Supreme Court Plays Humpty Dumpty Word Games in Affordable Care Act Decision
COMMENTARY: In the 6-3 ruling on King v. Burwell, the justices blur the lines between state and federal health-care exchanges, broadening mandatory health insurance and tax credits.
Humpty Dumpty famously told Alice that for him a word “means just what I choose it to mean — neither more nor less.” He would have been at home with the Supreme Court’s recent 6-3 decision upholding the Affordable Care Act (ACA), King v. Burwell.
Although the Obergefell same-sex “marriage” decision is receiving the attention (and criticism) it deserves, that decision should not overshadow King. In that case, the court decided that the word “state” also means “state or not a state.”
The wording of the law that the court was asked to review seems apparently straightforward. The Affordable Care Act provides that states may choose to establish health-insurance exchanges. If they do not, the federal government shall establish such an exchange in the state. The ACA also provides for tax credits to be given to persons who have income within a certain percentage of the poverty line.
The amount of tax credits “depends in part on whether the taxpayer has enrolled in an insurance plan through “an exchange established by a state under” the ACA. The issue before the court in King was whether “established by the state” means an exchange also established by the federal government.
In general, if that phrase does include the federal government, then people must buy health insurance and, if applicable, receive tax credits. If not, then tax credits would be unavailable and the purchase of health insurance would not be required. The plaintiffs in the case did not want to buy health insurance. They lived in Virginia, a state without a state-established health-insurance exchange. Instead, Virginia had an exchange established by the federal government. Therefore, the plaintiffs argued, the exchange was not “established by a state”; because of that, tax credits were not available, and so they were not therefore required to purchase insurance.
The Supreme Court, in an opinion written by Chief Justice John Roberts, read “established by a state” to also mean “established by the federal government.” The court reached this decision even though the ACA itself defines “state” as including only the 50 states and the District of Columbia — and not the federal government. But the court brushes this obvious statement of congressional intent aside.
Instead, the majority looks to the wider purpose of the ACA to find, essentially, that Congress could not have meant what it said, given what the ACA was apparently meant to accomplish: that is, nationwide, mandatory health insurance. Because of that, the court ruled in favor of the government. This decision will have the practical effect of requiring states without state-established exchanges (such as Virginia) to mandate the purchase of health insurance anyway.
As the dissent by Justice Antonin Scalia asserts, the court first created an ambiguity in the statutory language that was not there, and once it had done that, it felt free to “save” the ACA by warning that accepting the plaintiffs’ argument “would destabilize the individual insurance market in any state with a federal exchange.” Therefore, the court determined it had to “depart from the most natural reading of the pertinent statutory phrase.”
Justice Scalia writes in his dissent that “[w]ords no longer have meaning if an exchange that is not established by a state is “established by the state.” The ACA has a number of provisions that separate and describe the responsibilities and functions of a state exchange and a federal exchange. This supports the notion that when Congress said “established by a state,” and defined the word “State” in such a way as to exclude the federal government, that is what Congress meant to say. As the court majority states, the ACA has numerous examples of “inartful” drafting, and its more than 900 pages of text contain unclear passages. However, the court took on in Burwell what the dissent argues is more of a legislative role — the court is supposed to interpret the words Congress wrote, not to guess at the overall purposes of the statute and read that into the language.
Both the majority and the dissent agree that one of the tools judges use in interpreting statutes is the larger context of the statute being reviewed. If words are truly ambiguous or unclear, then there is a judicial role in trying to make them make sense. But, as Justice Scalia points out, “I wholeheartedly agree with the court that sound interpretation requires paying attention to the whole law, not homing in on isolated words or even isolated sections. Context always matters. Let us not forget, however, why context matters: It is a tool for understanding the terms of the law, not an excuse for rewriting them” (original emphasis). Here, Justice Scalia accused the majority of deliberately confusing the issue so as to reach the desired result, which is to force the requirements of the ACA on those states that had determined not to establish an exchange. It also contradicts the plainest reading of the words of the statute, which suggest Congress allowed for the possibility of a federal exchange without tax credits.
Humpty Dumpty continued in his dialogue with Alice, after she protested that words could not mean whatever one wanted them to mean, that “the question is … which is to be master — that’s all.” Unfortunately, that lesson is on display in the Supreme Court’s decision.