A
monument on the Civil War battlefield at Gettysburg identifies the “high water
mark of the Confederacy,” where General Pickett’s charge temporarily breached
the front lines of the Union Army. A
significant issue in that War was the refusal of Southern states to accept the
result of the Presidential election. The
Union’s ultimate victory vindicated the principle of majority rule within our
constitutional system.
More
than 150 years later, this democratic principle is still under siege—not by
force of arms, but by the persistent efforts of the losers in legislative
battles who seek to overturn the majority vote in the courts. Nowhere are those efforts more relentless and
dogmatic than in the profusion of lawsuits challenging the Affordable Care Act.
The
challenges, however, hit their own high water mark when the Supreme Court
granted review in King v. Burwell. Since then, the challengers’ claims, which
were insubstantial to start with, have evaporated, laying bare both the absence
of any coherent legal basis for the claims and the political nature of the
litigation.
The
challenges focus on the State insurance Exchanges required under the ACA. An Exchange is essentially a Travelocity for
insurance, where individuals can compare prices, find the best deal, and
purchase their insurance. Section 1311
of the ACA requires all States to establish an Exchange. If a State does not establish the “required
Exchange,” however, Section 1321 of the Act instructs the Secretary of HHS to
establish “such Exchange” for the State.
The
ACA expressly articulates the purpose of these Exchanges and of the insurance
reforms the Act adopts—“Affordable Care for All
Americans.” To that end, the ACA
mandates that individuals obtain health insurance, and it grants low-income families
tax subsidies so they can afford to do so.
The subsidies provision, Section 36B of the Tax Code, first directs that
a tax credit “shall be allowed” for non-elderly Americans with incomes between
100 and 400 percent of the federal poverty level. But then another sub-subsection calculates
the amount of the subsidy based on the cost of insurance purchased on “an
Exchange established by the State under Section 1311,” followed by a
sub-subsection that uses the same phrase in calculating the months of coverage. Isolating that last phrase—“Exchange
established by the State”— the challengers assert that low income families in
states with Exchanges established by the Secretary of HHS cannot receive
subsidies, or more precisely, that the amount of their subsidies is zero,
because the Secretary is not “a State.”
The
simplicity of the argument, though alluring, is deceptive. As the Government notes in its response, the
disputed provision—when read in harmony rather than in conflict with the entire
900-page statute—merely makes the Secretary the surrogate of the State in
establishing an Exchange. An Exchange
established by the Secretary in lieu of the State is “such Exchange”—the legal equivalent for purposes of the statute
of an Exchange established by the State.
Adopting the challengers’ contrary interpretation not only would disable
numerous provisions of the ACA, but also would defeat the central purposes of
the Act.
The
Fourth Circuit agreed that the subsidies were available in all States, and
ruled for the Government. A divided
panel of the D.C. Circuit held for the challengers, but the entire Court then
vacated the ruling and granted rehearing en
banc. Thus, come late December,
there was no conflict between the Circuits—generally a prerequisite for Supreme
Court review. The Court granted review
anyway. That was an ominous sign for the
Government and the high water mark for the challengers.
Since
then, however, the tide has rapidly receded.
As scholars, journalists, and legal advocates have dug into the case,
each day seems to bring a new development undermining the challengers’
claims. For example, the challengers
argue that Congress threatened the loss of subsidies in order to coerce States
into setting up Exchanges. But in an
amicus brief supporting the Government, 22 States and the District of
Columbia—including 10 States with a Federal Exchange—pointed out that accepted
principles of federalism prevent Congress from imposing such a condition
without clearly putting the States on notice.
Not one of the 22 States (and DC) perceived the supposed threat, proving
at the very least that the statute failed clearly to convey one. Beyond that, the mere fact of support for the
Government from nearly half the States, compared to seven supporting the challengers,
and the rest, including the largest States with Federal Exchanges––Texas,
Florida and Michigan—sitting on the sidelines, deflates the challengers’
self-anointed status as champions of federalism.
Another
example of the erosion of the challengers’ case involves their claim that
coercing the States into establishing Exchanges was necessary in order to
satisfy Senator Ben Nelson, the crucial 60th vote needed to overcome a
filibuster of the ACA. Senator Nelson,
the challengers told the D.C. Circuit, insisted that, “We are not going to have
a federally run exchange. We are going
to implement basic principles of federalism and the states are going to run
those exchanges or I don't vote for it and it doesn't get passed.” There is, however, no record of Senator
Nelson ever saying that. And now he has
confirmed just the opposite. In a
January 27, 2015 letter to Senator Casey, Nelson wrote that he never intended
to penalize States for defaulting to a Federal Exchange. Further, he stated: “I
always believed that tax credits should be available in all 50 states
regardless of who built the exchange, and the final law also reflects that
belief as well.” The anti-ACA
advocates’ first tack in response was to deny that they had ever made the
supposed deal with Senator Nelson central to their claim, an assertion
reminiscent of Yogi Berra’s quip, “I never said all the things I said.” The ACA opponents also cited an earlier
statement by Senator Nelson that he had not focused during the Congressional
debate on the availability of subsidies in States with Federal Exchanges. Of course he didn’t. It wasn’t an issue. The participants, including Senator Nelson,
believed that subsidies would be available in all States, which explains why
they so frequently used the word “all” in describing the benefits of the ACA,
and why the challengers have found no contemporaneous statement to the
contrary.
Moreover, yet another piece of corroborating evidence surfaced
recently, an email dated January 12, 2010, from a Senate staffer who worked on
the legislation adopted by the Senate two-and-a-half weeks earlier. Columnist Jonathan Cohn asked him:
“under
senate bill, can states opt out of (a) medicaid expansion (b) exchanges? And if
so was that done to make nelson happy?”
The
staff member responded,
“No
on Medicaid.
Yes on Exchange -- but then the feds
come in and do it instead.
Neither for Nelson.”
So much
for the Nelson theory.
In
other respects as well, the ACA opponents are having trouble keeping their
legal theories straight. Since the grant
of review in King, a January 2010
article by Senator Hatch resurfaced criticizing the ACA provisions on
Exchanges. Senator Hatch maintained that
a State’s decision to set up an Exchange “is not a condition for receiving federal funds,
which would still leave some kind of choice to the states.” The Exchange provision, he continued, makes
States mere “subdivisions of the federal government” because it “requires
states to establish these exchanges or says that the Secretary of Health and
Human Services will step in and do it for them.” That is not the challengers’ coercion theory. In fact, it is a direct rebuttal.
Likewise, a 2011 video came to light in which Republican Senator
John Barrasso, while touting legislation allowing States to opt out of the ACA,
was asked whether residents of opt-out States could receive subsidies. Senator Barrasso responded that as long as
those residents paid taxes, “they’re
not going to give up that right to
have an opportunity to use that money.”
To “give up” a right, one generally must have it in the first place, and
the challengers now claim that these residents did not have such a right.
Whether
or not this new information is the traditional stuff of statutory
interpretation, it confirms why the dogs did not bark in 2009 and 2010; that
is, why the challengers have found no pre
hoc articulation of their post hoc
interpretation of the Act. There was a
common understanding that subsidies were available in all States. And that is not surprising: in the last
Supreme Court case involving the ACA, the dissenting Justices recognized that
the subsidies were essential to enable an Exchange to function: “[w]ithout the
federal subsidies, individuals would lose the main incentive to purchase
insurance inside the exchanges,” and insurers would likely “be unwilling to
offer insurance inside of exchanges” if they were no longer the exclusive means
of reaching subsidized customers. “With
fewer buyers and even fewer sellers, the exchanges would not operate as
Congress intended and may not operate at all.”
Exchanges without subsidies would be doomed to fail—and there is no
reason that Congress would have created a federal fallback with such a fatal
flaw.
Given
this common understanding, given the Government’s reasonable—indeed,
compelling—textual interpretation reflecting that understanding, and given the
violence the challengers’ reading would inflict on the statute, it would be
acutely anti-democratic to use this artifice to accomplish what the challengers
have been unable to achieve in Congress or even in the constitutional
litigation. It would substitute the
views of unelected judges for the majority vote of democratically elected
legislators. It would, in the ACA
opponents’ own words, “drive a stake through the heart of Obamacare.” And it would do so in a case brought by
parties with no injury or interest besides ideological animus, who would impose
serious injuries on millions of low-income families not before the Court.
In
sum, the developments since the high water mark when the Court granted review
in King do not merely undermine the
Petitioners’ claims. They also highlight
the significance of the case to the democratic principles at the core of our
constitutional system, and, accordingly, to the legitimacy the public accords
the Court’s decisions.
Rob Weiner, formerly Associate Deputy Attorney General in the United
States Department of Justice, is a partner at Arnold & Porter LLP.
You can reach him by e-mail at robert.weiner at aporter.com