Heads up: long post. I have some thoughts on the Roberts Court’s ruling concerning the IRS’ tax credits.
Chief Justice John Roberts again rewrote the Patient Protection Affordable and Care Act to suit what he thought it should say rather than staying within the bounds of what it actually says. In these comments I’ll leave aside Roberts’ guiding principles that health plans that are independent of the risk being transferred are, somehow, insurance plans; that possession of a health plan is a universal so good it must be mandated; and that the folks who need a health plan the least—the healthy—must also be required to possess such a plan. Those matters have been well addressed elsewhere. I’ll confine my remarks to his position on the IRS’ tax credits.
What the ACA actually says regarding State Exchanges and IRS’ tax credits is this [emphasis added in both cites]:
The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—
the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State [under the ACA]
The term “coverage month” means, with respect to an applicable taxpayer, any month if—
as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State [under the ACA]
It really is quite explicit and clear. Eligibility for the tax credits is only through enrollment in a State Exchange: Federally established exchanges simply do not count. Nevertheless, as Roberts noted [citations omitted],
the IRS Rule provides that a taxpayer is eligible for a tax credit if he enrolled in an insurance plan through “an Exchange,” which is defined as “an Exchange serving the individual market…regardless of whether the Exchange is established and operated by a State…or by HHS[.]”
Now comes the first of Roberts’ non sequiturs:
The tax credits are among the Act’s key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep “economic and political significance” that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly.
Indeed. However, it’s irrelevant. As he admitted, the money’s availability is an economic and political question; it most assuredly is not a legal one. This is no matter for the Court to involve itself.
Roberts then laid out three things he held must be true in order to reach his ruling:
First, the individual must enroll in an insurance plan through “an Exchange.” Second, that Exchange must be “established by the State.” And third, that Exchange must be established “under [42 U. S. C. §18031].”
For the first, Roberts turned to this bit of pseudo-logic:
State Exchanges and Federal Exchanges are equivalent—they must meet the same requirements, perform the same functions, and serve the same purposes. Although State and Federal Exchanges are established by different sovereigns, Sections 18031 and 18041 do not suggest that they differ in any meaningful way. A Federal Exchange therefore counts as “an Exchange” under Section 36B.
Notice that: Roberts has conflated “equivalent” with “equal,” or “the same as,” and he has minimized the critical distinction that renders them not at all the same: that the Exchanges were established by different sovereigns. The first is in part a straw man: no one was arguing the two different Exchanges were not equivalent enough to satisfy the “must have a health plan” requirement. The conflation and the minimization are absolutely necessary, though, to support disregarding the plain language of the ACA: an Exchange established by the State.
Thus, the first of his three things which must be true to support his opinion has failed, and so the rest of his argument fails, as well.
Let’s proceed, anyway, to the second of his three things which he has said must be true for his argument to be true.
As we just mentioned, the Act requires all Exchanges to “make available qualified health plans to qualified individuals”—something an Exchange could not do if there were no such individuals.
And that’s a problem: If we give the phrase “the State that established the Exchange” its most natural meaning, there would be no “qualified individuals” on Federal Exchanges.
Of course it cannot: none qualified means none qualified. Full stop. By definition, then, “if there are no such individuals” then the Exchange has achieved its duty of 100%. There is not the first syllable of an obligation created in ACA that requires a State or a State’s Exchange to manufacture qualified individuals out of the æther where none exist naturally. Neither is there the first syllable of an authorization crated in the ACA for a Federal Exchange to manufacture such individuals in a State’s stead.
This problem arises repeatedly throughout the Act.
Yes, it does. So much so that the problem must be taken at face value: it is not a problem but the repeatedly stated intent of the ACA. Indeed, the Supreme Court already had ruled on this sort of question in a prior case—oddly health care related, also—Brown v Gardner, wherein Justice David Souter, writing for the Court, quoted a rule laid out in Russello v US, a rule now well-established (except, apparently, in the minds of the Roberts Court):
Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.
Where Congress included particular language concerning credits in one section of the ACA but omitted it in another section of the same Act, and where Congress included particular language concerning Exchanges in one section of the ACA but omitted it in other sections of the Act, the Court must presume that Congress acted intentionally and purposely in that disparate exclusion.
And so Roberts’ second argument has failed, and so then has his overall argument.
Proceeding to his conclusion from his three points (I’ll not contest his third):
The upshot of all this is that the phrase “an Exchange established by the State under [42 U. S. C. §18031]” is properly viewed as ambiguous. The phrase may be limited in its reach to State Exchanges. But it is also possible that the phrase refers to all Exchanges—both State and Federal—at least for purposes of the tax credits.
No, the phrase is extremely clear: it applies only to State-established Exchanges. Or else Roberts is saying that this is permissible, also: the phrase “2 + 2” may be limited in its reach to the sum of 4. But it is also possible that the phrase refers to all sums—at least for purposes of Supreme Court Justices. No. As Roberts noted above, the thing is stated often throughout the ACA, and so it’s clearly intended to mean what it says.
Roberts went on in that vein for some distance; I’ll just touch on some highlights.
The Affordable Care Act contains more than a few examples of inartful drafting.
True. Also irrelevant. It’s the Court’s job first, to determine the legitimacy—the Constitutionality—of the law before it, or in the present case, whether the Rule before it comports with the law it’s purported to implement, and if legitimate to apply the law or Rule as it is written. Note that it’s necessary to determine legitimacy, too, based solely on the text of the law or Rule and on nothing else—including the clumsiness with which it might have been written.
[citation omitted] Here, the statutory scheme compels us to reject petitioners’ interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very “death spirals” that Congress designed the Act to avoid. (“We cannot interpret federal statutes to negate their own stated purposes.”).
And yet the ACA’s clearly stated purpose was that tax credits would be available only for health plan purchasers who purchased their plans through a State Exchange—as the ACA said repeatedly. The provision for Federal Exchanges was solely to provide for the availability of health plans for everyone. Had the ACA contemplated the tax credits to be available through Federal Exchanges, also, it would have said so at any of the ample opportunities available for so saying. The Congress chose not to say so.
[emphasis added, citation omitted] When analyzing an agency’s interpretation of a statute, we often apply the two-step framework announced in Chevron. Under that framework, we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable. This approach “is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.“
But this is just the agency writing law—filling in gaps in law can only be law-writing—which the Court has previously ruled unconstitutional; law writing is the sole province of Congress. For instance, in JW Hampton, Jr., & Co v United States, the Court held that [emphasis added]
“In determining what Congress may do in seeking assistance from another branch, the extent and character of that assistance must be fixed according to common sense and the inherent necessities of the government co-ordination.” So long as Congress “shall lay down by legislative act an intelligible principle to which the person or body authorized to [exercise the delegated authority] is directed to conform, such legislative action is not a forbidden delegation of legislative power.”
In other words, no gaps in the law. Only the law itself is available to the Rule maker; actual gaps can be filled only statutorily.
Here are some additional thoughts, now on Roberts’ repeated contention that he is able to divine Congressional intent and that divination should supersede the plain text of the law.
Debates in Congress are not appropriate sources of information from which to discover the meaning of the language of a statute passed by that body.
That’s what this Court held in Dunlap v US. We are stuck with, and the Court should adhere to—is obligated by their several oaths of office to adhere to—the plain language of the law before them. And that plain language is quite clear.
Thus, how do we know what Congress actually intended? It’s very clear: by the words in the statute that the Congress passed. Full stop.
“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master—that’s all.”
God save the United States and this Honorable Court, indeed.
The ruling and dissent can be seen here.