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Affordable Care Act, Premium Tax Subsidies Survive King v. Burwell

Stand down from red alert! The Affordable Care Act livesKing v. Burwell is dead, and Justice Antonin Scalia is apoplectic.

I open with Scalia, because he is more fun, more scathing, and in the minority (with Thomas and Alito). Scalia scorches the majority’s reasoning as “absurd,” “Pure applesauce,” and “interpretive jiggery-pokery”:

Justice Antonin Scalia, on a less grouchy day
Justice Antonin Scalia, on a less grouchy day

Words no longer have meaning if an Exchange that is not established by a State is “established by the State.”

…(Understatement… Impossible possibility… Contrivance! Thy name is an opinion on the Affordable Care Act!)…

…the opinion continues, with no semblance of shame….

…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.

…context only underscores the outlandishness of the Court’s interpretation.

…For its next defense of the indefensible….

Could anyone maintain with a straight face that §36B is unclear?

…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” [Justice Antonin Scalia, dissent, King v. Burwell, 2015.06.25].

Justice Scalia throws this decision in the same pot as the 2012 ACA-saving NFIB v Sebelius decision and, in his concluding lament, accuses the majority of cahootsifying with President Obama and certain favorites in Congress to rewrite Obamacare to keep it alive:

…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 liti- gants 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 [Scalia, 2015.06.25].

Justice Scalia’s rage makes for blistering entertainment, but it didn’t persuade the six-justice majority, led by Chief Justice John Roberts, who today as in 2012 helps save President Barack Obama’s crowning achievement. Roberts (joined by Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan) looks at the reforms  Massachusetts adopted to avoid the “economic death spiral” that earlier insurance reforms in isolation caused, sees the same integral package of reforms enacted in the ACA, and decides that Congress could not have meant to guarantee affordable health insurance to all Americans without expecting that tax subsidies for insurance premiums and the individual insurance mandate would take effect in every state.

In other words, this Supreme Court decision in favor of Obamacare is brought to you by Mitt Romney.

Chief Justice Roberts dismisses the minority’s cry of plain language! words on the page! by pointing out that “Our duty, after all, is ‘to construe statutes, not isolated provisions.'” Yes, yes, Section 36B says individuals qualify for the premium tax credit if they enroll in “an Exchange established by the State under [42 U. S. C. §18031].” But the Chief Justice reads that provision in this context (the core of the semantic argument):

First, all parties agree that a Federal Exchange qualifies as “an Exchange” for purposes of Section 36B. See Brief for Petitioners 22; Brief for Respondents 22. Section 18031 provides that “[e]ach State shall . . . establish an American Health Benefit Exchange … for the State.” §18031(b)(1). Although phrased as a requirement, the Act gives the States “flexibility” by allowing them to “elect” whether they want to establish an Exchange. §18041(b). If the State chooses not to do so, Section 18041 provides that the Secretary “shall . . . establish and operate such Exchange within the State.” §18041(c)(1) (emphasis added).

By using the phrase “such Exchange,” Section 18041 instructs the Secretary to establish and operate the same Exchange that the State was directed to establish under Section 18031. See Black’s Law Dictionary 1661 (10th ed. 2014) (defining “such” as “That or those; having just been mentioned”). In other words, State Exchanges and Federal Exchanges are equivalent—they must meet the same requirements, perform the same functions, and serve the same purposes. Although State and Federal Exchanges are established by different sovereigns, Sections 18031 and 18041 do not suggest that they differ in any meaningful way. A Federal Exchange therefore counts as “an Exchange” under Section 36B [Chief Justice John Roberts, majority opinion, King v. Burwell, 2015.06.25].

Such—that one word roasts the beef brought by four selfish Virginians who didn’t want to buy health insurance over four words. Fascinating.

That semantic argument gives the majority the ground to follow the principle that the Supreme Court “cannot interpret federal statute to negate their own stated purpose” [Roberts, p. 15]. The majority recognizes that affirming the plaintiffs’ position would immediately deny residents of 34 states access to one key reform of the ACA, the premium tax subsidy, then practically negate in 34 states the meaningful application of a second key ACA reform, the individual insurance mandate, leaving the ACA unable to function the way Congress intended. To support that point, Roberts quotes Scalia:

The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. One study predicts that premiums would increase by 47 percent and enrollment would decrease by 70 percent. E. Saltzman & C. Eibner, The Effect of Eliminating the Affordable Care Act’s Tax Credits in Federally Facilitated Marketplaces (2015). Another study predicts that premiums would increase by 35 percent and enrollment would decrease by 69 percent. L. Blumberg, M. Buettgens, & J. Holahan, The Implications of a Supreme Court Finding for the Plaintiff in King vs. Burwell: 8.2 Million More Uninsured and 35% Higher Premiums (2015). And those effects would not be limited to individuals who purchase insurance on the Exchanges. Because the Act requires insurers to treat the entire individual market as a single risk pool, 42 U. S. C. §18032(c)(1), premiums outside the Exchange would rise along with those inside the Exchange. Brief for Bipartisan Economic Scholars as Amici Curiae 11–12.

It is implausible that Congress meant the Act to operate in this manner. See National Federation of Independent Business v. Sebelius, 567 U. S. ___, ___ (2012) (SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting) (slip op., at 60) (“Without the federal subsidies . . . the exchanges would not operate as Congress intended and may not operate at all.”). Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation. But those requirements only work when combined with the coverage requirement and the tax credits. So it stands to reason that Congress meant for those provisions to apply in every State as well [Roberts, 2015.06.25].

Contrary to Scalia’s assertion that the majority opinion rewrites the law and “aggrandizes judicial power,” Roberts says this ruling is very much about putting the will of Congress above the Court’s creative nitpickery:

In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined—“to say what the law is.” Marbury v. Madison, 1 Cranch 137, 177 (1803). That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done. A fair reading of legislation demands a fair understanding of the legislative plan.

Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt [emphasis mine; Roberts, 2015.06.25].

A good day for America,” says the President? Come on, Barack! If Justice Scalia can blurt Scottish, you can quote Craig Ferguson: “It’s a great day for America, everybody!” Millions of Americans keep their health insurance. The Affordable Care Act stays in effect, in law and in practice (and for well beyond 2017, Jason Ravnsborg). And just for kicks, we get a splendidly grouchy but ultimately ineffective rant from Antonin Scalia. A great day for America, indeed!


  1. MOSES 2015-06-25 16:04

    Thank the republicans for this all those republicans who voted for G.W.Bush put Obama in.

  2. Douglas Wiken 2015-06-25 16:12

    Don’t check Kevin Woster’s KELO page expecting any support for AFC. He has refused to post my short comment noting his snarky characterization of Obama’s comments. He has stuffed in Noem, Thune, and Mike Rounds BS nonsense however and the comments he has allowed miss or misunderstand the legal points you got into your post.

  3. Roger Cornelius 2015-06-25 16:26

    Congratulations Cory, this is an excellent summary of the Supreme Court Ruling and fits with many of the comments I’ve heard by legal experts. Oddly, Scalia actually helped make the Roberts Ruling by his demonstration of bad faith.

    As I read the press releases from Noem, Thune, and Rounds, it appears they are making the same arguments they made in the 2012 decision and hoping to do nothing more than to play to their base.

    The Courts ruling pretty much puts on ice any further debate or attempts to undo Obamacare at least until after the 2016 election. It is likely Boehner will make another appeal effort in the fall, but he doesn’t have the votes to override a veto. I’d be curious how many republican congressionals will change their opinion on Obamacare now that SCOTUS has spoken so loudly.

  4. Deb Geelsdottir 2015-06-25 16:53

    Maturity, thy name is not Scalia. He is good at temper tantrums. Scalia is simply a Republican, first, last, and always in everything he does. I have nothing but contempt for him and Thomas.

  5. happy camper 2015-06-25 17:06

    Sure would be nice if for one day people would drop the labels. So easy to vilify. And so destructive. Maybe there just needs to be a more fair way to get extreme judges out of step with America off the Supreme Court.

  6. Donald Pay 2015-06-25 17:20

    I’ve never understood why Republicans don’t embrace the ACA. It is built around a conservative idea. Republicans supported and pushed most of the ideas in the ACA for over a decade from the time Hillary Care was proposed right up to the very day that Obama incorporated the Republican plan it into his plan. Then they backed away. A very few elected Republicans had sense enough to realize that they actually won, but the vast majority were too dumb to realize they handed their victory over to Obama. Never underestimate how racism turns otherwise smart folks into morons.

  7. Bill Fleming 2015-06-25 17:34

    Interesting note here about how today’s decision what kind of a win-win for everybody.


    “Had the Supreme Court invalidated the subsidies in some 30 states operating on the federal insurance marketplace, that would have affected nearly 6.4 million Americans, who would have seen their health costs skyrocket by about 300 percent.

    Republicans were ready to blame Obama for the potential chaos. But some of them acknowledged the GOP would get the brunt of the blame, especially since they backed the lawsuit challenging the subsidies.

    “[Obama will] have the ads all racked up with the individuals that have benefited from Obamacare on the backs of the American taxpayer,” Sen. Ron Johnson, R-Wis., admitted in an April interview.

    Related: Will Republicans Accept Obamacare?

    Republicans also had been divided on how to respond. Some like Johnson wanted to extend the subsidies for Americans – in exchange for repealing the law’s individual mandate. But others were in favor of letting the subsidies die, full stop.

    And as past political battles have shown, the side that’s divided usually loses.

    “Phew, that fight could have killed us,” a prominent GOP member told NBC’s Luke Russert.”

  8. mike from iowa 2015-06-25 17:49

    Happy Camper-take away the litmus tests wingnuts have for judicial nominees at all levels. It was wingnuts who claimed only Libs had litmus tests and wingnuts only wanted strict constructionists on their side. Strict constructionist meaning anti=worker’s rights,anti-women,-anti-poor,anti-education,pro-business,pro-wealthy,pro-guns,anti-abortion.etc.

  9. caheidelberger Post author | 2015-06-25 18:07

    Doug, is Woster ever going to give you the time of day?

    KELO commenters like “Sad day” spouting off about how we live in a dictatorship remind me why I don’t read the KELO comments and hardly miss having my blog on their site.

    I will say this: Woster is at least posing some interesting questions to Sad day and our man Kurt Evans.

  10. caheidelberger Post author | 2015-06-25 18:10

    I won’t speak to Scalia’s maturity, Deb. I do find interesting the difference in tone between the majority and minority opinions. When I get beat on a point here in South Dakota, do I sound all hot like Scalia? Defiance in defeat can make us more strident… and in the case of this dissent, a more amusing read. Hmmm… if Democrats won in South Dakota, would I have to start writing all mild and dispassionately? ;-)

  11. caheidelberger Post author | 2015-06-25 18:17

    Donald—yes! It’s Romney’s idea! Massachusetts set the policy example that led the Supreme Court to its conclusion today. If they’d stop fighting ACA, they could get back to principle and fight for conservative improvements on other issues.

    Roger, I heard from a GOPer on NPR this p.m. that the debate doesn’t go on ice until after the 2016 election; it becomes the rallying cry for Republicans in the 2016 election. They appear determined to forget the lesson of 2012 and lose even bigger by making the election another referendum on ObamaCare. But the Republicans haven’t solidified around a plan that makes voters go, “Oooh, wow, yeah, let’s give up the o.k. deal we have now and try that!” Read the crap points that Noem, Thune, and Rounds send to Woster: it’s slogans, not hard policy, and not anything that’s would actually work better than the ACA.

    Of course, it would be a lot more fun to have Bernie Sanders debating the Republicans, stacking universal health care up against the GOP buckshot instead of Clinton’s teeth-gritted cheering for the plan that distinguishes Obama’s success from her and her husband’s failure in the 1990s.

  12. mike from iowa 2015-06-25 19:08

    I believe Scalia took Kagan on her first deer hunt. No word if he shot her in the face. Scalia also was an avid duck killing accomplice of Darth Cheney.

  13. owen 2015-06-25 20:14

    Love seeing right wing heads explode

  14. jerry 2015-06-25 20:22

    In the NOem camp along with the camps of EB-Rounds and Tehran John’s, they breathe a sigh of welcome relief that the Supremes kept the ACA in place. All of this action today also really kicks in the head the Wellmark Blue Cross nonsense about their not getting involved with the ACA subsidies as they would rather have the rough sex with their policy holders with a 43% hugathon. It also kicks in the head our politically dishonest governor and his denying Medicaid Expansion as an excuse because of the uncertainty of this decision. The crooks and the liars have no where to hide and neither does the media that shields them. Corporate media in South Dakota really proves that they are factually dishonest and useless. The only thing that works is the national weather service as that is public.

  15. Jana 2015-06-26 00:36

    Strange times indeed for the GOP.

    The Pope comes out with climate change as a moral issue. Has some harsh words for gun and ammo manufacturers and those that support them. Calls usury a dramatic social evil, inhuman and against human dignity.

    I’m sure that good Catholics in South Dakota have noted what the Pope is saying and how it conflicts with the SDGOP practice of promoting or ignoring these issues.

    Heck, smart Catholics like Troy are taking the teaching of the Holy Father to heart and intelligently examining his own faith and beliefs with relationship to his politics and he is to be saluted for his honesty.

    The Southern Strategy implodes as a racist young man with a bad haircut first slaughters 9 people and then leads to the removal of the symbol of racism, the Confederate flag from statehouses and Wal*Mart.

    Has a candidate for Prez call an entire race rapists and criminals.

    Now the Conservative Supreme Court solidifies Obamacare and the repeal and replace extremists are demanding impeachment of SCOTUS!

    The Argus Leader even reports that our GOP Congressional delegation is at odds with the very people we entrust our family’s healthcare to…our healthcare providers.

    And the GOP is thinking that the clown car of 20? Prez candidates saying stupid stuff is going to get the nation behind them?

  16. MJL 2015-06-26 00:37

    Many people call this a loss for the GOP. I think it will actually work the other way. They would not have been able to deal with the fallout of a court rejection and the loss of insurance for millions. They would have been the villains to a vast majority of the public. Now that it is the law of the land they can get the money flowing into the coffers and talk about how they will repeal it (but they won’t really) until the general election and then sidestep the issue.

  17. Jana 2015-06-26 00:45

    MJL, the repeal and replace crowd is being reduced to the guys sitting at the end of the bar bitching about Obama and how the designated hitter wrecked baseball ;^)

    Think about it. 50+ Congressional tries, millions of fundraising letters promising to repeal the law if only you’ll send money. (Look for the if I get 1,000,000 likes on my Facebook Obamacare will go away tactic coming to a computer screen soon.)

    And yet, the GOP promises for replacement over the last how many years? Have produced how many solid plans? The words of Noem, Thune and Rounds are just “Applesauce!”

    We all know the answer to that and it’s all just “Jiggery Pokery.” By the way, what is the root word for “Jiggery?”

    HT to Justice Scalia for the colorful language!

  18. Jana 2015-06-26 00:52

    Before I condemn Justice Scalia, the root and meaning of “Jiggery Pokery” is Scottish in origin. Time Magazine has a good peak behind the “Words that have no meaning anymore” (Thanks again Justice Scalia for the words have no meaning quote!)

    Bonus points if Cory can use snollygosters, quockerwodgers and flapdoodlers in a post!

  19. bret clanton 2015-06-26 08:24

    Donald Pay after reading this post I am bewildered as to why you have included race in this conversation? Am I to assume ALL republicans are racists and democrats are not?

  20. Roger Elgersma 2015-06-26 08:38

    My opinion on Scalia has changed over the years. My conservative friends say I should be a republican because I am prolife. I tell them that they had six out of nine justices for twenty years from 1990 to 2010 and did nothing to stop abortion. Scalia was the most diehard prolifer. Then a couple of years ago I saw him interviewed on TV and he said that abortion would never go away in a way that he seemed to accept that. Now he rabidly does not want the poor to have health care. I am not sure what happened to him.

  21. mike from iowa 2015-06-26 08:49

    Obama should have trademarked his name so when wingnuts use it to raise campaign cash,they’d have to pay Obama for the privilege of condemning him. BYW-Gay Perry (the ex-guv of Texas,not the one in France,Europe) is about the only rw candy-ass date for Potus that blames not the Scotus,but Obama hisownself for this whole mess.

  22. jerry 2015-06-26 09:33

    The right wing hate of the black president is the most ugly of all regarding racism. Now they want to hang Roberts right beside Obama as they see them both as part of some scheme that will make people of color actually equal, the sin of it all.

    Obama is one of the best things that has ever happened to this country, don’t believe me, just ask sick folks. Ask those of us who saw the end of our capitalistic system on the abyss of catastrophe in 2008. Ask your friends and relatives who are gay about now being able to have the dignity of same sex marriages. The list goes on. Thanks to Obama, many of these divisive issues are now being addressed with the outcomes favoring all. By the way, racism is not a one party system. Unfortunately, it is like cancer as equal opportunity.

  23. Deb Geelsdottir 2015-06-26 09:39

    A woman from SD made the Washington Post article, reprinted in the Minneapolis Strib. Ida Stievers said, “Thank God, hallelujah. That is so awesome.” Sievers is 46 and has leukemia.

    This may shock some, but apparently Sarah Palin was wrong about death panels. John Boner is still saying he’s going to kill the lifesaving Obamacare. Maybe Boner and his pals are the death panel Palin warned us about?

  24. leslie 2015-06-26 09:41

    cute saying again: all republicans may not be racists, but racists in america are usually republicans, or something to that effect. :)

    doug-good points about woster

  25. leslie 2015-06-26 09:45

    jerry, i have said that about obama many times since 2008. :}

  26. leslie 2015-06-26 09:56

    rapid city journal editorial staff have been shouting for years that ACA was passed by dems w/o any input by repubs [aaawwww], despite some 800 or so repub amendments. thus obama said yesterday “after a year of bipartisan debate, ACA was passed by congress”.

    will rcj editorial staff retract their misleading propaganda? will thune, noem and rounds?

  27. mike from iowa 2015-06-26 10:00

    Wingnuts had opportunities to work with Dems on the ACA and either chose not to or like iowa’s Grassley pretended to be cooperating while trying to defeat it.

  28. jerry 2015-06-26 10:06

    Now, here we are again in South Dakota where the leaders don’t give a damn about the economy nor do they give one about the working poor. It is all about them. They have their coverage so what is the big deal if others do not. Crosses should be placed in mailers showing the deaths they have allowed by doing nothing regarding the Medicaid Expansion then sent to their districts. Buckets of sweat should be placed in sight to show the work that is being done by those they scorn so they can pay their meager wages for the treatments many need. Our rural hospitals are going broke and need more taxpayer money to treat the indigent while Pierre watches tens of millions upon tens of millions go to states that have the intelligence to do the right thing. The republican regime that rules the state should be put on notice that what they have done is not only despicable, it also violates the basic human rights that their Jesus would not approve of.

  29. bearcreekbat 2015-06-26 10:44

    Today’s (6-26-15) RC Journal published the reactions of Noem, Thune and rounds to the ACA decision. Reading the direct falsehoods and tripe in these statements made me want to puke.

  30. leslie 2015-06-26 11:36

    so which is it scalia- is your court just a non-representive political body as you say, losing the marriage case; or the best of the best lawyers who apply law, not emotion, as the rest of the nation’s lawyers are trained?

  31. leslie 2015-06-26 12:00

    repubs retooling strategy to defeat ACA as central piece of 2016 election. ironic that hilary again will be center-stage in that debate. nobody more qualified.

    or, predictable, rather than ironic given repubs. moronic “vision” for the middle class.

  32. Jenny 2015-06-26 13:05

    Cory must be gone today. Well, I have to celebrate the SCOTUS ruling on gay marriage! Sorry anti-human rights people – love is the law of the land now! Thank you Pres Obama and SCOTUS, you got it right this time!

  33. jerry 2015-06-26 14:50

    I have read the response responses from the three amigos in our congress from South Dakota, funny stuff. They basically all want what is already in the ACA. One of the things that really show how far out of touch they are is that somehow expanding Health Savings Accounts is gonna save the day for them. Here is a flash for these knuckleheads, it already exists in plans that are being offered in South Dakota and all over this land. They want to protect the policy holder in the event of job loss, ACA to the rescue. Tehran John even wants wellness for the unhealthy, ACA to the rescue yet again. These three clowns really hope you do not read their drivel as they are absolutely clueless on what the ACA really means for the health and well being of Americans. Now if we could just get the Pierre crooks and liars on board for the Medicaid Expansion, we may see some progress in our state in both health and the economy.

  34. Porter Lansing 2015-06-26 18:23

    ~As a baby boomer and Vietnam era Vermillion liberal it’s more than gratifying to see this ruling. Insuring the right of USA citizens to affordable, means tested healthcare insurance is the foremost achievement of our generation (second would be ending the Vietnam war with civil unrest and widespread public protest). Congratulations to all of us who worked to write it, pass it, defend it and see it implemented; giving a solid foundation of affordable medicine to our fellow Americans.
    *time for a long and deserved diversion from politics for this issues oriented pundit

  35. Roger Cornelius 2015-06-26 20:47

    Rounds stated on the KELO Woster blog that he wants to repeal Obamacare and replace it “patient centered healthcare”, isn’t that like universal healthcare or expanded Medicare?

  36. owen 2015-06-26 21:12

    Roger to you and me it’s universal healthcare but to Rounds it’s a vague generality. No specifics, just nice sounding words his sheep can digest. Of course Thune and Noem do exactly the same thing.

  37. jerry 2015-06-27 09:33

    President Obama tells Tehran John, EB5 Rounds, and NOem that it is long past time to move on. He does so with the knowledge that they are losers and we all are winners. Doesn’t get much better than that. The knowledge that they are just insignificant to this, is even more enlightening to this feller. Over 50 attempts by NOem and her pals, did not even dent the Obamacare, she just wastes taxpayer money while collecting her own padding from the misguided base she calls fools. The bad news for taxpayers is that these three will continue to waste time and money falsely accusing Obamacare for being un-American when in fact, it is they who are. Here is this and its a beautiful thing.

  38. leslie 2015-06-27 10:17

    SIXTY SEVEN TIMES repubs have voted to undermine ACA. reuters 2.03.15

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