At one level, today’s Supreme Court decision to preserve the tax subsidies that allow low- and middle-income people to afford health insurance is a marvelous, miraculous win. I’m sure that the millions who depend on those subsidies (in states where the federal government runs the exchange) are hugely relieved that they can continue to receive affordable coverage. I can tell you for a fact, listening to the hallways here at CBPP (and interviewing myself), that those who helped craft and have advocated for the Affordable Care Act are hugely elated.
And having just caught snippets of the President on TV, I can confirm for you that he’s pretty happy too.
But at another level, and this comes out surprisingly clearly from Chief Justice Roberts’ majority (6-3!) decision, the suit made little sense in the first place. His opinion—highly readable, btw—shows that a common sense reading of the issues points clearly in the direction of Congressional intent: the subsidies are an integral part of the law’s structure, and Congress intended them to do what they’re doing, regardless of whether the state or the feds set up a particular state’s exchange.
Ian Millhiser pulls out a key section from Roberts’ opinion (my brackets):
As discussed above, Congress based the Affordable Care Act on three major reforms: first, the guaranteed issue and community rating requirements [can’t deny coverage and can’t vary premium costs within areas based on age, gender, health status]; second, a requirement that individuals maintain health insurance coverage or make a payment to the IRS; and third, the tax credits for individuals with household incomes between 100 percent and 400 percent of the federal poverty line. In a State that establishes its own Exchange, these three reforms work together to expand insurance coverage. The guaranteed issue and community rating requirements ensure that anyone can buy insurance; the coverage requirement creates an incentive for people to do so before they get sick; and the tax credits—it is hoped—make insurance more affordable. Together, those reforms “minimize . . . adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums.”
The majority recognizes that the drafting was ambiguous around the issue of exchanges set up by the feds, but argues that when such ambiguity exists, you look at the over-arching intention of the law—the provision of affordable coverage—and the linkages between the ambiguity in question, the structure of the law, and its goal.
When you do so, according to these justices, there’s no question that Congress intended that regardless of who sets up a given exchange, it must provide tax credits to fulfill that link in the chain nicely articulated above.
This was all clear on day one, so—and I’m not the biggest SCOTUS watcher by a long shot—why take it up in the first place?
I guess the fact that decision wasn’t 9-0 gives a partial answer to that question. But the whole episode—and I promise you, I’m elated with the outcome and plan to smile all day long—is a reminder that we live in a period of highly constrained rationality, where facts are too often on the run, and simple common sense is a cause for celebration.
It’s hard to run a successful democracy under those conditions, but today at least, we managed to do so.
This case presents basic 1st year law school discussion of the principles of statutory interpretation. A universally accepted standard rule of interpreting an enactment is that the court interprets a statutory provision so that it makes sense in the context of the legislative intent of the entire statutory schema and so that the various provisions of the statute do not contradict one another but create a consistent whole. It is amazing not only that the case made it this far but that 3 justices of the Supreme Court either ignored or refused to apply this basic principle of statutory interpretation. The dissent is classic result based analysis where the desired result is identified and then an argument is crafted to reach that result.
The “state” exchange suit was a waste of time. The real problem with the impact of the Affordable Care Act is that it promotes a false sense that we have solved the middle class poverty caused by unbelievable health care costs, compared to the rest of the world.
While conservatives are quick to unreasonably argue that every tax increase for the wealthy increases unemployment and lowers wages, progressives too often adopt the headline as a solution and ignore the details and long term impact of targeted subsidies for what should be a universal benefit.
Obamacare makes it easy for families to buy health insurance when they receive huge subsidies. Who wouldn’t think a $1,000 a month policy for just $75 is a bargain? What huge corporation wouldn’t applaud a government program that saves them money by forcing taxpayers to pay healthcare subsidies, replacing policies they used to underwrite? What insurance company wouldn’t welcome 20% profit, guaranteed by the federal government, and $6,000 deductibles? Which drug company would not applaud a program that doesn’t allow negotiation over prices? What hospital chain would refuse a plan, where they charge what they want (with some bookkeeping exercise included) and the taxpayer foots most of the bill?
The Supreme Court instead should be deciding why vital public services are often free for the poor and exorbitant for the middle class. If healthcare is important enough to offer one family a $900 a month subsidy, why isn’t healthcare free to everyone, so the rich and middle class can chip in for a program that would be embraced by the 98% or so, and, of course, deemed insufficient by the rich, who are free to buy whatever protection they want?