What the Affordable Care Act Subsidy Case Tells Us

While most of the media's attention yesterday was focused on Hobby Lobby, the D.C. Circuit was hearing argument in a case that poses a mortal threat to the Affordable Care Act.  As readers of this blog know, the subsidies to those participating in the federal exchange are being challenged on the ground that the statute authorizes subsidies only for exchanges run by states.  Since only fourteen states have set up their own exchanges, that would leave most of the country out in the cold and (I gather) throw insurance premiums out of whack.

I must say that, as I matter of statutory construction, I am not persuaded by the arguments made in favor of reading the Affordable Care Act to authorize subsidies to the federal exchange.  I think this interpretation is not much more than a statement that the consequences of reading the law as written would be terrible, thus it should not be done.  Granted, statutes should not be read in a literal way to produce absurd results.  In this case, though, I think Congress just assumed that most, if not all, states would not set up their own exchanges.  I don't see why courts are obligated to correct this design flaw.

This case (unlike Hobby Lobby) reflects the fact that the President has not carried the country on the merits of the Affordable Care Act.  You can see this in how the Act polls, in how the enrollments are going, and how Democratic candidates in contested seats are running from the statute.  If Democrats controlled Congress, they would have fixed the text of the statute in about five seconds.  The fact that they cannot do so is a symptom of a larger political problem.