Preserving Obamacare with a prescription of common sense

It was a busy week for the Supreme Court, and a very good one for liberals.

But let’s not focus on human rights, including the profound and welcome decision to recognize a right to same-sex marriage. Instead let’s discuss statutory interpretation!

In the Affordable Care Act (Obamacare) case, Kingv. Burwell, the Court had to decide whether a provision of the statute, which allowed tax credits – essential for the overall plan’s viability – to be paid to a taxpayer who had purchased insurance through “an Exchange established by the State,” actually authorized tax credits not only for taxpayers in the states that did establish these Exchanges but also for taxpayers in the many states – a large majority – that did not. In those states, as the statute provided, the federal government had filled the void left by state inaction and established an Exchange itself.

So the precise statutory question was “does ‘Exchange established by the State’ mean “Exchange established either by the State or the federal government’”? It might seem obvious that the answer is "no" – the federal government is not a state. For Justice Scalia, the answer was obvious, and it was indeed "no." Scalia says that the Court's answer -- "yes" -- "is of course quite absurd, and the Court's 21 pages of explanation make it no less so." (Dissenting opinion at 1.) That's pretty sharp -- though not the sharpest language Scalia has ever used. 

Despite Scalia, six justices said "yes," in an opinion by Chief Justice Roberts. In fact the question wasn’t quite as obvious, even as a technical matter, as Justice Scalia believed. For example, as Roberts says, the statute “defines the term ‘Exchange’ to mean ‘an American Health Benefit Exchange established under section 18031.” Section 18031 is the section telling states to set up these exchanges, but the states weren’t obliged to do so, and another section, 18041, tells the Secretary of Health and Human Services to “establish and operate such Exchange” if the state doesn’t. Then, since “Exchange” is defined as an Exchange established under section 18031, and section 18041 tells the Secretary to establish “such Exchange,” actually the Secretary is being told to establish “an exchange … under section 18031,” which, again, is the section authorizing states to set up exchanges. So it’s possible to parse the language to say that the federal government has been instructed to set up state exchanges. (Majority opinion at 11-12.)

It turns out there are a number of anomalous sections like this. Perhaps the most striking is the one that says that all exchanges are to report to the IRS the information necessary for the calculation of each person’s tax credit – a provision hard to understand if in fact people who purchased insurance on federal exchanges couldn’t get any tax credits at all. (Majority opinion at 13-14.)

But the real point, I believe, is not these technicalities, though they help Chief Justice Roberts to establish that the statute has enough ambiguity to be open for interpretation. The real heart of the Court’s decision is evident in this penultimate paragraph:

            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. [The relevant section] can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt. (Majority opinion at 21.)

Roberts appears to believe that where the constitution does not set the courts at odds with the other branches of government, then the courts and those other branches are partners in governance. This is an old idea, dating back to the “legal process” school of the mid-twentieth century. It is by no means a charter for unchecked, freewheeling judicial rewriting of the statutes enacted by Congress; there will surely be many, many cases where the clarity of a statute’s words overwhelms arguments for reinterpretation that are less cogent than those in the Obamacare case.  

But this case does indeed create a precedent for the proposition that language by itself, however seemingly clear, should not be understood in a way that “destroys” what Congress meant to do. To this extent Scalia is clearly right: this case “will be cited by litigants endlessly,” though I don’t share his belief that the result will be “the confusion of honest jurisprudence.” (Dissenting opinion at 21.)

In fact the case is already not unique – this is at least the third decision Roberts has written or joined in the past two years in which the Supreme Court has departed from what arguably was the clear import of statutory words if read by themselves. The earliest  was Bond v. United States, decided in June 2014; there the Court decided, in an opinion written by Roberts, that a woman’s effort to cause a romantic rival to “develop an uncomfortable rash” by putting “two toxic chemicals” on the rival’s doorknob did not amount to the use of a “chemical weapon.”  The next was Yates v. United States, decided in February 2015, in which the Court held (though without a majority opinion) that a statute aimed at financial fraud, one of whose provisions punished the destruction of a “tangible object” with the goal of interfering with a federal investigation, did not cover the destruction of illegally-caught oversize fish.  The Supreme Court appears to be experiencing an epidemic of common sense!

These common-sense decisions reject an alternative approach that almost taunts Congress for its imprecisions. Instead, they tell us that we can, at least broadly, understand what Congress seeks – despite the skepticism with which some have come to greet this proposition. Just as clearly, they say that when we understand it we should support it (of course within the bounds of the constitution) even if the words Congress used don’t readily lend themselves to such a supportive reading. 

Thank goodness.