Here's who stands to lose health insurance due to King v. Burwell. Not that conservatives care.
For better or for worse, I've spent the past few weeks writing about the impending
King v. Burwell U.S. Supreme Court case that threatens to outlaw subsidies on the federal exchange created by the Affordable Care Act that make insurance affordable for millions of people. I've documented how the suit's intellectual authors
are fibbing about the legislative history of Obamacare. I've written about how the Supreme Court will be
undermining its own integrity in the name of politics by deciding for the plaintiffs. I've
discussed the supposed "replacement plan" contemplated by Republicans in Congress, which will do very little to improve the fortunes of those impacted by a potential adverse decision in the long term. And I've
blogged about how Republicans have absolutely no short-term stopgap measure to provide insurance for those who would be immediately impacted by having their subsidies stripped.
What I haven't covered? Whether the key proponents of the case like Cato Institute's Michael Cannon even believe the bull manure they're trying to sell the court. More on that below the fold.
The foundation of the plaintiffs' argument in the case runs like this: one particular passage in the Affordable Care Act refers to subsidies being available on "exchanges established by the state." Since, in their view, the federal exchange isn't established by a state, subsidies should not be available on it; and furthermore, Congress intended to use the lack of availability of subsidies on the federal exchange to compel states to create their own exchanges. By contrast, the Obama administration argues states were given the flexibility to choose whether to establish their own exchanges or to let the Health and Human Services Department run a state marketplace for them, and thus all exchanges count as "established by the state." Furthermore, Congress intended for the advantages of the Affordable Care Act to be available to everyone, and only allowing state-based exchanges to receive subsidies would run counter to that goal. And ultimately, the Chevron deference framework under which such cases are usually decided dictates that as long as the administration's interpretation of a statute is plausible, the courts should not interfere.
Another important question? Whether the interpretation of the plaintiffs is even constitutional. And that's not a theoretical question for down the road—it directly impacts how the justices should rule in the case this summer. And perhaps equally important is whether the intellectual leaders of the plaintiffs' side actually believe their own argument. (Hint: they don't.)
Over a century of American Supreme Court jurisprudence requires that the court construct statutes in a constitutional way, provided that such a construction is plausible:
If we felt more hesitation than we do, we still should feel bound to construe the statute not merely so as to sustain its constitutionality, but so as to avoid a succession of constitutional doubts, so far as candor permits. Knights Templar & Indemnity Co. v. Jarman,187 U. S. 197, 187 U. S. 205.
Are there constitutional doubts regarding the plaintiffs' construction that the federal government was looking to compel the states to create their own exchanges? Definitely. The brief filed by 22 states and the District of Columbia in support of the Affordable Care Act
makes this case:
Petitioners’ interpretation should also be rejected because it would raise serious questions under the Tenth Amendment. Petitioners attribute to Congress a novel kind of coercion that threatens State citizens and State insurance markets as a means of pressuring State governments to take action. Not only is such a scheme antithetical to the Act’s cooperative federalism model, but the constitutional-doubt canon counsels against attributing such a coercive intention to Congress.
And this brief in support of the respondents isn't the
only one to make this case:
Given the mandates' accepted role as correctives to the ACA's otherwise-destructive regulations and given that Petitioners' interpretation would cause non-enforcement of those correctives in non-compliant states, the threat in Petitioners' interpretation is: "Establish an exchange, or the federal government will destroy your individual insurance market." That regulatory threat plausibly violates both the principle of equal sovereignty and the anti-coercion constraint - two constitutional challenges that the Court will confront in future litigation if it rules in Petitioners' favor.
The question presented is whether this Court should apply the canon of constitutional avoidance to uphold the IRS rule, even if the Court finds that Petitioners' understanding comports better with the plain language of 36B.
Other briefs filed in support of the government
echo this argument without making it so explicitly. In plain language: even if the Supreme Court thinks that the plaintiffs' interpretation of the law fits better with the wording of the law, the would have to rule for the government if the other view would threaten the law's constitutionality. The only way the justices could rule for a potentially unconstitutional reading while still adhering to over a century of jurisprudence would be to find that the government's interpretation of the law is totally implausible—and that's a difficult case to make, given the favorable opinions of two circuit courts and the long history of congressional intent behind the law.
The biggest backers of the plaintiffs understand this point: they need to try to convince the court that their interpretation doesn't posit a constitutional challenge to the law itself. Michael Cannon made this case last week in the context of a broader argument about congressional intent:
What the plaintiffs, Adler, and I actually argue is that Nelson matters because, and only because, (1) he insisted on state-run Exchanges rather than a single, nationwide Exchange, and (2) his vote was crucial to get a bill through the Senate, and, since Congress cannot force states to implement federal programs, (3) the PPACA’s drafters therefore needed some way to states to establish Exchanges – a part of the Act that has turned out to be very costly, difficult, and fraught with political peril. So what the PPACA’s drafters do? They adopted a wacky, hair-brained, far-out idea that has been proposed only on numerous occasions by multiple Congresses as well as Presidents Johnson, Nixon, Clinton (more than twice), and Bush. They created an incentive for states to implement federal priorities by conditioning federal benefits on state cooperation.
And similarly, here's Case Western Reserve University law professor Jonathan Adler, a collaborator of Cannon's on the various lawsuits along the lines of
King v. Burwell, at a
panel last summer discussing the suits:
AS SOMEONE WHO LOOKED AT THAT FOR YEARS, SEEING A STATUTE STRUCTURED LIKE THIS IS NOT PARTICULARLY SURPRISING. WE SEE THIS IN ENVIRONMENTAL LAW ALL THE TIME. WE SEE THIS IN A CASE IN WHICH THE SUPREME COURT LOOKED AT THE SORT OF THING AND ONE OF THE THINGS THE FEDERAL GOVERNMENT WAS DOING WAS PROVIDING DIFFERENTIAL TAX TREATMENT TO PRIVATE PARTIES BASED ON WHETHER OR NOT STATES IN WHICH THOSE PRIVATE ENTITIES OPERATED IN WERE COMPLYING WITH WHAT THE FEDERAL GOVERNMENT WANTED. EVERYONE WAS USING TAXES ON PRIVATE PARTIES AS A WAY OF TRYING TO GET STATES TO THING THE GOVERNMENT TO AND. -- SING THE GOVERNMENT TUNE. FROM THAT PERSPECTIVE, THERE WAS NOTHING UNUSUAL HERE...
The problem? They're hypocrites who don't even believe what they're trying to sell both the court and the public. A recent
must-read by Brian Beutler at
The New Republic makes this clear: before the IRS issued the rule currently in dispute clarifying that subsidies would be available on the federal exchange, conservative scholars dedicated to the destruction of the Affordable Care Act felt that the ambiguous language about "exchanges established by the states" could afford them an opportunity to kill the law. On what basis? The same compulsion issue that they're now trying to argue against. One of the scholars making the argument that such compulsion was unconstitutional? Jonathan Adler.
For a time, Jonathan Adler—one of the conservative lawyers most closely associated with the subsidy challenge—bought into this line. He wrote that “under most conditional spending statutes, states may risk losing direct financial support if they fail to follow federal dictates. Here, however, it is state citizens who lose a financial benefit if their state does not act. This structure could create potential coercion concerns insofar as the Dole test focuses on whether the relevant conditions ‘interfere[] with the state’s sovereign accountability.’”
Only when the IRS announced it would issue subsidies universally did Adler and his partner-in-crime Michael Cannon—a Cato Institute libertarian—change course. Where conservatives once argued the subsidy condition might be unconstitutionally coercive, they set about to force the government to make good on that very coercion. For a time, Cannon treated their reading of the law as the result of a “glitch.” Eventually the difficulty of undoing the ACA by exploiting a "glitch" dawned on them.
Adler has done a total about-face. Before the IRS wrote its regulations, he argued that the language in the statute could create coercion concerns. But now he is arguing that the federal government meant to coerce the states, and that such coercion is perfectly constitutional and happens all the time. The intellectual founders of the suit are trying to create the conditions that they originally argued reeked of unconstitutional coercion. And in that, they agree with the defenders of the law.
Why does this matter? As mentioned: unless the Supreme Court wants to throw out over a hundred years of precedent, they are obliged to side against an interpretation of dubious constitutionality. If both sides agree that a particular interpretation might be unconstitutional, it makes it that much harder to ignore that and rule against the law. After all, if the court rules for the plaintiffs, what would prevent Adler and Cannon from turning right around, flipping back to their position from 2011, and arguing that the law as now interpreted is unconstitutional? If they did, they would have all the legal arguments pre-written for them by Affordable Care Act supporters.
It's very useful for a lawyer to be able to argue both sides of a case. Unfortunately for the creators of King v. Burwell, they argued both sides in public with equal fervor. And that could come back to haunt them in the end.
Acknowledgment: Brian Beutler's assistance with the Supreme Court briefs was instrumental in making sure I was able to write this piece.