Friday, May 29, 2015

The New York Times Demolishes The King v. Burwell Plaintiffs’ Case

Guest Blogger

Simon Lazarus

In Tuesday’s New York Times, Robert Pear reported that, according to interviews with “over two dozen” Republican and Democratic senators and staff from the 111th Congress that enacted the Affordable Car Act, everyone involved in that process, on both sides of the aisle, understood the legislation to prescribe tax credits and subsidies to needy purchasers of insurance on all state-level exchange market-places, whether such exchanges are operated by the state or federal governments.  Pear’s piece has provoked an ongoing avalanche of fervid reactions from both friends and foes of the King v. Burwell lawsuit, now pending before the Supreme Court.  The lawsuit argues that ACA must be interpreted to provide tax credits and subsidies only to health insurance purchasers in (the 13) exchanges set up and run by state governments on their own behalf.  That interpretation would price health insurance out of reach of nearly 90% of the 13.5 million individuals buying insurance on exchanges in the 34 states which have elected to have the federal Department of Health & Human Services operate them, rendering those exchanges effectively inoperable.  Each side’s advocates insist that Pear’s findings offer new support for their view of the case, or attempt to minimize apparent damage.

Certainly, the main thrust of Pear’s story favors the Obama Administration, which interprets the law to prescribe tax credits nationwide, on exchanges in all states.  Uniformly, his sources, all named and for the most part directly quoted on the record, reinforce the overwhelming evidence adduced by the Department of Justice and supporting amicus curiae (friend of the court) briefs, that ACA opponents are flat-out dead wrong in claiming that Congress “consciously and purposefully” intended tax credits to be available only on state-run exchanges. Pear recounts, for example, that a staffer for Republican Senator Michael Enzi of Wyoming, a senior member of both Senate committees responsible for the ACA, does not accept the King v. Burwell ACA challengers’ argument, because it is “so contrary to the intent” of the ACA’s drafters. .  “Why,” he quotes former Maine Republican Senator and senior Finance Committee member Olympia Snowe, “would we have wanted to deny people subsidies?  It was not their fault if their state did not set up an exchange.”

These unequivocal statements about the law’s meaning and purpose demolish the challengers’ case.  This is because, at all points, they have considered it critical, in order to give coherence to their poison pill textual interpretation, to show that the ACA’s sponsors deliberately made the credits contingent on states opting to establish their own exchanges -- “as an inducement to states to set up exchanges.”  When categorically rejected by Republicans who voted against the ACA, the challengers’ “conscious and purposeful” line becomes an utterly untenable howler.

On The Volokh Conspiracy, Jonathan Adler, co-originator of the legal theory behind the lawsuit, attempts to discredit these Republican insiders by rehashing a claim he has previously made in briefs and articles.  He points to one provision in the Senate HELP Committee’s bill, which was ultimately combined with a Finance Committee bill to form what is now the ACA.  Adler asserts that the HELP bill “[held] off subsidies for up to four years in states that refused to create their own exchanges, [and] barred subsidies in states that failed to enact other desired reforms.”  This point, he goes on to contend (asserting en route that the point was “conceded” in briefs filed by the Justice Department and by the Constitutional Accountability Center), shows that “anyone who claims that the Senate never considered withholding subsidies in recalcitrant states is either a) dishonest, or b) doesn’t know what they’re talking about.”  In fact, however, as CAC’s and DOJ’s briefs actually stated, the HELP Committee bill is irrelevant to interpreting the ACA provision on which he and his allies rely, because that provision was taken, intact, from the Finance Committee bill.  Moreover, contrary to his account, the HELP provision he cites in no way withheld subsidies to states “recalcitrant” about setting up exchanges.  On the contrary, it provided only that, during the four year transitional period after enactment, before the ACA’s key provisions (exchanges, individual mandate, insurance consumer protection reforms, and subsidies) took effect, pro-reform states could get ahead of the curve, by passing laws embodying those requirements, and that if they did so, their eligible residents would receive the federal subsidies necessary to make insurance affordable.  After 2014, when those requirements would become mandatory as a matter of federal law, the subsidies were to become available nationwide, whether states set up their own exchanges or elected to let the federal government handle that task. Contrary to Professor Adler, the HELP Committee bill does not show up Robert Pear’s bipartisan sources as either “dishonest” or clueless.

Further, the article decimates a second facet of the narrative spun by the King challengers.  They have been at pains to explain away the multiple statements in the voluminous legislative record that show a uniform expectation that tax credits to make health insurance affordable would be available nationwide.  Their tack has been to suggest that, while the law was being drafted, Congress assumed that all states would opt to set up and run their own exchange.  Hence, ACA opponents have argued, predicting the availability of tax credits in all states was consistent with legislating that  the credits should be available exclusively on state-run exchanges.  But Pear quotes a Finance Committee Republican staffer saying precisely the opposite – that senators and staff lawyers believed that some states would choose not to set up exchanges. They forecast “five or at most ten” rejectionist states, instead of the 34 current total.   Nevertheless, this statement expressly confirms that, when members and committee reports stated that eligible individuals in all states would receive tax credits, they did so knowing full well that some of those individuals would reside in a good number of states with federal exchanges.

In one important respect, Pear’s account could give a misimpression to readers unfamiliar with the case.  It implies that an asserted failure by Congress to delete or clarify a four-word phrase in one section of the law, on which the King challengers rely, reflects a “drafting error” that could, potentially, make the text of the law mean the opposite of what Congress actually intended.  But in fact the case is not about a “glitch,” and correctly deciding it does not require the Court to choose the intent of the law over its text.  In fact, the text of the law, when read in its entirety, plainly makes tax credits available on all exchanges, whether state-run or federally facilitated.  To be sure, as I have written elsewhere, with 20-20 hindsight, the drafters of the ACA could have stated, in so many words, either that tax credits were to be available on “all exchanges, federal and state,” as ACA supporters understand the law, or “only on state exchanges,” as opponents would have it. But such language issues are common in litigation about how to apply laws to particular circumstances.

In sum, Pear’s interviews dispatch ACA opponents’ effort to square the legislative record of Congress’ intent and purpose with the a-contextual interpretation they conjure to make the ACA mean the opposite of what everyone involved in its enactment understood and intended.

Simon Lazarus is Senior Counsel to the Constitutional Accountability Center.  You can reach him by e-mail at simon at

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