On Wednesday, the Supreme Court will hear one of the most important, least understood cases of the 2014 term. King v. Burwell is a challenge to the Affordable Care Act that could, if the plaintiffs prevail, cut out the very heart of the ACA, leave up to 10 million low- and middle-income Americans without affordable health insurance, and throw the insurance industry in their states into turmoil.
This week on Amicus, Slate’s Supreme Court podcast, I interviewed two key players in this litigation. Jonathan Adler, who teaches law at Case Western Reserve Law School, was one of the principal thinkers behind this challenge. I also spoke with Abbe Gluck, who teaches law at Yale Law School and who has written extensively in defense of the ACA.
The case turns on just four words in this 900-plus–page statute, and the issue before the court has nothing to do with grand constitutional claims. But the case raises crucial questions about how judges read the words in laws. The central question in the case: Whether people in the 34 states that declined to set up their own exchanges, and who thus purchased health insurance on the federal exchange, are eligible for the tax subsidies that make health care affordable. There is some language in one section of the bill suggesting that those subsidies are only available to those who were eligible to purchase insurance from state exchanges, and if that is what the court finds, the millions of people who purchased health insurance on the federal exchange will be unable to afford health care.
What follows is a brief recap of our conversation:
Jonathan Adler explained that this case has not received the attention that the 2012 Obamacare challenge got because it is very technical, and it came in a flurry of other cases challenging the ACA. He said the nut of the case is that the law authorizes tax credits to assist some consumers “in an exchange established by the state.” The IRS, in his view, only has the authority to offer tax credits to those who bought insurance in exchanges established by the state, not those created by the federal government. The issue is simply how you read the plain meaning of a statute. I asked him whether the court isn’t meant to read the ACA in a “holistic” way with an eye to its context. Adler argues that both sides in this case are now “textualists”—focusing on the literal text as opposed to scrutinizing broad purposes. In his view, words mean what they mean, and the word “state” means one of the states or the District of Columbia.
I asked Adler why, if the government was seeking to give states incentives to create exchanges, they would bury the incentive in a tax provision. Adler said that various justices look at legislation and legislative history in very different ways. He explained that as litigants, it makes sense to rely on the statute Congress enacted.
I asked him about the practical impacts of a ruling for the plaintiffs: Millions of people would lose their insurance, and people would die. Does the Supreme Court need to think about that? Adler said that isn’t what the justices should focus on, but they are people too. He said he believes the impacts are being exaggerated. He added that both sides have an interest in painting the impacts of a decision as broader than they are. He said the case will not have the terrible outcomes threatened by Obamacare supporters, but also won’t eviscerate Obamacare in ways the plaintiffs’ supporters suggest. Adler added that if the court rules for the plaintiffs and the disruption is significant, Congress will take seriously its obligation to step in and fix the ACA.
I asked Adler if any of the many amicus briefs on the other side of the case had changed his mind. Adler replied that he has heard arguments that raise federalism ideas—the suggestion that to condition tax credits on state cooperation without first warning the states creates tremendous burdens on the states. He said that if plaintiffs have to lose, he hopes they lose on these federalism lines. These state/federal government arguments are serious, he said, and should be taken seriously by the courts.
I then asked Abbe Gluck, who specializes in federalism and health law, about the enormous real-world consequences should the plaintiffs prevail. She said they cannot be understated, and that the Supreme Court needs to understand the impact of what it is considering. She said chaos would ensue, and $25 billion in subsidies would no longer be given. That would cause 8 million Americans to lose their health care, and the insurance markets in 34 states to face near-certain collapse.
I asked her what she thinks about the response that Congress will fix the problem. She likened it to a game of chicken. She said this is the most gridlocked Congress imaginable. Moreover, in mostly red states where politicians got huge traction from opposing Obamacare, they can’t just flip and support it. That would leave the Department of Health and Human Services to fix the problem; and every time HHS acts, it gets sued.
I asked Gluck what “exchanges established by the state” means, if you are looking at plain meaning in a statute. Gluck replied that the words only mean exchanges established by the states in isolation, and that you have to read them against the plain meaning of the entire statute. She said the statute is based on principles of federalism: The states have an opportunity to establish exchanges, and if they don’t the federal government steps in. She said that this is a common statutory scheme, and looks just like the Clean Air Act. She pointed to language elsewhere in the statute that directs the federal government to create an exchange for the state.
I asked her for the principles of statutory construction that the justices will deploy. She said that rule number one is that context matters, and text cannot be interpreted in a vacuum. She added that you can’t read a section that makes the rest of the statute senseless. She also said that it makes no sense to assume Congress sowed the seeds of the statute’s destruction right into it. Mostly, she said that the courts have interpretive rules preventing states from being penalized by statutes that bait and switch by offering them things which are then taken away without warning.
I asked Gluck about the ways in which the case implicates states’ rights. She argued that 34 state insurance markets will collapse in chaos if the plaintiffs prevail, and that Virginia and 20 other states claim that they never knew this would happen, and thus never had an opportunity to make their best choice.
I asked her whether this case is a serious one, or a “specious” “nonsensical” case, as some federal appellate judges have characterized it. She replied that the case was born in a think tank, and is based on a narrative that Congress wanted to scare the states into operating exchanges. She said that the case got its legs by significant blogging in support of this narrative.
I asked Gluck if anything on the other side changed her thinking on this case. She replied that she has spent a lot of time with Jonathan Adler in these past years, so much so that her 8-year-old noticed a Jonathan Adler store (no relation) on the way to New York and got very excited. She added that she supports textualism, but that this case is not about real textualism. In this case the textualist principles support the government.