because a state didn't set up an exchange? If so would they have just said states that don't set up exchanges still have to get them or would they have to declare this section unconstitutional and just sent it back to Congress?

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Rudy Hernandez
on July 05, 2015 at 03:44:39 am

Randy Barnett addressed your question in a Volokh Conspiracy piece. He argued - persuasively, to my mind - that if SCOTUS concluded that the IRS rule was illegal, they would simply strike it down and wait for another lawsuit before addressing the constitutionality of the ACA so construed.

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Ken Kelly
on July 05, 2015 at 03:46:53 am
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Ken Kelly
on July 10, 2015 at 23:48:42 pm

Writing articles without reference to specific provisions of law relied on by CJ Roberts and Justice Scalia does not give objectivity and could only lead to spin.

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