The premise of the latest legal attack on Obamacare has always been shaky. An email that a key Senate staffer wrote in January 2010 would appear to make it even shakier.
Next month, the Supreme Court will hear oral arguments in King v. Burwell, a case about what the text of the Affordable Care Act actually means. The lawsuit, conceived and promoted by longtime Obamacare critics, alleges that Congress intended to make the availability of the Affordable Care Act’s financial assistance contingent upon the actions of state officials.
The plaintiffs’ argument goes like this: You can get tax credits worth hundreds or even thousands of dollars a year to help buy insurance, but only if the officials in your state have decided to operate an insurance “exchange” — a special marketplace, with highly regulated policies, for people who don’t have access to employer-sponsored plans. If you live in a state where officials have chosen not to operate an exchange, the argument goes, then you’re not supposed to get those tax credits. The federal government has built an exchange, but, according to the lawsuit, it can’t offer the same financial assistance that the state exchanges do.
If five justices agree with these arguments, the consequences would be devastating. Only in about one-third of the states, plus the District of Columbia, have officials agreed to operate exchanges. In Florida, Ohio, Texas and the rest of the country, state officials have opted not to act. The millions of people in those states now buying deeply discounted Obamacare insurance through healthcare.gov would have to pay substantially more for that coverage. These people are largely working- or middle-class, and many are self-employed or have pre-existing medical conditions. The higher premiums would frequently be prohibitive, forcing many and probably most to give up insurance altogether. The ensuing drop in demand for policies could wreak havoc with insurance markets, forcing some insurers to leave and others to jack up prices, since healthy people in particular would be more likely to forgo insurance.
Why might the Supreme Court unleash such chaos? Because of a few key words in the Affordable Care Act statute — in particular, a section that authorizes the federal government to distribute tax credits in exchanges “established by the State” without any reference to exchanges run by the federal government. Promoters of the King lawsuit — such as Michael Cannon, director of health policy studies at the libertarian Cato Institute — say that passage is there for a reason. According to their interpretation, Congress supposedly wanted use the tax credits as an incentive for states to act, and deliberately wrote a law that would punish states that did not. To bolster their case, the lawsuit’s promoters have pulled some pieces of evidence from the historical record — most famously, comments that MIT economist Jonathan Gruber, a key adviser to officials and lawmakers writing the bill, made in subsequent academic lectures.
Notwithstanding Gruber’s comments, which he has said were mistaken, the bulk of evidence seems to suggest that Cannon and his supporters are wrong. Courts traditionally read laws in their entirety, rather than focusing on isolated passages, and other sections of the law suggest that subsidies are supposed to flow in all states. One key provision, for example, authorizes the federal government to create and “establish and operate such Exchange within the Senate” — and to take “such actions as are necessary to implement such other requirements.”
–
“I really think the exchange thing is a red herring,” she wrote. “When you remove the perception, our bills have always been pretty similar. They said state first, some sort of fall back second. Ours said state’s can opt out otherwise national plan….”
These emails don’t prove that Obamacare’s authors intended to make subsidies available in all states. But to believe Congress intended otherwise, you also have to believe that both Curtis and McDonough, who cared deeply about expanding coverage and were among a tiny circle of staffers hashing out legislative language, understood that some states might not build exchanges and didn’t care that people in those states would lose out on insurance. You also have to believe they are lying, or at least stricken with amnesia about congressional intent, since they have said publicly that the premise of the lawsuit is false. And you have to believe the same thing about all of the other officials and advisers who have expressed identical sentiments.
Of course, the issue isn’t whether you or I believe those things. It’s whether five justices of the Supreme Court do. The outcome of this case — and the well-being of millions of Americans — depends on it.
